1.  We have audited the attached Balance Sheet of THE GREAT EASTERN
 SHIPPING COMPANY LIMITED as at March 31, 2011, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date 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 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 (Auditors Report) Order, 2003, issued
 by the Central Government of India in terms of section 227 (4A) of the
 Companies Act, 1956, we annex hereto 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 above, we
 report that :
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 b) 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 such
 books.
 
 c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with 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 Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of section 211 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 read with the notes
 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 :
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 ii) in the case of the Profit and Loss Account, of the profit 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, 2011 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2011, from being appointed as a Director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956.
 
 Annexure to the Auditors Report
 As required by the Companies (Auditors Report) Order, 2003, issued by
 the Central Government of India in terms of section 227 (4A) of the
 Companies Act, 1956, we further report that :
 
 1.  Fixed Assets :
 
 a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b) The Company has a program for physical verification of fixed assets
 at periodic intervals. In our opinion, the frequency of verification is
 reasonable having regard to the size of the Company and the nature of
 its assets. The discrepancies noticed on such verification are not
 material and have been properly dealt with in the books of account.
 
 c) In our opinion, there have been no significant disposals of fixed
 assets during the year which affect the going concern assumption.
 
 2.  Inventory :
 
 a) The Management has conducted physical verification of inventory at
 reasonable intervals. In our opinion, the frequency of verification is
 reasonable.
 
 b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on verification between the
 physical stocks and the book records and the same have been properly
 dealt with in the books of account.
 
 3.  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.
 
 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
 purchases of inventory and fixed assets. During the course of our
 audit, we have not observed any major weaknesses in the internal
 control system.
 
 5.  Transactions that need to be entered in the register maintained
 under section 301 of the Companies Act, 1956 :
 
 a) Based upon the audit procedures applied by us and according to the
 information and explanations given to us, we are of the opinion that
 the particulars of contracts or arrangements referred to in section 301
 of the Companies Act, 1956, have been entered in the register required
 to be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 500,000 in
 respect of any party during the year, have been made at prices which
 are reasonable, having regard to prevailing market prices at the
 relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 within the meaning of section 58A, 58AA, or any other relevant
 provisions of the Companies Act, 1956 and the rules framed thereunder.
 No order has been passed by the Company Law Board, or National Company
 Law Tribunal, or Reserve Bank of India, or any Court, or any other
 Tribunal.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 8.  According to the information and explanations given to us, the
 maintenance of cost records has not been prescribed by the Central
 Government under section 209(1)(d) of the Companies Act, 1956, in
 respect of any of the activities of the Company.
 
 9.  Statutory Dues
 
 a) According to the information and explanation given to us, except for
 the provident fund dues of floating staff, the Company is generally
 regular in depositing undisputed statutory dues, including dues
 pertaining to Investor Education and Protection Fund, Shore Staff
 Provident Fund, Employees State Insurance, Income-tax, Sales-tax,
 Wealth Tax, Service Tax, Custom Duty, Cess and any other statutory dues
 with the appropriate authorities. We have been informed that in respect
 of floating staff it is not possible to accurately ascertain the
 provident fund dues in view of the nature of Companys activities. The
 Company regularly makes ad hoc payments to the appropriate authorities
 and on final determination, the balance, if any, is paid. We have been
 informed that there are no undisputed dues which have remained
 outstanding as at the end of the financial year, for a period of more
 than six months from the date they became payable.
 
 b) According to the information and explanations given to us, there are
 no dues of income-tax, sales tax, wealth tax, service tax, customs
 duty, excise duty or cess outstanding on account of any dispute, other
 than the following :
 
 NAME OF THE STATUTE  NATURE OF DUES   AMOUNT  PERIOD TO 
                                               WHICH THE  FORUM WHERE
 
                                      (RS. IN 
                                        LAKHS)    AMOUNT 
                                                 RELATES   DISPUTE IS 
                                                              PENDING
 
 The Customs Act, 
 1962                 Import duty          31    2000-01  The High Court
                                                          at Bombay
 
 The Tamilnadu 
 General              Lease tax          1740    1995-96  The High Court
 Sales Tax Act, 1959                                 to     at Madras
                                                 1997-98
 
 The Central Sales    Sales Tax           746    1995-96  The Sales Tax
 Tax Act, 1956, 
 Bombay                                             to    Appellate 
                                                          Tribunal
 Sales Tax Act, 
 1959 &                                          2010-11  
 Maharashtra  VAT 
 Act, 2005
 
 Maharashtra Land     Transfer charges 
                      for                 124    2002-03  The High Court
 Revenue Code, 1966   office premises 
                      under                                at Bombay 
                      the scheme of 
                      demerger
 
                      Transfer Charges 
                      for                 310    2003-04  The High Court
                      office Premises                     at Bombay
 
 Major Ports Trust    Demand for 
                      Pilotage and        137    2001-02  The High Court
 Act, 1963            Berth Charges on 
                      gross                           to  at Karnataka
                      tonnage                    2002-03
 
 10.  The Company does not have accumulated losses as at the end of the
 financial year, nor has it incurred cash losses in the current
 financial year, or in the immediately preceding financial year.
 
 11.  According to the information and explanations given to us and
 based on the documents and records produced before us, there has been
 no default in repayment of dues to banks or debenture holders. There
 are no dues to financial institutions.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced before us, the Company has
 not granted any loans or advances on the basis of security by way of
 pledge of shares, debentures or other securities.
 
 13.  In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund and nidhi / mutual benefit
 fund / societies.
 
 14.  The Company does not deal or trade in shares, securities,
 debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 terms and conditions of guarantees given by the Company for loans taken
 by its subsidiaries from banks are not prima facie prejudicial to the
 interest of the Company.
 
 16.  In our opinion and according to the information and explanations
 given to us, the term loans availed by the Company were applied for the
 purpose for which the loans were obtained.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet, the Cash Flow Statement
 and other records examined by us, the Company has not used funds raised
 on short term basis for long term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 any parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 19.  According to the information and explanations given to us, the
 Company has created security in respect of the secured redeemable
 non-convertible debentures issued.
 
 20.  The Company has not raised any money through a public issue during
 the year.
 
 21.  Based upon the audit procedures performed by us, to the best of
 our knowledge and belief and according to the information and
 explanations given to us by the Management, no fraud on, or by the
 Company, has been noticed or reported during the year.
 
 For and on behalf of
 
 Kalyaniwalla & Mistry
 
 Chartered Accountants
 Firm Regn. No.: 104607W
 
 Daraius Z. Fraser
 
 Partner
 
 Membership No.: 42454
 
 Mumbai: May 6, 2011.