1.  We have audited the attached Balance Sheet of SESA GOA LIMITED
 (the Company) as at 31st March, 2011, the Profit and Loss Account and
 the Cash Flow Statement of the Company for 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 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 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 (Auditors Report) Order, 2003, issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the same order.
 
 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 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 financial statements 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, 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on 31st March, 2011; and
 
 (iii) in the case of the Cash Flow Statement of the cash flows for the
 year ended on 31st March, 2011.
 
 5.  On the basis of written representations received from the directors
 as on 31st March, 2011, and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2011 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 3 of our report of even date)
 
 (i) In respect of the Company’s 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 verified 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
 explanations given to us, no material discrepancies were noticed on
 such verification.
 
 (c) The fixed assets disposed of during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (ii) In respect of the Company’s inventories:
 
 (a) As explained to us, the 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) 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 physical
 verification.
 
 (iii) 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.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, 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.
 
 (v) 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.
 
 (vi) According to the information and explanations given to us, the
 Company has not accepted any deposits from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956. According to the information and explanations
 given to us, no order has been passed in this respect, in the case of
 the Company by the Company Law Board or the National Company Law
 Tribunal or the Reserve Bank of India or any Court or any other
 Tribunal.
 
 (vii) In our opinion, the internal audit functions 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.
 
 (viii) In our opinion and according to the information and explanations
 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.
 
 (ix) 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, Investor Education and Protection Fund,
 Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Customs Duty, Excise Duty, Cess and other material
 statutory dues in arrears as at 31st March, 2011 for a period of more
 than six months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty and Cess which have not been deposited as on
 31st March, 2011 on account of disputes are given below:
 
 Statute         Nature of dues      Amount   Period to which the
                                     (Rs. in     amount relates
                                     crores)
 
 Income Tax Act, Income Tax           14.89   Assessment Years 2004-05,
 1961                                         2006-07 and 2007-08 
 
 Sales Tax Act   Sales Tax             0.63   1997-98 to 2000-01
 
 Customs Act,    Customs Duty          1.40   Assessment Year 2006-07
 1962
 
 
 Statute               Forum where the dispute is pending
 
 Income Tax Act.       Commissioner of Income Tax (Appeals), Panaji
 1961
 
 Sales Tax Act         Additional Commissioner of Sales Tax
 
 Customs Act, 1962     Customs Excise and Service Tax Appellate 
                       Tribunal, Mumbai
 
 
 
 (x) 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.
 
 (xi) 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.
 
 (xii) According to the information and explanations given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The Company is not a chit fund, nidhi or a mutual benefit
 society.
 
 (xiv) 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.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 (xvi) According to the information and explanations given to us, the
 Company has not availed any term loans during the year.
 
 (xvii) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long- term investment.
 
 (xviii) 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.
 
 (xix) The Company has not issued any debentures.
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) 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 
 Chartered Accountants 
 (Registration No. 117366W)
 
 Rajesh K. Hiranandani
 Partner
 (Membership No. 36920)
 
 Place: Panaji - Goa 
 Dated: 25th April, 2011