AUDITORSTO
THE MEMBERS OF
ESSAR PORTS LIMITED
We have examined the Abridged Balance Sheet of Essar Ports Limited (formerly EssarShipping Ports & Logistics Limited) ("the Company"), as at 31st March, 2011and also the abridged Statement of Profit and Loss and the Cash Flow Statement for theyear ended on that date annexed thereto. These abridged financial statements have beenprepared by the Company pursuant to Rule 7A of the Companies (Central Government's)General Rules and Forms, 1956 and are based on the audited financial statements of theCompany for the year ended 31st March, 2011 prepared in accordance with the provisions ofsubsection 3(C) of Section 211 of the Companies Act, 1956 and covered by our report ofeven date to the members of the Company, which is attached hereto.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Regn. No. 117366W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai July 4, 2011
AUDITORS' REPORT
TO
THE MEMBERS OF
ESSAR PORTS LIMITED
1. We have audited the attached Balance Sheet of ESSAR PORTS LIMITED (formerly knownas Essar Shipping Ports & Logistics Limited) ("the Company") as at 31stMarch, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company forthe year ended on that date, both annexed thereto. These financial statements are theresponsibility of the Company's Management. Our responsibility is to express an opinion onthese financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by theCentral Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Without qualifying our report, we invite attention to Note B (6) of schedule 13regarding Managerial Remuneration for the year 2010-11 paid to the Directors which issubject to a Special Resolution being passed at the General Meeting of the Company andapproval of the Central Government as stated therein.
5. Further to our comments in the Annexure referred to in paragraph 3 above, we reportas follows:
a. we have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as it appears from our examination of those books;
c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account;
d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report are in compliance with the Accounting Standardsreferred 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 explanationsgiven to us, the said accounts give the information required by the Companies Act, 1956 inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2011;
ii. in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date and
iii. in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.
6. On the basis of the written representations received from the Directors as on 31stMarch, 2011 taken on record by the Board of Directors, none of the Directors isdisqualified as on 31st March, 2011 from being appointed as a director in terms of Section274(1 )(g) of the Companies Act, 1956.
For Deloitte Haskins & Sells
Chartered Accountants
(ICAI Reg. No. 117366W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
4th July, 2011
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company's business/activities/result, clauses(vi), (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are notapplicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us, no material discrepancies were noticed on suchverification.
(c) In our opinion and according to the information and explanations given to us, theCompany has not made substantial disposals of fixed assets during the year and the goingconcern status of the Company is not affected.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during the year by theManagement at reasonable intervals.
(b) In our opinion and according to the information and explanation given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iv) In our opinion and according to the information and explanations given to us, TheCompany 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 theCompanies Act, 1956. Hence, the provisions of clause (iii) (b) to (iii) (g) of the orderare not applicable to the Company.
(v) In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company and thenature of its business with regard to purchases of inventory and fixed assets and the saleof goods and services. During the course of our audit, we have not observed any majorweakness in such internal control system.
(vi) In our opinion and according to information and explanation given to us, there areno contracts or arrangements that need to be entered into the register maintained inpursuance of Section 301 of the Companies Act, 1956.
(vii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(viii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed dues, includingProvident Fund, Income-tax, Sales Tax, Service Tax, Custom Duty, Cess and other materialstatutory dues applicable to it with the appropriate authorities. As informed to us, theprovisions for Investment Education and Protection Fund, Employee's State Insurance, SalesTax, Wealth Tax and Excise duty were not applicable to the Company during the year.
(b) There were no undisputed amounts payable in respect of above statutory dues inarrears as at 31st March, 2011 for a period of more than six months from the date theybecame payable.
(c) There were no due pending to be deposited on account of any dispute in respect ofIncome-tax, Service Tax, Custom Duty and Cess as on 31st March, 2011.
(ix) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to banks, financial institutions anddebenture holders.
(x) In our opinion and according to the information and explanations given to us, theterms and conditions of the guarantees given by the Company for loans taken by others frombanks and financial institutions are not prima facie prejudicial to the interests of theCompany.
(xi) In our opinion and according to the information and explanations given to us, theterm loans of Rs. 525 crores have not been applied for the purposes for which they wereobtained.
(xii) In our opinion and according to the information and explanations given to us andon an overall examination of the Balance Sheet, we report that funds raised on short-termbasis have not been used during the year for long- term investment.
(xiii) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants (ICAI Reg. No. 117366W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
4th July, 2011