Sesa Goa

1.  We have audited the attached Balance Sheet of SESA GOA LIMITED as
 at 31st March, 2009, and the Profit and Loss Account and the Cash Flow
 Statement of the Company for year ended on that date, 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 check 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, (the
 Order) issued by the Central Government of India 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, to the extent applicable to the Company.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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 purposes of our
 audit;
 
 (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
 those books;
 
 (c) the Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with
 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 31st March, 2009;
 
 (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 for the
 year ended on that date.
 
 5. On the basis of written representations received from the directors
 as on 31st March, 2009, and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March,
 2009 from being appointed as Director of the Company in terms of Clause
 (g) of sub section (1) of section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS’ REPORT (Referred to in paragraph 3 of our
 report of even date)
 
 1.  In respect of the Company’s fixed assets:
 
 (a) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records showing full
 particulars, including quantitative details and location of its fixed
 assets.
 
 (b) According to the information and explanations given to us, the
 fixed assets of the Company covering all locations have been physically
 verified by the management during the year in accordance with the
 programme of verification. In our opinion, the program provides for
 physical verification of all fixed assets at reasonable intervals.
 According to the information and explanations given to us, no material
 discrepancies were noticed on such verification.
 
 (c) During the year, the assets disposed off by the Company do not, in
 our opinion, constitute a substantial part of its fixed assets.
 
 2.  In respect of its inventories:
 
 (a) As explained to us, inventories were physically verified during the
 year by the management. In our opinion, the frequency of verification
 is reasonable.
 
 (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) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on verification
 between the inventories physically verified and the book records.
 
 3.  According to the information and explanations given to us, the
 Company has not granted or taken any secured or unsecured loan to or
 from companies, firms and other parties covered in the Register
 maintained under Section 301 of the Companies Act, 1956.  Consequently
 the provisions of paragraph 4(iii)(a) to 4(iii)(g) of the Order are not
 applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems 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 goods and
 services. During the course of our audit, we have neither come across
 nor have we been informed about any instances of major weaknesses in
 the aforesaid internal control systems.
 
 5.  According to the information and explanations given to us, the
 Company has not entered into any contract or arrangement with other
 parties, which needs to be entered in the Register maintained under
 Section 301 of the Companies Act, 1956.
 
 6.  The Company has not accepted deposits from the public, hence the
 provisions of paragraph 4(vi) of the Order is not applicable to the
 Company.
 
 7.  In our opinion, the internal audit function carried out during the
 year by a firm of Chartered Accountants appointed by the management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 8.  To the best of our information and according to the information and
 explanation given to us, the Central Government has not prescribed
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 in respect of the Company’s products.
 
 9.  According to the information and explanations given to us in
 respect of statutory and other dues:
 
 (a) During the year, the Company has been regular in depositing
 undisputed statutory dues relating to provident fund, income tax, sales
 tax, wealth tax, service tax, customs duty, excise duty, cess and other
 material statutory dues applicable to it.  We have been informed that
 no sums were payable in respect of investor education and protection
 fund.
 
 (b) During the year, the Company was generally regular in depositing
 dues relating to employees’ state insurance.
 
 (c) According to the information and explanations given to us, no
 undisputed statutory dues were payable in respect of provident fund,
 investor education and protection fund, employees’ state insurance,
 wealth tax, service tax, customs duty, cess, royalty and income tax
 which were in arrears for a period of more than six months from the
 date they became payable.
 
 (d) As at 31st March, 2009 according to the information and
 explanations given to us, the following are particulars of disputed
 statutory dues and amounts that have not been deposited:
 
 Name of the Statute         Nature of dues     Amount (Rupees
                                                 in crores)
 Income Tax Act,1961         Income Tax            0.45
 Sales Tax                   Sales Tax             0.53
 Sales Tax                   Sales Tax             0.63
 
 Period to which the amount        Forum where the dispute is pending
 relates
 Assessment Year 2005-06    Commissioner of Income Tax (Appeals> Panjal
 1987-88 to 1990-91         Administrative Tribunal for Goa
 1977-98 to 2000-01         Additional Commissioner of Sales Tax
 
 10.  The Company does not have any accumulated losses. The Company has
 not incurred cash losses during the current financial year and in the
 immediately preceding financial year.
 
 11.  According to the information and explanations given to us, the
 Company has not taken any term loan from a bank or financial
 institution or borrowed any sum against issue of debentures.
 Therefore, the provisions of paragraph 4(xi) of the Order is not
 applicable to the Company.
 
 12.  According to the information and explanations given to us and the
 records examined by us, the Company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other investments. Therefore, the provisions of
 paragraph 4(xii) of the Order are not applicable to the Company.
 
 13.  In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund, niddhi or a mutual benefit
 society. Therefore the provisions of paragraph 4(xiii) of the Order are
 not applicable to the Company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in shares securities
 or debentures and other investments. Therefore the provisions of
 paragraph 4(xiv) of the Order are not applicable to the Company.
 
 15.  According to the information and explanations given to us, and the
 records examined by us, the Company has not given any guarantee for
 loans taken by others from banks or financial institutions.
 
 16.  To the best of our knowledge and belief and according to the
 information and explanations given to us, there were no amounts pending
 application in respect of term loans outstanding as at the beginning of
 the year nor were there any additional amounts availed against term
 loans during the year. Therefore the provisions of paragraph 4(xvi) of
 the Order are not applicable to the Company.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we report
 that, funds raised on short term basis have, prima facie, not been used
 during the year for long term investment.
 
 18.  According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares to 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 and the
 records examined by us, the Company has not issued any debentures that
 were outstanding at any time during the year.
 
 20.  According to the information and explanations given to us and the
 records examined by us, the Company has not raised money by public
 issues during the year.
 
 21.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 was noticed or reported during the year.
 
                                        For DELOITTE HASKINS & SELLS, 
                                               Chartered Accountants
 
                                                SANJIV V. PILGAONKAR
                                                             Partner
                                                Membership No. 39826
 Place: Mumbai
 Date: 20th April, 2009