Home  »  Company  »  Adani Ports & Speci  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Adani Ports & Special Economic Zone Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to

(a) Note 36(m) of the accompanying standalone financial statements regarding recognition of Minimum Alternate Tax (''MAT'') credit entitlement in respect of certain interest income based on the consideration that the Company would be able to claim tax holiday benefit on thesame, asper provision of section 80IAB of the Income Tax Act, 1961, more fully described in the said note.

(b) Note 39 of the accompanying standalone financial statements regarding the basis of recognition of certain projects service revenue during the previous year, as more fully described in the said note.

(c) Note 42 of the accompanying standalone financial statements regarding the accounting treatment followed by, as per the composite scheme of arrangement between Adani Enterprises Limited and the Company, approved by the High Court of Gujarat.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and 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 it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financia controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 36 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long- term contracts including derivative contracts - Refer Note 8 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Annexure 1 referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date for the year ended March 31, 2016

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion, physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to information and explanations given by the management, the title deeds of immovable properties, included in fixed assets except for the immovable property in the nature of reclaimed land having Gross BookValue (6BV) aggregating Rs.202.21 crores and Net Book Value (NBV) aggregating Rs. 181.35 crores and residential flats having 6BV of Rs. 131.04 crores and NBV of Rs. 119.33 crores which are not registered in the name of the Company. Also refer note 12 of the financial statements.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

(iii) (a) The Company has granted loans to twenty two companies covered in the register maintained under section 189 of the Companies Act, 2013. The loans have been granted based on approval of Finance Committee at varying terms and conditions which in our opinion and according to the information and explanations given to us, the terms and conditions are generally not prejudicial to the Company''s interest.

(b) In respect of loans granted to parties covered in the register maintained under section 189 of the Companies Act, 2013, repayment of the principal amount and payment of interest has been regular, except, in respect of certain loan transactions aggregating Rs. 4,500.35 crores whereby the Company has amended/extended/rolled over the Schedule of repayment of principal and payment of interest, rate of interest, than as stipulated at the time of grant of loan

(c) Read with paragraph (iii)(b) above, there are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days,

(iv) In our opinion and according to the information and explanations given to us, and considering the legal opinion taken by the Company on applicability of section 185 of the Companies Act, 2013, in respect of certain loan transactions and that the same have been given in the ordinary course of the business, the Company has complied with the provisions of section 185 of the Companies Act 2013. Further, based on the information and explanations given to us, being an infrastructure company, provision of section 186 of the Companies Act, 2013 is not applicable to the Company and hence not commented upon

(v) The Company has not accepted any deposits from the public,

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the services of the Company,

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, service tax, sales tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable

(c) According to the records of the Company, the dues outstanding of service tax, customs duty, excise duty and income tax on account of any dispute, are as follows

Name of Nature of Amount Period to which the amount Forum where dispute is pending Statute Tax (Rs. in Crores) relates

Customs Act, Custom Duty 2.00 Jun-08 Commissioner of Customs 8-Central Excise, 1962 Ahmedabad

Customs Act, Custom Duty 0.14 July, 2003 Assistant Commissioner of Customs, 1962 Mundra

Customs Act, Custom Duty 0.25 August, 2007 Deputy Commissioner of Customs, Mundra 1962

Finance Act, Service Tax 6.72 December 2004 to March Supreme court 1994 2006

Service Tax 0.56 October 2003 to August Commissioner (Appeals) Rajkot 2005

Service Tax 42.51 April 2006 to September Customs, Excise and Service Tax Appellate 2007 Tribunal, Ahmedabad

Service Tax 66.96 October 2007 to September Customs, Excise and Service Tax Appellate 2008 Tribunal, Ahmedabad

Service Tax 77.54 October 2008 to September Customs, Excise and Service Tax Appellate 2009 Tribunal, Ahmedabad

Service Tax 0.61 September 2009 to March Commissioner of Service Tax, Ahmedabad 2010

Service Tax 116.84 October 2009 to September Customs, Excise and Service Tax Appellate 2011 Tribunal, Ahmedabad

Finance Act, Service Tax 0.87 April 2011 to September Customs, Excise and Service Tax Appellate 1994 2011 Tribunal, Ahmedabad

Service Tax 30.64 April 2011 to March 2012 Commissioner of Service Tax, Ahmedabad

Service Tax 23.36 April 2012 to September Commissioner/Addl. Commissioner of 2012 Service Tax, Ahmedabad

Service Tax 28.35 October 2012 to March 2013 Commissioner/Joint Commissioner of Service Tax, Ahmedabad

Service Tax 26.06 April 2013 to September Commissioner/Joint Commissioner of 2013 Service Tax, Ahmedabad

Service Tax 34.41 October 2013 to March Commissioner/Joint Commissioner of 2014 Service Tax, Ahmedabad

Finance Act, ServiceTax 6.72 April 2004 to August 2009 High Court of Gujarat 1994 Service Tax 0.15 April 2009 to March 2010 Commissioner of Service Tax, Ahmedabad

Service Tax 0.02 2010-11 Commissioner of Service Tax, Ahmedabad

Income Tax Income Tax 19.76 AY 2009-10 Income Tax Appellate Tribunal Act 1961 Income Tax 11.98 AY 2010-11

Income Tax 41.29 AY 2011-12

Income Tax 12.59 AY 2012-13 CIT (Appeal)

(viii) In our opinion and according to information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company does not have any outstanding dues to government during the year.

(ix) In our opinion and according to the information and explanations given by the management and on an overall examination of the balance sheet, the monies raised by way debt instruments in the nature of foreign currency bonds and term loans were applied for the purposes for which those were raised, though idle/ surplus funds which were not required for immediate utilization have been temporarily invested in fixed deposits/ mutual funds.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management and considering the legal opinion obtained by the management in respect of transactions related to advance given for purchase of equity shares and certain immovable properties that these transactions have been entered into with the related parties in the ordinary course of business and transactions with related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards,

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence, not commented upon

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company



For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003



per Arpit K. Patel

Place of Signature: Ahmedabad Partner

Date : May 03, 2016 Membership Number: 34032


Mar 31, 2015

We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid

standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2015, of its profit and its cash flows for the year ended on that date.

Emphasis of Matter

(i) We draw attention to Note 40 of the financial statements regarding the basis of recognition of project service revenue for the year ended March 31,2015, as more fully described in the said note.

(ii) We draw attention to Note 37(o) of the financial statements regarding the recognition of Minimum Alternate Tax (''MAT'') Credit Entitlement in respect of certain interest income based on the consideration that the Company would be able to claim tax benefit on the same, as per provision of section 80IAB of the Income Tax Act, 1961, more fully described in the said note.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and 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 it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 37 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 8 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 on other legal and regulatory requirement of our report of even date Re: Adani Ports and Special Economic Zone Limited (''the Company'')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion, physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory of stores and spares, fuel and lubricants has been physically verified by the management during the year. In our opinion, the frequency of such physical verification is reasonable.

(b) The procedures of physical verification of inventory 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 physical verification.

(iii) (a) The Company has granted loans to fourteen companies covered in the register maintained under section 189 of the Companies Act, 2013. In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest has been regular.

(b) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013.

(iv) Part of the Company''s purchases of fixed assets and sale of services are stated to be of unique and specialized nature, and hence, in such cases, the comparison of prices with the market rates or with purchases from/sales to other parties cannot be made. Read with the above, 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. The activities of the Company do not involve sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in internal control system of the company in respect of these areas.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the services of the Company.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added taxes, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, the dues outstanding of service tax, customs duty, excise duty and income tax on account of any dispute, are as follows:

Name of the Statute Nature of Tax Amount in Period to which the Rs Crores amount relates

Customs Act, 1962 Custom Duty 2.00 June, 2008

Custom Duty 0.14 July, 2003

Custom Duty 0.25 August, 2007

Cost recovery 6.16 FY 2013-14 & charges 2014-15

Finance Act, 1994 Service Tax 6.72 December, 2004 to March, 2006

Service Tax 0.56 October, 2003 to August, 2005 Service Tax 42.51 April, 2006 to March, 2008

Service Tax 66.96 October, 2007 to September, 2008

Service Tax 77.54 October, 2008 to September, 2009

Service Tax 0.61 September, 2009 to March, 2010

Service Tax 116.84 October, 2009 to September, 2011

Service Tax 0.87 April, 2011 to September, 2011

Service Tax 30.64 April, 2011 to March, 2012

Service Tax 23.36 April, 2012 to September, 2012

Service Tax 28.35 October, 2012 to March, 2013

Finance Act, 1994 Service Tax 6.72 April, 2004 to August, 2009

Service Tax 0.15 April, 2009 to March, 2010

Service Tax 0.02 2010-11 Income Tax Act, 1961 Income Tax 10.15 AY 2009-10 Income Tax 1.67 AY 2010-11

Income Tax 47.59 AY 2011-12

Name of the Statute Forum where dispute is pending

Customs Act 1962 Commissioner of Customs and Central Excise, Ahmedabad

Assistant Commissioner of Customs, Mundra

Deputy Commissioner of Customs, Mundra

Commissioner of Customs, Mundra

Finance Act 1994 High Court of Gujarat

Commissioner (Appeals) Rajkot

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Commissioner / Addl. Commissioner of Service Tax, Ahmedabad

Commissioner / Joint Commissioner of Service Tax, Ahmedabad

Finance Act 1994 High Court of Gujarat

Commissioner of Service Tax, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Income Tax Act 1961 Income Tax Appellate Tribunal

(d) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(x) According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, though idle/ surplus funds which were not required for immediate utilization have been invested in Fixed Deposits and Inter Corporate Deposits.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

per Arpit K Patel Place of signature : Ahmedabad Partner Date : May 1, 2015 Membership Number: 34032


Mar 31, 2014

We have audited the accompanying financial statements of Adani Ports and Special Economic Zone Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Companies Act, 1956 ("the Act") 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 March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 those books;

(c) The Balance Sheet, Statement of Profit and Loss 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 Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Affairs;

(e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 on other legal and regulatory requirement of our report of even date

Re: Adani Ports and Special Economic Zone Limited (''the Company'')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion, physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The inventory of stores and spares, fuel and lubricants has been physically verified by the management during the year. In our opinion, the frequency of such physical verification is reasonable.

(b) The procedures of physical verification of inventory 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 physical verification.

(iii) (a) The Company has granted loan to fifteen companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 4,118.91 crore and the year end balance of loans granted to such parties was Rs. 2,974.67 crore.

(b) The Company has given interest-free loans of Rs. 961.04 crore to certain subsidiaries and an associate company. According to the information and explanations given to us, and having regard to management''s representation that the interest free loans are given to subsidiaries of the Company in the interest of the Company''s business, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of loan granted, repayment of the principal amount is as stipulated except where loan granted are repayable on demand. The Interest (excluding interest free loan) is generally payable annually except where the Company has discretion.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 223.00 crore and the year end balance of loans taken from such party was Rs. Nil.

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest has been regular.

(iv) Part of the Company''s purchases of fixed assets and sale of services are stated to be of unique and specialized nature, and hence, in such cases, the comparison of prices with the market rates or with purchases from/sales to other parties cannot be made. Read with the above, 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. The activities of the Company do not involve sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in internal control system of the company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that there are no particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of the Companies (Auditor''s Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the processing activity pertaining to harboring, berthing, docking, elevating, towing, handling and warehousing products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory 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.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, the dues outstanding of service tax, customs duty, excise duty and income tax on account of any dispute, are as follows:

(Rs. In Crore)

Name Nature of Tax Amount Period to which of the reported in the amount statute FY 2014 relates

Customs Custom Duty 2.00 June, 2008 Act, 1962

bCustoms Custom Duty 0.27 November, 2004 Act, 1962

Customs Custom Duty 0.14 July, 2003 Act, 1962

Customs Custom Duty 0.25 August, 2007 Act, 1962

Finance Service Tax 6.72 December, 2004 to Act, 1994 March, 2006

Name of the Statue Forum where dispute is pending

Customs Act, 1962 Commissioner of Customs and Central Excise, Ahmedabad

Customs Act, 1962 Customs, Excise and Service Tax Appellate Tribunal, Mumbai

Customs Act, 1962 Assistant Commissioner of Customs, Mundra

Customs Act, 1962 Deputy Commissioner of Customs, Mundra

Finance Act, 1994 High Court of Gujarat

Name Nature of Tax Amount Period to which of the reported in the amount statute FY 2014 relates

Finance Service Tax 0.56 October, 2003 to Act, 1994 August, 2005

Service Tax 42.51 April, 2006 to September, 2006

Service Tax 33.48 October, 2007 to September, 2008

Service Tax 38.77 October, 2008 to September, 2009

Service Tax 0.61 October, 2009 to March, 2010

Service Tax 58.44 October, 2009 to September, 2011

Service Tax 31.08 April, 2011 to March, 2012

Finance Service Tax 6.72 April, 2004 to Act, 1994 August, 2009

Service Tax 0.15 April, 2009 to March, 2010

Service Tax 0.02 Financial year 2010-11

Income Tax Income Tax 9.74 AY 2009-10 Act, 1961 Income Tax 0.92 AY 2010-11

Income Tax 51.77 AY 2011-12

Name of the Statue Commissioner (Appeals) Rajkot

Finance Act, 1994 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Finance Act, 1994 High Court of Gujarat

Commissioner of Service Tax, Ahmedabad

Commissioner of Service Tax, Ahmedabad

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(xii) 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.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been invested in Fixed Deposits and given as Inter-Corporate deposits.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used 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) According to information and explanation given to us and based on records, the Company has created security in respect of debentures issued.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP ICAI Firm Registration Number: 101049W

Chartered Accountants

per Arpit K. Patel

Place of Signature : Ahmedabad Partner

Membership Number: 34032

Date: May 15, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Adani Ports and Special Economic Zone Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 40 to the financial statements recording sale of investments in Australia subsidiaries, on the basis indicated in the note, whereby profit of Rs. 70.01 crores have been recognized in the books. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 on other legal and regulatory requirement of our report of even date

Re: Adani Ports &Special Economic Zone Limited (''the Company'')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) As referred in note 33, the Company is holding assets of the value of Rs. 1,013.38 crores as held for sale as at year end. Based on the information and explanations given by the management and on the basis of audit procedures performed by us, we are of the opinion that fixed assets held for sale has not affected the going concern status of the Company.

(ii) (a) The inventory of stores and spares, fuel and lubricants has been physically verified by the management during the year. In our opinion, the frequency of such physical verification is reasonable.

(b) The procedures of physical verification of inventory 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 physical verification.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(iv) Part of the Company''s purchases of fixed assets and sale of services are stated to be of unique and specialized nature, and hence, in such cases, the comparison of prices with the market rates or with purchases from/sales to other parties cannot be made. Read with the above, 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. The activities of the Company do not involve sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in internal control system of the company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that there are no particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (v)(b) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the processing activity pertaining to harboring, berthing, docking, elevating, towing, handling and warehousing products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Undisputed statutory 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 have generally been regularly deposited with the appropriate authorities though there have been slight delay in deposit of service tax in few cases and wealth-tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, the dues outstanding of service tax, customs duty and excise duty on account of any dispute, are as follows:

Name Nature of dues Amount Period to which Forum where of the (Rs. in Crores) the amount dispute is pending statue relates

Customs Show cause notice from the Custom Authorities for 0.27 November, Customs, Excise and Act, 1962 recovery of custom duty in relation to import of Crude 2004 Service tax, Appellate Petroleum Oil Tribunal, Mumbai

Customs Show cause notice from the Custom Authorities for 0.14 July, 2003 Assistant Commissioner Act, 1962 recovery of custom duty in relation to import of of Customs, Mundra Acrylonitrile

Customs Demand Notice from Deputy Commissioner of Customs 0.25 August, Deputy Commissioner Act, 1962 directing to pay duty by holding that Company wrongly 2007 of Customs, Mundra availed duty benefit under DFCEC Scheme on import of equipment

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks or debenture holders. The Company has not borrowed funds from financial institutions.

(xii) 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.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been invested in fixed deposits and given as Inter-Corporate deposits.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used 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) According to information and explanation given to us and based on records, the Company has created security in respect of debentures issued in earlier and current year except for debentures aggregating to Rs. 989 crores issued during the year. We are informed by the management that the Company is taking steps to create security for the debentures.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP

ICAI Firm Registration Number: 101049W

Chartered Accountants

per Arpit K. Patel

Place : Ahmedabad Partner

Date: May 15, 2013 Membership Number: 34032


Mar 31, 2012

1. We have audited the attached Balance Sheet of Adani Ports and Special Economic Zone Limited (formerly known as Mundra Port and Special Economic Zone Limited) ('the Company') as at March 31, 2012 and also the statement of profit and loss and the cash flow statement for the 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 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 (as amended) ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose 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 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, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, statement of profit and loss and 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;

v. On the basis of the written representations received from the directors as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. 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 March 31, 2012;

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date

Re: Adani Ports & Special Economic Zone Limited ('the Company')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the

frequency of such physical verification is reasonable.

(b) The procedures of physical verification of inventory 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 physical verification.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans,

secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(iv) Part of the Company's purchases of fixed assets and sale of services are stated to be of unique and specialized nature, and hence, in such cases, the comparison of prices with the market rates or with purchases from/sales to other parties cannot be made. Read with the above, 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 goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in internal control system of the company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion

that there are no particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (v)(b) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the processing activity pertaining to harboring, berthing, docking, elevating, towing, handling and warehousing products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues

including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of service tax, customs duty and excise duty on account of any dispute, are as follows:

Name Nature of dues Amount Period to which Forum where of the (Rs in lacs) the amount dispute ispending statute relates

Customs Show cause notice from the Custom 26.60 November, Customs, Excise and Act, 1962 Authorities for recovery of custom duty 2004 Service Tax Appellate in relation to import of Crude Petroleum Oil Tribunal, Mumbai

Customs Show cause notice from the Custom 14.20 July, 2003 Assistant Commissioner Act, 1962 Authorities for recovery of custom duty in of Customs,Mundra relation to import of Acrylonitrile

Customs Show cause notice from the Custom 207.15 March, Customs, Excise and Act, 1962 Authorities for recovery of custom duty, 2005 Service Tax Appellate fine and penalty on the import of a tug Tribunal, Ahmedabad and bunkers Customs Demand Notice from Deputy Commissioner 4.62 2005-06 Deputy Commissioner Act, 1962 of Customs directing to pay education cess of Customs, Mundra against import of Steel Sole Plates

Customs Demand Notice from Deputy Commissioner 25.03 August, Deputy Commissioner Act, 1962 of Customs directing to pay duty by holding 2007 of Customs, Mundra that Company wrongly availed duty benefit under DFCEC Scheme on import of equipment

Customs Demand Notice from Assistant Commissioner 1.28 January, Commissioner of Act, 1962 of Customs directing to pay duty by holding 2008 Customs(Appeals), that Company wrongly availed duty benefit Mumbai on import of equipment components Customs Demand Notice from Commissioner of 200.00 June, 2008 Commissioner of Act, 1962 Customs for recovery of penalty in Customs & Central connection with import of aircraft, Excise, Ahmedabad owned by Karnavati Aviation Private Limited - Subsidiary of the Company.

Name Nature of dues Amount Period to which Forum where of the (Rs in lacs) the amount dispute is pending statute relates

Customs Show cause notice from the Cust om 5.00 May, 2010 Commissioner of Act, 1962 Authorities for recovery of penalty in Customs (Appeals), relation to import of gas oil (HSD) Kandla

Finance Show Cause Notice from Commissioner of 671.57 December, High Court of Gujarat Act, 1994 Customs and Central Excise disallowing and 2004 to recovering duty, interest and penalty holding March, 2006 that Company wrongly availed Service Tax Credit/ Cenvat Credit and Education Cess on steel and cement etc. (Net of deposit Rs. 450 lacs) Finance Show Cause Notice from Commissioner 4,608.83 April, 2006 Commissioner of Act, 1994 of Customs and Central Excise disallowing to March, Customs and Central and recovering duty, interest and penalty 2009 Excise, Rajkot holding that Company wrongly availed 797.90 April, 2009 Commissioner of Service Tax Credit/ Cenvat Credit and to March, Service Tax, Education Cess on steel and cement etc. 2010 Ahmedabad. 80.79 October, Commissioner of 2009 to Service Tax, March, 2010 Ahmedabad. 114.14 April, 2010 Commissioner of to Service Tax, September, Ahmedabad. 2010

Finance Show cause notices received from 672.46 April, 2004 High Court of Act, 1994 Commissioner of Customs and Central to August, Gujarat Excise, Rajkot and Commissioner of Service 2009 Tax, Ahmedabad in respect of levy of 15.48 April, 2009 Customs, Excise and service tax on various services provided by to March, Service Tax Appellate the Company and wrong availment of 2010 Tribunal, Ahmedabad CENVAT credit by the Company. 1.78 2010-11 Commissioner of Service Tax, Ahmedabad

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(xii) 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.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for credit facilities taken by the body corporates from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used 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 created security or charge in respect of debentures issued in earlier years and outstanding at the year end.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates

Firm registration number: 101049W

Chartered Accountants

per Arpit K. Patel

Place: Ahmedabad Partner

Date: May 14, 2012 Membership No.: 34032


Mar 31, 2010

1. We have audited the attached Balance Sheet of Mundra Port And Special Economic Zone Limited (the Company) as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement 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 (as amended) ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we draw attention to Note No. 9 in Schedule 23 to the financial statements in respect of eligibility for income tax holiday as per provisions of Section 80-IAB of the Income Tax Act, 1961.

5. Further to our comments in the Annexure referred to 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and 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;

v. On the basis of the written representations received from the directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. 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 March 31,2010;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph [3] of our report of even date Re: Mundra Port And Special Economic Zone Limited (the Company)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets 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 reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory 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 physical verification.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured loans to two subsidiary companies during the year, one of which is a wholly owned subsidiary. In respect of the said loans, the maximum amount involved during the year was Rs. 15,136.50 lacs and the year end balance of loans granted to such parties was Rs. 14,986.50 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans, including interest free loan given to wholly owned subsidiary, are not prima facie prejudicial to the interest of the Company.

(c) The loans granted are repayable on demand and there is no repayment schedule. The interest wherever applicable is payable on demand.

(d) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, there are no overdue amounts.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (iii) (f) and (g) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company.

(iv) Part of the Companys purchases of fixed assets and sale of services are stated to be of unique and specialized nature, and hence, in such cases, the comparison of prices with the market rates or with purchases from/sales to other parties cannot be made. Read with the above, 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, no major weakness has been noticed in the internal control system in respect of these areas. The Company does not sell any goods due to the nature of its business.

(v) According to the information and explanations provided by the management, we are of the opinion that there are no particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) As the Company does not manufacture any products, the provisions of clause (viii) of the Companies (Auditors Report) Order, 2003 (as amended) regarding maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 are not applicable.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory 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.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues outstanding for income-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, except as follows:

Name of the Nature of dues Amount statute (Rs. lacs)

Customs Act, 1962 Show cause notice from the Custom Authorities 26.60 for recovery of custom duty in relation to import of Crude Petroleum Oil

Customs Act, 1962 Show cause notice from the Custom Authorities 14.20 for recovery of custom duty in relation to import of Acrylonitrile

Customs Act, 1962 Show cause notice from the Custom Authorities 207.15 for recovery of custom duty, fine and penalty on the import of a tug and bunkers Customs Act, 1962 Order from Deputy Commissioner of Customs, 2.62 Mundra directing to pay differential duty and penalty for short delivery of imported goods of various customers

Customs Act, 1962 Order from Deputy Commissioner of Customs 7.59 directing to pay differential duty and penalty for short delivery of imported goods of various customers

Customs Act, 1962 Demand Notice from Deputy Commissioner 4.62 of Customs directing to pay education cess against import of Steel Sole Plates

Customs Act, 1962 Demand Notice from Deputy Commissioner of 25.03 Customs directing to pay duty by holding that Company wrongly availed duty benefit under DFCEC Scheme on import of equipment

Customs Act, 1962 Demand Notice from Assistant Commissioner 1.28 of Customs directing to pay duty by holding that Company wrongly availed duty benefit on import of equipment components

Finance Act, 1994 Show Cause Notice from Commissioner of 871.57 Customs and Central Excise disallowing and recovering duty, interest and penalty holding that Company wrongly availed Service Tax Credit/Cenvat Credit and Education Cess on steel and cement etc. (Net of deposit Rs. 250 lacs)

Finance Act, 1994 Show Cause Notice from Commissioner of 4,608.83 Customs and Central Excise disallowing and recovering duty, interest and penalty holding that Company wrongly availed Service Tax Credit/Cenvat Credit and Education Cess on steel and cement etc.

Customs Act, 1962 Demand Notice from Commissioner of Customs 200.00 for recovery of penalty in connection with import of aircraft, owned by Karnavati Aviation Private Limited, Subsidiary of the Company.



Name of the Period in which the Forum where dispute Statue amount relatesis pending

Customs Act, 1962 November, 2004 Customs, Excise and Service Tax Appellate Tribunal, Mumbai

Customs Act, 1962 July 3, 2003 Assistant Commissioner of Customs, Mundra

Customs Act, 1962 March, 2005 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Customs Act, 1962 March, 2007 Commissioner of Customs (Appeals), Ahmedabad

Customs Act, 1962 February, 2007 Commissioner of Customs (Appeal), Ahmedabad

Customs Act, 1962 2005-06 Deputy Commissioner of Customs, Mundra

Customs Act, 1962 August, 2007 Deputy Commissioner of Customs, Mundra

Customs Act, 1962 January, 2008 Assistant Commissioner of Customs, Mumbai

Finance Act, 1994 2005-06 High Court of Gujarat

Finance Act, 1994 April, 2006 to Commissioner of Customs and March, 2009 Central Excise, Rajkot

Customs Act, 1962 June, 2008 Commissioner of Customs, Ahmedabad

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

(xii) 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.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees for credit facilities taken by the body corporates from banks and financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used 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) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 11,000 debentures of Rs. 10,00,000 each. The Company has created security or charge in respect of debentures issued.

(xx) The Company has not raised any money by public issues during the year. The management has disclosed the end use of monies during the year, out of public issue raised in the earlier year (Refer Note No. 23 in Schedule 23) and the same has been verified by us.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W

Chartered Accountants

per Arpit K. Patel Partner Membership No.: 34032

Place: Ahmedabad

Date: May 17,2010



 
Subscribe now to get personal finance updates in your inbox!