1. We have audited the attached Balance Sheet of ESSAR PORTS LIMITED
(formerly known as Essar Shipping Ports & Logistics 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. 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 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
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
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
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.
5. 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.
Annexure to the Auditors'' Report (Referred to in paragraph 4 of our
report of even date)
(i) Having regard to the nature of the Company''s business / activities
/ result, clauses (vi), (viii), (xii), (xiii), (xiv), (xviii), (xix)
and (xx) 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) The fixed assets were physically verifed 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, no material discrepancies were noticed on such
(c) In our opinion and according to the information and explanations
given to us, the Company has not made substantial disposals of fixed
assets during the year and the going concern status of the Company is
(iii) In respect of its inventory, as explained to us, the Company is
not required to maintain any inventories for its operation. Hence the
provisions of clause (ii) (a) to (ii) (c) of the Order is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, 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. Hence, the provisions of clause (iii) (b) to (iii) (g) of the
Order are not applicable to the Company.
(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 our opinion and according to information and explanation given
to us, there are no contracts or arrangements that need to be entered
into the register maintained in pursuance of Section 301 of the
Companies Act, 1956.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) 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, Income-tax, Tax Deducted at source,
Sales Tax, Service Tax, Custom Duty, Cess and other material statutory
dues applicable to it with the appropriate authorities. As informed to
us, the provisions for Investors Education and Protection Fund,
Employee''s State Insurance, Sales Tax, 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 in arrears as at March 31, 2012 for a period of more
than six months from the date they became payable.
(c) There were no due pending to be deposited on account of any dispute
in respect of Income-tax, Service Tax, Custom Duty and Cess as on March
(ix) The Company does not have accumulated losses as at the end of the
financial year. The Company has incurred cash losses in the financial
year covered by the audit; however no cash loss were incurred in the
immediately preceding financial year.
(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 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.
(xii) In our opinion and according to the information and explanations
given to us, working capital loans of Rs. 30,000 lakhs have been
applied by the Company for purchase of investment in the equity of
(xiii) On the basis of an overall examination of the balance sheet as
at March 31, 2012 and the cash flow statement of the Company for the
year then ended and according to the information and explanation given
to us, we report that funds raised on short-term basis amounting to Rs.
29,744.01 lakhs have, prima facie, been used for long term purpose.
(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
(Firm Registration No. 117365W)
(Membership No. 31544)
May 30, 2012