1.  We have audited the attached Balance Sheet of Essar Shipping
 Limited (formerly Essar Ports & Terminals Limited) (the Company) as
 at March 31, 2012, the Statement of Profit and Loss and Cash Flow
 Statement of the Company for the year ended March 31, 2012 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 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 misstatement. 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 (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we give 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 appears from our examination of
 those books;
 
 (iii) 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;
 
 (iv) 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;
 
 (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, 2012;
 
 (b) in the case of the Statement of Profit and Loss, 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 written representations received from Directors as
 on 31st March, 2012 taken on record by the Board of Directors, we
 report that none of the Directors is disqualified as on 31st March,
 2012 from being appointed as a director in terms of Section 274(1 )(g)
 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITOR''S REPORT TO THE MEMBERS OF ESSAR SHIPPING
 LIMITED
 
 (Referred to in paragraph 3 of our report of even date)
 
 In our opinion and according to the information and explanations given
 to us, the nature of the Company''s business/activities during the year
 are such that clauses (vi), (viii), (x),(xiii), (xiv), (xviii), and
 (xx) of para 4 of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the Company.
 
 1.  In respect of its fixed assets:
 
 a.  The Company has maintained proper records showing full particulars,
 including quantitative details and situation of its fixed assets.
 
 b.  The fixed assets of the Company are physically verified by the
 management according to a phased programme designed to cover all the
 items over a period of three years, which in our opinion, is largely
 reasonable having regard to the size of the Company and the nature of
 its assets.  As per the information given to us by the management, no
 material discrepancies as compared to book records were noticed in
 respect of fixed assets verified during the year.
 
 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
 not affected.
 
 2.  In respect of its inventories:
 
 a.  As explained to us, inventories were physically verified during the
 year by the management at reasonable intervals.
 
 b.  In our opinion and according to the information and explanations
 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.  According to the information and explanations given to us, the
 Company''s inventories comprise fuel oil and lube oil on board the
 ships. Having regard to the nature of the Company''s business and scale
 of operations, quantities are determined by physical count and it is
 not considered feasible to maintain records of movements of inventories
 of such items by the vessel in which they are carried. As quantities
 are determined by physical count and records of movements are not
 maintained on board the ships, the question of discrepancies on
 physical verification thereof does not arise.
 
 3.  In our opinion and according to the information and explanations
 given to us, there are no companies, firms or parties required to be
 entered into the register maintained under section 301 of the Companies
 Act, 1956. Accordingly, paragraphs 4(iii) (a) to (g) of the Order are
 not applicable to the Company.
 
 4.  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 for the
 purchase of inventory and fixed assets and for the sale of services.
 During the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in such internal controls. The
 nature of the Company''s business does not involve sale of goods.
 
 5.  In our opinion and according to the information and explanations
 given to us, there are no contracts or arrangements that need to be
 entered into the register maintained under section 301 of the Companies
 Act 1956.
 
 6.  In our opinion, the internal audit system of the Company is
 commensurate with the size of the Company and nature of its business.
 
 7.  According to the information and explanations given to us in
 respect of statutory dues:
 
 a.  The Company has been generally regular in depositing undisputed
 statutory dues, including Provident Fund, Service tax, Investor
 Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Value
 Added Tax, Customs Duty, Excise Duty, Cess and any other material
 statutory dues, as applicable, with the appropriate authorities during
 the year.  As informed to us Employees State Insurance Scheme is not
 applicable to the Company.
 
 There are no undisputed amounts payable in respect of the above
 statutory dues that are outstanding as at 31st March, 2012 for a period
 exceeding six months from the date they became payable.
 
 b.  The details of Income Tax and Sales Tax dues which have not been
 deposited as at March 31, 2012 on account of disputes pending, are
 given below:
 
 Name of      Nature of       Amount     Period to     Forum where
 the statute  the disputed   (Rs. in 
                              crore)     which the     dispute
              dues                       amount 
                                         relates       is pending
 
 Income tax   Income Tax       7.29      Assessment    Appellate
 Act, 1961                               Year from     Authority-
                                         1994-1995     Tribunal Level
 
 Director     Customs duty    27.40      FY 07 to 09   Bombay High
 General of                                            court
 Foreign
 Trade,
 Bangalore
 
 According to the information and explanation given to us, there were no
 dues pending to be deposited on account of any dispute in respect of
 Wealth Tax, Service Tax, sales tax, Excise Duty and Cess as on 31st
 March, 2012.
 
 8.  In our opinion, on the basis of audit procedures and according to
 the information and explanations given to us, the Company has not
 defaulted in repayment of dues to banks, financial institutions or
 debenture holders.
 
 9.  According to the information and explanations given to us and based
 on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 10.  In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for the loans taken by others from banks and financial
 institutions, are not, prima facie, prejudicial to the interests of the
 Company.
 
 11.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 availed by the Company were, prima facie, applied by the Company during
 the year for the purposes for which the loans were obtained, other than
 temporary deployment pending application.
 
 12.  According to the information and explanations given to us, and on
 an overall examination of the Balance Sheet of the Company, we report
 that the funds raised on short-term basis have, prima facie, not been
 used during the year for long-term investment.
 
 13.  According to the information and explanations given to us, during
 the period covered by our audit report, in respect of the debentures
 outstanding the securities created fully cover the amount of
 debentures.
 
 14.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no material fraud on or by
 the Company was noticed or reported during the year.
 
 For Deloitte Haskins & Sells
 
 Chartered Accountants
 
 (Registration No. 117365W)
 
 Khurshed Pastakia
 
 Partner
 
 (Membership No.31544)
 
 Mumbai,
 
 May 17, 2012