ESSAR PORTS LIMITED 36th Annual Report 2011-12 · Essar Ports Limited (EPL) is part of the multinational Essar Group, one of India’s largest conglomerates with a presence across

ESSAR PORTS LIMITED 36th Annual Report 2011-12

CONTENTS

MANAGEMENT INSIGHT

16 MD & CEO’s Message

CSR

18 Sustainability at Essar

COMPANY PROFILE

02 Essar Ports: Identity

04 Presence

06 Growth Plans

07 Financial Performance

GOVERNANCE

22 Profiles of the Board of Directors

26 Awards

27 Corporate Information

28 Directors’ Report

34 Corporate Governance Report

REVIEW OF FACILTIES

08 Vadinar

10 Hazira

12 Paradip

14 Salaya

FINANCIALS

43 Standalone Financial Statements

77 Consolidated Financial Statements

119 Financial Statements of Subsidiaries

Fully mechanised ports

Delivers superior service quality

EPL develops assets which are not

only fully-mechanised but environment-

friendly as well. A keen focus on

world-class infrastructure allows it to

deliver superior service quality to its

customers.

Faster turnaround time

Improves efficiency

EPL’s facilities are highly efficient due to

fast turnaround times. These efficiencies

are dependent on deep draft, quick

evacuation, and connectivity to the

hinterland through rail and road and

extensive storage facilities.

Forward expansion with consistent growth

Results in significant returns

EPL’s consistent capacity expansion,

over the years, ensures that it will be

well-positioned to capture the growth

of the Indian ports sector in the years to

come. Growth in revenues has mirrored

EPL’s expansion in capacity. A 63%

CAGR growth in revenues over the last 3

years translated into a topline of

Rs. 1,131 crore in FY12.

SCALEAs the 2nd largest private sector port company

in India

SERVICE QUALITYWith the implementation of superior infrastructure

EFFICIENCYThrough the fastest turnaround times for cargo

evacuation in the industry

GROWTHWith consistent capacity addition over the years

VALUEThrough assured earnings from anchor customers

1

Greater scale

Unlocks growth potential

Essar Ports Limited (EPL) is the second

largest private sector port company in

the country with respect to capacity and

throughput. The Company’s current

capacity of 88 Million Metric Tonnes Per

Annum (MMTPA) is expected to increase

to 158 MMTPA by FY14. The current cargo

volume of 43 MMTPA is to be increased to

125 MMTPA by FY15, in line with the

capacity expansion.

Improved value through assured earnings

Facilitates long-term visibility

EPL’s anchor customers – Essar Steel,

Essar Oil and Essar Energy Plc ensure

secured annuities with respect to revenues

and cargo volumes. Further, Take-or-Pay

(ToP) agreements with these customers

provide visibility of long-term earnings to

the Company.

2 Annual Report 2011-12

ESSAR PORTS

3

Essar Ports Limited (EPL) is part of the

multinational Essar Group, one of India’s

largest conglomerates with a presence across

the energy, steel, infrastructure and services

sectors. The second largest private sector

ports company in India, by capacity and

throughput, EPL operates ports for handling

liquid, dry bulk, break bulk and general cargo.

Operational facilities at Vadinar and Hazira,

Gujarat, with an aggregate capacity of

88 MMTPA, are used primarily by anchor

customers – Essar Steel, Essar Oil and Essar

Power. These facilities handle incoming raw

materials such as crude oil, iron ore / pellets,

limestone, dolomite and coal, and outgoing

finished goods such as petroleum products

and steel products.

EPL is in the process of increasing its overall

capacity to 158 MMTPA with expansion

projects at Hazira, a new port at Salaya,

Gujarat, and two terminals at Paradip, Odisha.

These projects will address the expected

increase in traffic from plant expansions by the

Company’s anchor customers, and support

additional business from third-party customers.

IDENTITY

COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS


PRESENCE

EPL’S SITES ARE STRATEGICALLY LOCATED

BOTH ON THE EAST AND WEST COASTS OF

INDIA.

Existing and upcoming sites at Vadinar, Hazira

and Salaya are on the western coast of India

in Gujarat to service the growing demand of

the land-locked northern, north-western and

central regions of India. Two days away from

major ports in the Middle East, the state is

responsible for importing 55% of India’s crude

requirement.

Paradip, on the eastern coast of India in

Odisha, is an important location for the import

of coal. The sites at Paradip will service mineral

and metals-rich eastern India and address

cargo servicing requirements for the steel and

power industries.

5

VADINAR

58 MMTPA Current Capacity

HAZIRA

30 MMTPA Current capacity

50 MMTPA Expanded capacity

SALAYA

20 MMTPA

Capacity (under construction)

16 MMTPA Current Capacity

14 MMTPA

Capacity (under construction)

PARADIP



EPL is in the process of expanding

its aggregate capacity to

158 MMPTA by 2014 to address

the rising cargo handling needs of

anchor customers and third-party

clients. The expansion project

at the Vadinar Oil Terminal

has increased its capacity to

58 MMTPA. The capacity of the

Hazira facility is to be increased

to 50 MMTPA. This will be

accomplished by the addition of

20 MMTPA capacity, through

the development of 1,100m of

waterfront. The balance capacities

will be addressed through a

20 MMTPA new bulk terminal in

Salaya, Gujarat, a 16 MMTPA

bulk cargo export terminal and

a 14 MMTPA coal terminal at

Paradip Port in Paradip, Odisha.

Of the total expanded capacity

GROWTH PATH58 MMTPA will be dedicated to

servicing wet cargo, i.e. crude

oil and petroleum products, at

Vadinar while 100 MMTPA across

Hazira, Salaya and Paradip will

be utilised in servicing dry, i.e.

general, break bulk and

project cargo.

7

FINANCIAL PERFORMANCE

CARGO MIX

Crude (SPM)

Liquid Product (Jetty)

Liquid Product (Road/Rail)

Liquid Intermediate

Dry Bulk

Breakbulk/Containers

Project Cargo

MMTPA

Volume: 39.55 MMTPA

2011

13.2

8.7

5.01

8.53

3.140.92

0.05

Crude (SPM)

Liquid Product (Jetty)

Liquid Product (Road/Rail)

Liquid Intermediate

Dry Bulk

Breakbulk/Containers

Project Cargo

MMTPA

Volume: 43.23 MMTPA

12.18

8.294.3410.13

6.4

1.78 0.11

2012


FY11 FY120

-20

-40

20

40

60

30.0

63.1

64.0

PROFIT AFTER TAX (RS. CRORE)

FY10 FY11 FY12Vadinar Hazira

1000

800

600

400

200

0

326.5

515.4

896.7

326.5

368.3

147.1

596.2

300.5

EBITDA (RS. CRORE)

1200

1000

800

600

400

200

0FY10 FY11 FY12

Vadinar Hazira

427.4

502.9

244.9

698.9

432.9

427.4

747.4

1131.8

REVENUES (RS. CRORE)

-60

FY10


Essar Ports’ Vadinar facility is an integrated,

all-weather deep draft oil terminal at Vadinar,

Gujarat, with marine, storage and evacuation

facilities. It is one of the deepest natural draft

terminals in India and does not require any

maintenance dredging. Vadinar is situated in the

Jamnagar district, Gujarat, which is among the

largest refining hubs in the world. With a current

capacity of 58 MMTPA, Vadinar is well-positioned

to handle the crude and petroleum product

requirements of customers.

The offshore Single Point Mooring (SPM) facility

at the terminal is capable of receiving crude oil

through VLCCs (Very Large Crude Carriers) up to

325,000 Dead Weight Tonne (DWT).

A 12 MMTPA expansion project was

commissioned in April, 2011 to meet the

increased liquid cargo requirements of Essar Oil.

An anchor customer, Essar Oil recently enhanced

its refinery capacity to 20 MMTPA. The project

involved an additional product jetty, Jetty B. It

also included development of crude oil tanks

and product tanks for the storage of refined and

intermediate petroleum products and a new road

gantry. Jetties A and B are capable of servicing

coated Aframaxes of up to 100,000 DWT.

VADINAR

STORAGE CAPACITIES

1,136,300 KLCrude and other feedstock tank storage

TOTAL CAPACITY

58 MMTPAat Vadinar oil terminal

1,806,438 KLProduct and intermediate storage tanks

MARINE CAPACITIES

32 m draftSPM :

20 m draftJetty A:

16 m draftJetty B:

Vadinar provides port and terminal handling, marine services and evacuation facilities for crude oil, intermediate products and petroleum products, including:

> Unloading of crude oil and

product evacuation for the export market and domestic markets;

> Product evacuation through

marine, road & rail

infrastructure

> Storage and handling of crude oil and refined petroleum products.

SERVICES

During the year under review,

Vadinar made significant

achievements.

These are:

> 12 MMT increase in the

capacity of the terminal, from

46 MMTPA to 58 MMTPA

> 4% increase in cargo volume

from 30.05 MMT in FY11 to

31.21 MMT in FY12

> The successful renewal of ISO

2800 Security Management

and ISO 9001-2008 Quality

Management System

certifications

OPERATIONAL HIGHLIGHTS

9

> 6 road gantries

> Railcar loading facilities to

simultaneously load 2 rakes

> On-site facility for transporting

0.5 MMTPA LPG through the

GAIL LPG pipeline

REVIEW OF FACILITIES

EVACUATION FACILITIES

CONNECTIVITY

Road:

Connected to the four-lane

National Highway 8B by a 130

km four-lane state highway

Rail:

Connected to a broad-gauge

Western Railway line by an 11 km

branch line from Modhpur

CONNECTIVITY

Road:

Connected to the four-lane

National Highway 8B by a 130 km

four-lane state highway

Rail:

Connected to a broad-gauge

Western Railway line by an 11 km

branch line from Modhpur



> All-weather, deep draft berth

with direct berthing for vessels

> Dedicated navigational channel

FACILITIES

Hazira provides port and terminal

handling, marine services and

cargo handling services for dry

bulk, break bulk and project

cargoes, including:

> Pilotage and towage services

to vessels

> Mechanised cargo handling

services for unloading dry bulk

cargo such as iron ore/pellets,

limestone and thermal and

coking coal

> Loading of finished steel cargo

for the export market and the

domestic market

> Loading and unloading of

project cargo

SERVICES

12.02 MMTCargo volume for FY12

243 Vessels handled in FY12

ISO 9001:2008,

ISO 14001:2004

& OHSAS

18001:2007 Certifications awarded

at Hazira bulk terminal

TOTAL CAPACITY

30 MMTPA

11

The Essar Bulk Terminal at Hazira, Gujarat,

(Hazira) is a 30 MMTPA all-weather, deep draft

dry bulk port and terminal. The port handles

iron ore, coal, limestone, break bulk cargo

such as pipes and coils and project cargo. The

Hazira terminal can accommodate lightered

Capesizes and fully-loaded Minicape vessels of

upto 105,000 DWT.

The Hazira terminal has fully mechanised

facilities and modern equipment for handling

break bulk cargo.

HAZIRA

OPERATIONAL HIGHLIGHTS CONNECTIVITY

Road:

Connected to National Highway 6

Rail:

Proximity to the Mumbai-Delhi

railway line

> A 26% increase in cargo handled, from 9.50 MMT in FY11 to 12.02 MMT in FY12

> An increase in total vessels handled from 190 vessels in FY11 to 243 vessels in FY12

> Third-party cargo handled

> ISO 9001:2008 Quality Management, ISO 14001:2004 Health & Safety, OHSAS 18001:2007 Environment certifications awarded

> In principal approval received from the Indian Railways for a double track, high speed, electrified line connectivity to the Mumbai-Delhi railway line

EXPANSION PROJECT

EPL plans to implement a

20 MMTPA expansion project at

Hazira to handle general cargo,

coal and containers and to

significantly extend the length of

the existing berth. The new facility

will have berth drafts of 16 m

and will be able to handle fully-

loaded Capesized carriers.



The Essar Bulk Terminal at Paradip, Odisha,

(Paradip) is an existing 230 m long berth

at the Paradip Port – CQ3 (Central Quay

3). With a planned capacity of 16 MMPTA,

Paradip is being mechanised and upgraded

on the central dock. Paradip will handle dry

bulk cargo, including general cargo for Essar

Steel. An anchor customer, Essar Steel, is

constructing two 6 MMTPA General cargo

pelletisation plants in Paradip. Proximity of

the terminal to these plants allows the easy

movement of ore to Essar Steel’s plant in

Hazira. The terminal is also strategically located

close to the integrated steel plants of SAIL,

Tata Steel, Jindal Steel & Power Ltd., Bhushan

Steel and Visa Steel. It is also in proximity to

several thermal power plants using imported

coal to blend their fuel. During the year under

review, 92% of the mechanisation of Paradip’s

general cargo berth was completed.

PARADIP

An all-weather, mechanised,

deep draft berth with the ability

to handle large size ships will be

commissioned by Q3 FY13.

FACILITIES (DRY BULK)

16 MMTPA Capacity at Paradip dry bulk berth

14 MMTPACapacity at Paradip coal berth

92%Construction of dry bulk berth

completed as of March 31, 2012

17.1 mOperational draft at coal berth

12.5 mOperational draft at dry bulk berth

13

Essar Paradip Terminals is being

developed as a greenfield, all-

weather, deep draft coal berth

at the Paradip Port. The project

will comprise of a 17.1 m deep

draft coal berth for third-party

customers with a capacity of

14 MMTPA. The terminal will

be able to accommodate fully-

loaded Capesized vessels of up to

170,000 DWT.

As a dedicated third-party

terminal, it is the first Public-

ESSAR PARADIP TERMINALS CONNECTIVITY

Road:

Connected to National Highway

5A

Rail:

The terminal’s stockyard will have

connectivity with the main railway

line

Private Partnership (PPP) project

for Essar. The berth will handle

coking and thermal coal. The

Paradip Port Trust has granted

Essar Paradip Terminals a

concession for the development

and operation for a period of

30 years. Under the terms of

the concession agreement,

coal imports shall be exclusively

handled at the coal berth, during

the exclusivity period of the initial

two years.



The following facilities are being

developed at Salaya:

> A fully mechanised berth with

an operational draft

of 14 m

> A dedicated navigational

channel

FACILITIES

15

The Essar Bulk Terminal Salaya (Salaya) is

being constructed as a 20 MMTPA dry bulk

port and terminal facility at the Salaya port,

Gujarat.

The terminal will be capable of handling

Minicape vessels of up to 105,000 DWT. The

terminal will primarily cater to incoming and

outgoing dry bulk cargo requirements with a

focus on coal, pet coke and bauxite. Salaya

has received an approval for construction of

the jetty and associated port and terminal

facilities. During the year under review, 53%

of the construction was completed at Salaya.

Additionally, environment and CRZ clearances

were received. Forest clearance for part of the

project is awaited.

SALAYA

Salaya will provide cargo handling

services for power plants

operated by the Essar Group

and also handle cargo for third

party customers.

SERVICES CONNECTIVITY

Road:

Connected by a 135 km

four-lane state highway to the

four-lane National Highway 8B

Rail:

15 km from the Jamnagar-Okha

line

20 MMTPACapacity at Salaya dry bulk terminal

53%Construction completed as of

March 31, 2012

14 mOperational draft at the terminal



Recently, we have entered into a strategic partnership with Port of Antwerp International – Europe’s second largest port. This partnership is expected to increase the cargo flow between Port of Antwerp and your Company’s terminals. The partnership will also facilitate in developing world class port facilities and further improve the operational efficiency of our terminals.

“

“

> Rajiv Agarwal

MD & CEO’S MESSAGE

17

Infrastructure is the backbone of an economy. India urgently needs quality infrastructure to maintain its growth momentum and further accelerate the growth of its economy. Ports are part of India’s core infrastructure needs which have to be developed rapidly to cater to the growing cargo handling requirements. Traffic at ports is expected to increase from around 900 MMPTA at present to 2,500 MMPTA by 2020. Considering the delay in the addition of port capacity and only a gradual progress in awarding and completion of projects, there will be surplus demand in port capacity. This means port assets will remain fully utilised over the next few years.

This was the first full year of operation of your Company after the demerger of the shipping, logistics and oilfields services businesses. Your Company has delivered a robust performance with increased cargo handling, revenue, EBITDA and profit. Compared to the port segment of the Company during FY11, before the demerger, revenue increased by 51% to Rs. 1,131 crore; EBITDA increased by 65% to Rs. 913 crore; and Net Profit more than doubled to Rs 63.9 crore in FY12. The strategy of having long-term contracts for cargo handling with our anchor customers has insulated us to a certain extent from the vagaries of the market.

Your Company commissioned a 12 MMTPA expansion project at Vadinar on April 1, 2011 as per schedule thereby increasing the cargo handling capacity from

76 MMTPA to 88 MMTPA. Other under-construction projects at Paradip, Odisha, and Salaya, Gujarat, are progressing well. A 16 MMPTA dry bulk terminal for export at Paradip is expected to be commissioned during FY13 while 50% of work for the coal terminal at Salaya has been completed. Construction activities of the coal terminal at Paradip and the expansion project at Hazira are expected to start in the FY13.

We believe that partnership improves capabilities in today’s globalised world. Recently, we have entered into a strategic partnership with Port of Antwerp International which is an investment arm of Port of Antwerp – Europe’s second largest port. This partnership is expected to increase the cargo flow between Port of Antwerp and your Company’s terminals. The partnership will also facilitate in developing world class port facilities and further improve the operational efficiency of our terminals.

The port sector plays a significant role in supporting growth in the Indian economy. Huge demand for cargo handling services highlights the growth potential of the sector. Your Company offers a comprehensive range of port and terminal services for liquid, dry bulk, break bulk and general cargo.

We firmly believe in our business model for sustainable growth. We have created world-class facilities for our customers by reducing their costs and thereby improving their competitiveness. We believe in symbiotic relationships where the

progress of our customers leads to our progress.

We are focused on developing assets that are environmentally friendly and offer world class infrastructure. Your Company has an exemplary track record in health, safety and environment. Both of our terminals have achieved zero Loss Time Injury (LTI) during the year. Your Company contributes significantly to the development of local communities through various CSR initiatives undertaken by your Company.

We have progressed well in the last 5 years; in 2007 our first facility at Vadinar was commissioned. We are one of the fastest growing port companies in India with presence at strategic locations on the west and east coast of India. We expect our port capacity to reach 158 MMTPA by 2014 when all our projects under construction and development get commissioned.

I would like to express my sincere gratitude to the Board of Directors for their support and guidance and to all shareholders, stakeholders and employees for their unwavering support during the year. As the manufacturing sector grows and trade increases, traffic at ports will increase substantially. We will be well-positioned to contribute to the growth of the sector.

With Best Wishes,

Rajiv Agarwal

Managing Director & CEO

“ “This was the first full year of operation of your Company after the demerger of the shipping, logistics and oilfields services businesses. Your Company has delivered a robust performance with increased cargo handling, revenue, EBITDA and profit.



SUSTAINABILITY AT ESSAR

19

> Enhanced risk management

and mitigation

> Improving and sustaining the

quality of products and services

> Transparency in disclosure,

compliance and assurance

> Building a learning organisation

with an engaged workforce

> Institutionalising the culture of

safety

> Engaging and investing in the

community

ECONOMIC

OBJECTIVES

SOCIAL

OBJECTIVESENVIRONMENTAL

OBJECTIVES

We will be a respected global entrepreneur, through the power of positive action

We are committed to innovative growth through our personal passion, reinforced by a professional mindset, creating value for all those we touch

OUR VISION

OUR MISSION

OUR SUSTAINABILITY

POLICY &

OBJECTIVES

> Environmental Impact

Assessment

> Enhanced pollution control and

waste management

> Reducing emissions and

carbon footprint

> Efficient resource management

At Essar, we have integrated our Mission with our sustainability policy and objectives to realise our vision of being a respected global entrepreneur.

We are committed to aligning individual business plans with key Environmental, Social and Governance (ESG) objectives.

We benchmark our ESG performance, guided by our policies at the Group and business levels.

Our key sustainability achievements include enhanced disclosure, reporting and assurance of our ESG performance, certification to management systems such as the ISO 9001, OHSAS 18001 and ISO 14001, and establishing the Essar Foundation to spearhead our social responsibility efforts at all our operational sites.

“Sustainable development is integral to Essar Group’s over-arching business model. Our approach to sustainability focuses on the economic, social and environmental activities at all our operational locations around the world.

“



ENVIRONMENT

Mangrove Plantation at Dandi

and Navsari

Essar has taken up the

responsibility for the plantation

and conservation of mangroves

near Dandi and Navsari in

Gujarat through an Ecological

Development programme. The

total area proposed to be covered

is about 500 hectares of which,

as on date, plantation in 400

hectares has been completed.

Tree Plantation drive

A large number of CSR initiatives

undertaken by the Essar

Foundation focus on children in

the age group of 0 to 6 years. The

aim is ‘to catch them young’ and

instill the right attitude towards

education and healthy living to be

carried forward for a lifetime.

With the aim of generating

interest in young minds, Essar

organised tree plantation drives for

kindergarten students in Vadinar.

Each child planted a sapling and

the responsibility of nurturing

the sapling was assigned to the

child. Teachers and the Essar

team explained the children the

importance of trees and how to

nurture the saplings. At the end

of the programme, all 52 children

were excited about caring for their

own sapling and promised to not

damage other plants in the school

premises while playing.

Coastal Cleanup

In order to ensure that the

residents of Mumbai can enjoy

clean and beautiful beaches,

Essar, in association with the

Coast Guard, conducts a Coastal

Clean-up campaign on the World

Environmental Day to clean up

the Chowpatty and Juhu beaches

in Mumbai. Many schools, social

groups from colleges, members of

the Coast Guard and employees

from the Company, including the

Company’s senior management

and staff, participate in the

campaign.

21

SOCIAL

Essar Salaya Stitching Centre

Taking forward the endeavour

to promote the spirit of

entrepreneurship in our

stakeholder communities, Essar

Foundation and Essar Bulk

Terminal (Salaya) Limited (EBTSL)

set up a stitching centre for

women and adolescent girls in the

Salaya municipality. Essar saw the

potential of the centre to foster

women’s empowerment in the

community and offered to adopt

the centre. The objective of the

centre is to create opportunities

for local women to expand their

horizons beyond the boundaries

of their small port town and

learn from the outside world. It

has since been renamed ‘Essar

Salaya Stitching Centre’ by the

community. The Essar Salaya

Stitching Centre is a joint initiative

between Essar and the Salaya

community, currently catering to

200 women and adolescent girls

from the community.

Essar has facilitated the stitching

centre with government and bank

linkages. Essar has provided

master trainers to increase

employability and marketability of

products prepared by the budding

entrepreneurs. State-of-the-

art industrial sewing machines,

personality development and adult

literacy programmes, exposure

visits and health awareness,

contribute to the annual calendar

of the centre, targeting the all-

round development of women.

Provision of Teaching Learning Materials

To promote art as an alternate means of imparting education, Essar organised the Extending Hand programme at Dwarka. Various drawing and painting related Teaching Learning

Materials (TLM) were provided to approximately 300 underprivileged children. Employees and their families also contributed in the initiative and provided biscuits, toys and clothes.

Adoption of the girl child

Every year more than 200 million children under the age of 5 are not able to reach their full potential due to poverty, gender discrimination, conflict, malnutrition, inadequate care and lack of educational opportunities. Essar took a conscious call and adopted a few girl children from Navyug School Vadinar. All expenses towards their education, including uniforms and books, are taken care of. It is ensured that each girl child gets the material and emotional support she needs to succeed in school and beyond through an enhanced approach that includes academic support, mentoring and life skills training.



PROFILES OF THE BOARD OF DIRECTORS

23

Mr. Anshuman Ruia

Director

Mr. Ruia is a Director on the Board of major companies of the Essar Group. With a Bachelor’s Degree in

Commerce, Mr. Ruia has over a decade of experience in overseeing the Group’s major businesses and has

been involved in new business ventures of the Group in India and overseas.

Mr. Ruia is known for his financial expertise and project execution skills. He has overseen the Group’s

BPO and Power businesses and was instrumental in creating Aegis, the BPO arm of Essar. He is also

responsible for the expansion and diversification of the Power business into new, renewable energy

sources and its entry into the transmission and distribution segment.

Mr. Rajiv Agarwal

Managing Director & CEO

Mr. Agarwal is a Chartered Accountant, Cost and Works Accountant and Company Secretary by

qualification with over 25 years of experience in industries like Retail, BPO, Telecom, Manmade fibres,

Shipping and Logistics.

He joined the Essar Group in 1997 as Chief Operating Officer in Essar Telecom. Mr. Agarwal held the

position of CEO and Director of The Mobile Store Limited and created a well-recognised and strong Indian

Telecom Brand in just 2 years.

Mr. Agarwal has won a series of accolades and awards including CEO of the Year Award – 2009 Asia

Retail Congress, Retail Professional of the Year (2008) at Franchise India and Best Retailer in Telecom

Segment. Mr. Agarwal is also a Director on the Board of various other Indian companies.

Mr. K. K. Sinha

Executive Director

Mr. Sinha has done his B.Sc (Engg.) in Mechanical Engineering from BIT, Sindri and has obtained his MBA

from FMS, University of Delhi.

Mr. Sinha has over 32 years of experience with industry majors such as Petronet India Ltd., Indian Oil

Corporation and Bokaro Steel Limited. Prior to joining Essar, he was Managing Director at Petronet India

Limited, a position he held since 2000. Mr. Sinha has served Indian Oil Corporation for over 27 years in

various capacities. As Executive Director, IOC he was responsible for implementation of the entire pipeline

projects of IOC. Mr. Sinha is also a Director on the Board of various other Indian companies.



Mr. Shailesh Sawa

Director Finance

Mr. Sawa is a qualified Chartered Accountant and Cost and Works Accountant. Mr. Sawa has a rich and

varied experience of around 25 years in the fields of Finance and Capital Markets.

Mr. Sawa has been associated with the Essar Group since 1994. He was associated with Essar Oil

Limited since January 2002 as the Chief Financial Officer of Essar Oil’s Refinery Expansion Division. He

spearheaded the fund-raising for the refinery expansion plan. He has been working with Essar Ports as

Director Finance for past 2 years.

Prior to joining Essar group, Mr. Sawa has been associated with many organisations like Gujarat Ambuja

Cements Limited, Modern Woollens Limited and Securities & Exchange Board of India.

Mr. Sawa is also a Director on the Board of various other Indian companies.

Mr. R. N. Bansal

Independent Director

Mr. Bansal is a Commerce Graduate and M.A. (Economics) and a Fellow Member of the Institute

of Chartered Accountants of India, Associate Member of the Institute of Chartered Secretaries and

Administrators, London and Associate Member of the Institute of Company Secretaries of India.

He joined the Department of Company Affairs in December 1956. He was the Registrar of Companies,

Punjab, Tamil Nadu and Maharashtra. Mr. Bansal has served as a Government Nominee Director on all

major Stock Exchanges of India. He was the Additional Director of Inspection & Investigation, Company

Law Board, New Delhi, Regional Director (Southern and Western Regions), Director (Investment) and

Additional Controller of Capital Issues and member of Company Law Board.

Mr. Bansal is also a recipient of the Silver Elephant Award. Mr. Bansal is serving as an independent

professional Director on the Board of various Indian public limited companies.

Mr. K. V. Krishnamurthy


Mr. Krishnamurthy, a Chartered Accountant, is a fellow member of the Indian Institute of Bankers and

was a member of its Governing Board. He has over 33 years of experience in Public Sector Banking.

His areas of specialisation include both domestic and international banking, treasury management, risk

management, foreign exchange management and human resource management.

He is credited with the remarkable turnaround of both Bank of India and Syndicate Bank. He has been

the Chairman/Director of nationalised banks like Bank of India, Bank of Baroda, Syndicate Bank and

other financial institutions like Indo Hong Kong International Finance Company Limited, Export Credit

Guarantee Corporation of India and Agricultural Finance Corporation of India Limited.

Mr. Krishnamurthy is also a Director on the Board of various Indian public limited companies.

25

Mr. Dilip J. Thakkar


Mr. Thakkar, a practicing Chartered Accountant by profession since last 46 years is a Partner of M/s. Jayantilal

Thakkar & Co. and Jayantilal Thakkar Associates, Chartered Accountants, Mumbai. Mr. Thakkar has vast

experience in the fields of Accounts, Finance, Taxation, FEMA etc.

Mr. Thakkar is also a Director on the Board of various Indian public limited companies.

Mr. Deepak Kumar Varma


Mr. Varma, a B.E. (Mechanical) and MBA by qualification, is a Management Consultant and Arbitrator by

profession and is a member of the Indian Council of Arbitrators.

During his career, Mr. Varma has held various senior management positions in SAIL. He was also the Chairman

and Managing Director of Hindustan Shipyard Limited, Chairman and Managing Director of Cochin Shipyard

Limited, Managing Director of National Ship Design & Research Centre (NSDRC), Chairman and Managing

Director of Rashtriya Chemical & Fertilizers Limited, Chairman and Managing Director of Fertilizers & Chemicals

(Cochin), Director & Group Leader of Oman India Fertilizers (OMIFCO), Chairman of the Standing Conference of

Public Enterprises, the Apex Body of all Central PSUs.

Mr. Varma is also a Director on the Board of various Indian public limited companies.

Mr. T. S. Narayanasami


Mr. Narayanasami has over 40 years of experience in the field of Banking and Finance.

Mr. Narayanasami was associated with Bank of India as Chairman and Managing Director. Prior to that, he was

the Chairman & Managing Director of Indian Overseas Bank. He was also the Chairman & Managing Director of

Andhra Bank. He has served as Executive Director of Punjab National Bank.

Mr. Narayanasami is also a Director on the Board of various other Indian companies.

Mr. Jan Adam

Director

Mr. Adam aged 50 years has studied Economics at the University of Antwerp and has specialised in

Accountancy from the University of Gent. Presently Mr. Adam is the Chief Financial Officer of Port of Antwerp

International UK Limited.

Mr. Adam has joined the Antwerp Port Authority as Chief Financial Officer in 2001 with overall responsibility over

the finance departments, IT, port dues, in house logistics and car fleet.

Mr. Adam is also a Director on the Board of various companies overseas.

COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS


VADINAR

HAZIRA

> Silver award for the Port

and Terminal sector at the

Greentech Safety Awards

2012 for achievements in

Safety Management

> Certifications received from the

Indian Register of Shipping:

> ISO 9001:2008 certification

for Quality Management

> ISO 14001:2004

certification for Environment

Management

> OHSAS 18001:2007

certification for

Occupational Health

AWARDS

> Gold award at the Royal

Society for the Prevention

of Accidents Occupational

Health and Safety Awards

2012 for prevention of

accidents and ill health

> Gold award at the Greentech

Safety Awards 2011 for

Safety Management

> Certifications received from

the American Bureau of

Shipping and Det Norkse

Veritas:

> ISO/TS 29001:2007

certification for Quality

Management – Petroleum

Sector

> ISO 9001:2008 certification

for Quality Management

> ISO 28000:2007

certification for Security

Management

> OCIMF Terminal

Compliance Verification

> Certificate of

Classification

> ISO 14001:2004

certification for Environment

Management

Essar Ports’ facilities

at Vadinar and Hazira

have received several

accreditations in

recognition of achieving

global standards of health,

safety and environment.

> OHSAS 18001:2007

certification for

Occupational Health

Vadinar has also been awarded

the Sword of Honour by the

British Safety Council for safety

management in the past

27

CORPORATE INFORMATION

BOARD OF DIRECTORS

Anshuman Ruia

Director

R. N. Bansal


Dilip J. Thakkar


K. V. Krishnamurthy


Deepak Kumar Varma


T. S. Narayanasami


Jan Adam

Director

Rajiv Agarwal

CEO & Managing Director

K. K. Sinha

Executive Director

Shailesh Sawa

Director Finance

COMPANY SECRETARY

Manoj Contractor

AUDITORS

Deloitte Haskins & Sells

AUDIT COMMITTEE

Anshuman Ruia

R. N. Bansal

K. V. Krishnamurthy

Deepak Kumar Varma

SHAREHOLDERS’ GRIEVANCE COMMITTEE

R. N. Bansal

Deepak Kumar Varma

Rajiv Agarwal

Shailesh Sawa

SHARE TRANSFER COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

COMPENSATION COMMITTEE

R. N. Bansal

Dilip J. Thakkar

Deepak Kumar Varma

REGISTRARS & TRANSFER AGENTS

Data Software Research Company Private Limited

19, Pycroft Garden Road, Off Haddows Road

Nungambakkam, Chennai 600006

Tel: (044) 2821 3738, 2821 4487 Fax: 2821 4636

e-mail: [email protected]

REGISTERED OFFICE

Administrative Building

Essar Refinery Complex

Okha Highway (SH-25)

Taluka Khambhalia

District Jamnagar, Gujarat 361 305

CORPORATE OFFICE

Essar House

11, Keshavrao Khadye Marg

Mahalaxmi, Mumbai 400 034



DIRECTORS’ REPORT

To the Members of Essar Ports LimitedYour Directors take pleasure in presenting the Thirty-Sixth Annual Report of your Company together with Audited

Accounts for the year ended March 31, 2012.

1. FINANCIAL RESULTS

The summary of consolidated and standalone financial results of your Company for the year ended March 31, 2012 are

furnished below:

(Rs. in crore)

Particulars Consolidated Standalone

For the

year ended

March 31, 2012

For the

year ended

March 31, 2011

For the

year ended

March 31, 2012

For the

year ended

March 31, 2011

Total Income 1,131.06 2,086.12 52.56 659.36

Total Expenditure 217.85 1,174.10 23.52 378.55

EBITDA 913.21 912.02 29.04 280.81

Less: Interest & Finance charges 420.81 473.75 92.40 184.07

Less: Provision for Depreciation 220.24 320.83 7.40 59.87

Profit before exceptional item 272.16 117.44 (70.76) 36.87

Less: Exceptional item 235.51 - - -

Profit after exceptional item and before Tax 36.65 117.44 (70.76) 36.87

Less: Provision for Tax (62.19) 34.60 (0.23) 16.00

Profit before Share of Minority Interest 98.84 82.84 (70.99) 20.87

Less: Share of Minority Interest 34.89 12.69 - -

Profit after Tax 63.95 70.15 (70.99) 20.87

Note: The consolidated and standalone financial figures for the year ended March 31, 2011 include the figures attributable

to the demerged shipping & logistics and oilfields services businesses upto September 30, 2010 and hence are not

comparable with the figures for the year ended March 31, 2012.

29


2. DIVIDEND Your Company proposes a dividend of 5% on the equity

shares of the Company.

3. MANAGEMENT DISCUSSION & ANALYSIS

Indian Economy and Infrastructure Sector The Indian Economy grew by a moderate 6.5% in FY12

compared to 8.4% in the last two years. In spite of this slowdown, India remains one of the fastest growing economies in the world. Manufacturing has showed signs of deceleration in FY12, with growth of Index of Industrial Production (IIP) slowing to 2.8% in FY12, as against a high of 8.2% in the previous year. On the other hand, fundamentals of the economy remain strong, backed by promising growth in external trade. Exports registered a growth of 21% in FY12 to USD 303.7 billion while imports registered a growth of 32.2% to USD 488.6 billion. India had the fastest growth in exports among major economies in 2011, with shipments rising 16.1% compared to global average growth of 5% and a 9.3% growth in China.

Indian Economy witnessed high inflation during the year and to control that Reserve Bank of India (RBI) introduced monetary controls. Recently, RBI relaxed its monetary control as is evident from the 50 basis point reduction in Repo rate in April 2012. Several banks have reduced their lending and deposit rates following the monetary policy announcement, this will fuel the investment in and growth of the economy.

The focus of the Government is on growth of the infrastructure sector to ensure that earlier growth targets set in the ports, roads, steel and power sectors are achieved and the economy gets back to 8% plus growth rate trajectory.

Ports Sector Indian ports have handled a total of 929 million metric

tonnes (MMT) of cargo during FY12 registering a moderate growth of 5% compared to 884 MMT of cargo handled during FY11. The ports sector in India has grown at a CAGR of 10% in the last 10 years.

However, in the last 2 years, growth in the ports sector has been below its potential due to imposition of higher export duty on iron ore and higher railway charges for transportation of iron ore. Growth of the port sector has also been affected by rise in prices of imported coal. However, these issues are expected to be temporary in nature and the port sector growth story is expected to remain intact in the long run.

Growth of the port sector is linked to the growth of Indian economy and external trade. The Indian economy is expected to achieve growth rates of 8-9% in the next few years. Similarly, the growth in trade is expected to be robust resulting in growth of traffic. As per Maritime Agenda 2010-20 published by the Ministry of Shipping, port traffic is expected to reach to 2,495 MMT by 2020 from 850 MMT in 2010. As the economy grows, port traffic will increase and more investment opportunities will be created in this sector. Considering high capacity utilisation of existing port assets and expected higher traffic growth in future, new capacity addition in ports will have good utilisation and the port sector will remain an attractive investment destination.

Challenges faced by the port sectorSeveral port projects have been affected due to procedural delays linked to approvals and clearances required for the

projects. Connectivity of ports is another major challenge as it is critical for the ports to operate at their optimum capacity. Government initiatives for development of port connectivity as linkages to the hinterland would provide necessary boost to the sector.

Essar Ports – performanceYour Company is one of the largest private sector port and terminal companies in India and the year under review has been a good year for the Company.

Strategic partnership with Port of AntwerpYour Company has entered into a Strategic partnership with the Port of Antwerp International which is an investment arm of the Port of Antwerp (POA). POA is the second largest port in Europe.

The partnership envisages collaboration in the areas of training and consultancy services, port planning, traffic flow, quality and productivity improvement and will further build a mutually beneficial commercial relationship based on mutual business and investment preferences.

Port of Antwerp International UK Limited has also invested approximately Rs. 175 crore in the Global Depository Securities of your Company.

MM

TP

A

2005-06

Traffic Capacity570

660

2010-11 2016-17 2019-20

Source: Maritime Agenda 2010-2020, Ministry of Shipping

3000

2500

2000

1500

1000

500

0

884

1088

2019

2591

3126

2495


Your Company has issued 52,666 Global Depository Securities representing 1,74,32,446 underlying equity shares of Rs. 10/- each at a premium of Rs. 90/- per share.

Highlights:

capacity terminal has been commissioned on April 1, 2011 by Vadinar Ports & Terminals Limited.

from 39.55 MMT in FY11 to 43.23 MMT in FY12.

(for the port segment prior to demerger) to Rs. 1,131 crore in FY12.

(for the port segment prior to demerger) to Rs. 913 crore in FY12.

segment prior to demerger) to Rs. 63.9 crore in FY12.

Essar Bulk Terminal Limited.

Environment resulted in ISO 9001 certification for quality; ISO 14001certification for Environment and OHSAS 18001 certificates for occupational health and safety for the Company’s Vadinar and Hazira facilities.

Performance UpdateThis was the first full year of operations for your Company post the demerger of shipping & logistics and oilfields services businesses. Despite global slowdown and several other challenges being faced by the Indian economy, your Company has performed exceptionally well in all areas of operations inter alia:

at Hazira and expansion of the port facilities at Vadinar for handling increased cargo.

billed volume but also substantial increase in realisation per tonne. The realisation on billed volume increased by 26% during the year from Rs. 185/MMT in FY11 to Rs. 233/MMT in FY12. The increase in billed volume and realisation has led to 51% growth in revenue from Rs. 746 crore in FY11 (for the port segment prior to demerger) to Rs. 1,131 crore in FY12.

facilities on April 1, 2011, which has increased revenues substantially due to higher facility usage charges and higher throughput. At Hazira, billed volume increased substantially as per the cargo handling contract with customers. 3rd party cargo handling at Hazira contributed 4% to the total revenue at Hazira.

one of the highest in the industry, an increase from 73% in FY11. The EBITDA of your Company increased by 65% from Rs. 550 crore in FY11 (for the port segment prior to demerger) to Rs. 913 crore in FY12.

liability of Rs. 235.5 crore as long term debt as per the agreement with the lenders of Vadinar Oil Terminal Limited, which will be paid between 2019 and 2023 and carries an interest of 5% p.a.

Progress of the project under implementation

iron ore is close to commissioning and is expected to be completed during second quarter of FY13.

coal berth at Salaya is as per plan. All important equipment like ship unloader, ship loader and stacker cum reclaimer have been delivered at the site.

is expected to commence during second half of FY13. Environment clearance and stage I forest clearance have been received and final forest clearance is expected shortly.

Risk and Concerns Implementation and operation of port and terminal

facilities are dependent on various regulatory approvals and government policies. Changes in macro economic factors like inflation, interest rate, world trade and natural catastrophes also play an important role in the trade of goods and cargo.

Any adverse change in the above may affect the performance of your Company. Your Company

1200.0

900.0

800.0

700.0

600.0

500.0

400.0

300.0

200.0

100.0

0.0

CAGR 67%

CAGR 63%

Revenue (Rs. Crore)

EBITDA (Rs. Crore)

1131.0

746.5

427.4

326.5

550.9

913.2

1000.0

800.0

600.0

400.0

200.0

0.0FY10

FY10

FY11 EBITDA

Margin 74%

FY12 EBITDA

Margin 81%

FY11 FY12

FY11 FY12

427.4 502.9

244.9

698.9

432.9

Vadinar

Vadinar

Hazira

Hazira

427.4

368.3

147.1

596.2

300.5

31


periodically reviews the risks associated with the business and takes steps to mitigate and minimise the impact of risks.

4. QUALITY, SAFETY AND ENVIRONMENT Your Company, in order to ensure highest standard of

safety, has implemented and initiated various measures

Management Systems. The initiatives by your Company have been rewarded with several recognitions. Some of the key recognitions are as follows:

certified by British Standard for Occupational Health & Safety Advisory Services (OHSAS) for, ‘Zero Gas Release’, ‘Zero Fire Incident’ and ‘Zero Loss Time Accident or No Loss Time Accident’.

during the year under review.

VOTL successfully achieved the ‘Zero Spill / No Spill’, target and ‘Reduction of Emission’.

for the following ISO certifications:

System by ABS

- ISO 14001:2004 Environment Management System by Det Norske Veritas (DNV)

- ISO 18001:2007 OHSAS by DNV

- ISO 28000:2007 Security Management System by ABS

- OCIMF Terminal Baseline Criteria Certification by ABS

Zero Loss Time Injury during the year.

Health & Safety

- ISO 14001:2004 Environment Management

The terminal of EBTL also has the Navigation Safety at Ports Committee (NSPC) approval from the Director General of Shipping, Mumbai.

5. INTERNAL CONTROL FRAMEWORK Your Company conducts its business with integrity and

high standards of ethical behaviour and in compliance with the laws and regulations that govern its business. Your Company has a well-established framework of internal controls in its operations, including suitable monitoring procedures. In addition to an external audit, the financial and operating controls of your Company at various locations are reviewed by Internal Auditors, who report their observations to the Audit Committee of the Board.

6. HUMAN RESOURCE Human resources have always been the key to

success of your Company’s business. New teams were constituted to steer projects at Salaya Port near Jamnagar and Paradip Port in Odisha. A balance of internal and external talent was maintained to ensure right skills are available to initiate project activities. A large number of fresh talent comprising engineers and management graduates were deployed to nurture future Essar Ports facilities.

At the existing ports of Hazira and Vadinar, special emphasis was laid on the training of employees with a combination of “On the job and Off the job” training. Your Company has introduced technology-enabled HR practices in Performance Management and Training to streamline and strengthen these practices.

7. INFORMATION TECHNOLOGY Your Company successfully implemented SAP in its

financial and related systems. For dry bulk as well as oil terminals, systems have been implemented to capture end-to-end workflow covering all activities from pre-arrival intimations to actual departure of vessels. Expected berth occupancy is being plotted thereby optimising the berth utilisation and increasing berth efficiency. Various dashboard reports have been implemented in the system for berth performance and resource monitoring.

8. SUBSIDIARIES As on March 31, 2012, the following were the subsidiaries

of your Company:

1. Vadinar Oil Terminal Limited (VOTL)

2. Vadinar Ports & Terminals Limited (a subsidiary of VOTL)

3. Essar Bulk Terminal Limited

4. Essar Bulk Terminal (Salaya) Limited

5. Essar Paradip Terminals Limited

6. Essar Bulk Terminal Paradip Limited

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

9. DIRECTORS In accordance with the provisions of the Companies Act,

1956 and the Articles of Association of the Company, Mr. Deepak Kumar Varma, Mr. K. V. Krishnamurthy and Mr. Rajiv Agarwal retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.


Mr. Shashi Ruia resigned from the directorship of your Company on May 25, 2012. Your Board places on record their appreciation for the invaluable contribution made by Mr. Ruia in the growth and progress of the Company during his tenure as Director.

Mr. Jan Adam has been appointed as an Additional Director on May 30, 2012. The Company has received a notice from a member proposing the appointment of Mr. Adam as a Director of your Company.

10. AUDITORS Your Company’s Auditors, Messrs. Deloitte Haskins

& Sells, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 (the Act) and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

11. CORPORATE GOVERNANCE The Company has complied with the requirements

under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors’ Report under the head “Corporate Governance”.

12. PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988

This does not apply to your Company as the Ports & Terminals industry is not included in the Schedule to the relevant rules.

Foreign exchange earnings and outgo are summarised below:

Total Foreign Exchange:(1) Earned (including freight, charter, : Rs. 7.98 crore

hire earnings, interest income, etc.)

(2) Used (including loan repayments, : Rs. 11.67 crore interest,operating expenses, etc.)

13. PARTICULARS OF EMPLOYEES Information as per Section 217(2A) of the Companies

Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the Annexure forming part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees under u/s 217(2A) of the said Act. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary for the same at the Registered Office of the Company.

14. STATEMENT OF DIRECTORS RESPONSIBILITIES Pursuant to the requirement of Section 217(2AA) of the

Companies Act, 1956, the Board of Directors hereby state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there have been no material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts on a going concern basis.

15. APPRECIATION AND ACKNOWLEDGEMENTS Your Directors express their sincere thanks and

appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company.

Your Directors also thank its bankers and other business associates for their continued support and co-operation during the year.

For and on behalf of the Board

Rajiv Agarwal Shailesh Sawa

Managing Director Director Finance

Mumbai

May 30, 2012

33


Annexure to the Director’s ReportInformation required to be disclosed as per Securities and Exchange Board of India (Employees Stock Option Scheme

and Employee Stock Purchase Scheme) Guidelines, 1999

Sr.

No.

Particulars Details

(a) Options granted 7,40,334

(b) The pricing formula The Options have been granted at a price which is equal to the closing

price of the equity shares on the stock exchange having the highest trading

volume a day prior to the meeting of the Compensation Committee.

(c) Options Vested Nil

(d) Options Exercised Nil

(e) Total number of shares arising as a result of exercise of

Options (Equity shares of Rs. 10/- each)

Not Applicable

(f) Options lapsed Nil

(g) Variation of terms of Options None

(h) Money realised by exercise of Options Nil

(i) Total Number of Options in force 7,40,334

(j) Employee-wise details of options granted to

i) Senior Managerial Personnel: Mr. Rajiv Agarwal - 2,31,954

Mr. Shailesh Sawa - 1,23,285

ii) Any other employee who receives a grant,

in any one year, of Options amounting to

5% or more of Options granted during

that year

Mr. Tej Nargundkar - 1,47,595

Capt. Rajen Sachar - 43,408

Capt. Rajesh Beri - 67,797

Mr. P. K. Srivastava - 49,568

Mr. S. Shanmugam - 45,952

iii) Identified employees who were granted Options,

during any one year, equal to or exceeding 1%

of the issued capital (excluding outstanding

warrants and conversions) of the Company at

the time of grant

Nil

(k) Diluted Earnings Per Share (EPS) pursuant to issue of

shares on exercise of option calculated in accordance

with [Accounting Standard (AS) 20 ‘Earnings per

Share’].

Not applicable as the Options are anti-dilutive.

(l) Where the Company has calculated the employee

compensation cost using the intrinsic value of the

stock Options, the difference between the employee

compensation cost so computed and the employee

conpensation cost that shall have been recognised if it

had used the fair value of the difference on profits and

on EPS of the Company shall also be disclosed

If the compensation cost on account of stock Options was computed

using the fair value method, the compensation cost and loss for the year

would have been higher by Rs. 26.78 lakhs. The impact on EPS for the

year would be Rs. 0.01.

(m) Weighted-average exercise prices and weighted-

average fair values of Options shall be disclosed

separately for Options whose exercise price either

equals or exceeds or is less than the market price of

the stock.

Rs. 71.10 per Option

(n) A description of the method and significant

assumptions used during the year to estimate the fair

values of Options, including the following weighted-

average information:

(i) Risk-free interest rate 8.36%

(ii) expected life 5 - 7 years

(iii) expected volatility 64.81%

(iv) expected dividends Nil

(v) the price of the underlying share in market at

the time of Option grant

Rs. 71.10


1. STATEMENT ON COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:

Your Company believes that adhering to global standards of Corporate Governance is essential to enhance shareholder

value and achieve long term corporate goals. The Company’s philosophy on Corporate Governance stresses the

importance of transparency, accountability and protection of shareholder interests. The Board oversees periodic review

of business plans, monitors performance and ensures compliance of regulatory requirements including SEBI Regulations

and Listing requirements.

2. BOARD OF DIRECTORS:

The Independent Directors constitute half the total number of Directors.

A. Composition, Category, Attendance and Number of other Directorships of the Directors are furnished below:

As at March 31, 2012, the Board consisted of ten members. The composition, category of directors and directorships

held in other companies was as under:

Name of Director Category of Director * No. of outside

Directorships in other

Indian public companies

**No. of Committee

positions held in other public

companies

Chairman Member

Mr. Shashi Ruia (Chairman) Promoter Non-Executive 2 – –

Mr. Anshuman Ruia Promoter Non-Executive 2 – 1

Mr. R. N. Bansal Independent Non-Executive 8 4 3

Mr. K. V. Krishnamurthy Independent Non-Executive 8 4 4

Mr. Dilip J. Thakkar Independent Non-Executive 13 5 4

Mr. Deepak Kumar Varma Independent Non-Executive 3 – 2@ Mr. T. S. Narayanasami Independent Non-Executive 8 – 4

Mr. Rajiv Agarwal (CEO & Managing Director)

Non-Promoter Executive 8 – 5

@ Mr. K. K. Sinha (Chief Executive Officer) Non-Promoter Executive 8 – 6

Mr. Shailesh Sawa (Director Finance) Non-Promoter Executive 7 – 5

* excludes foreign companies, private limited companies, Section 25 companies and Alternate Directorships. ** includes

membership of Audit and Shareholders’ Grievance Committee only. @ Mr. T. S. Narayanasami has been appointed as an

Independent Director and Mr. K. K. Sinha has been appointed as a Director in wholetime employment w.e.f. July 4, 2011.

Mr. N. Srinivasan, Independent Director and Mr. A. R. Ramakrishnan, Wholetime Director resigned from the Board of the Company

w.e.f. May 22, 2011, Mr. V. Ashok, Director resigned from the Board of the Company w.e.f. June 14, 2011 and Mr. S. V. Venkatesan,

Independent Director resigned from the Board of the Company w.e.f. July 5, 2011.

CORPORATE GOVERNANCE REPORT

35


B. Details of Board Meetings held during the year:

Sr.

No.

Date Board Strength No. of Directors present

1 May 3, 2011 12 11

2 July 4, 2011 9 8

3 August 9, 2011 10 8

4 October 19, 2011 10 8

5 February 2, 2012 10 7

C. Attendance of Directors at Board Meetings and at the last Annual General Meeting:

Director No. of Board Meetings attended Attendance at last AGM

Mr. Shashi Ruia 3 N

Mr. Anshuman Ruia 4 N

Mr. R. N. Bansal 4 Y

Mr. K. V. Krishnamurthy 5 N

Mr. Dilip J. Thakkar 2 N

Mr. Deepak Kumar Varma 5 N

Mr. T. S. Narayanasami* 2 N

Mr. Rajiv Agarwal 5 Y

Mr. K. K. Sinha* 3 Y

Mr. Shailesh Sawa 5 Y

Mr. N. Srinivasan** 1 NA

Mr. S. V. Venkatesan# 2 NA

Mr. A. R. Ramakrishnan** 1 NA

Mr. V. Ashok+ Nil NA

* were appointed as a Directors on July 4, 2011

**ceased to be Directors on May 22, 2011

#ceased to be Director on July 5, 2011

+ceased to be Director on June 14, 2011

3. AUDIT COMMITTEE:

The Audit Committee inter alia performs all the functions

specified under the Companies Act, 1956 and Clause

49 of the Listing Agreement.

Composition:

As on March 31, 2012, the Committee comprised

of four Directors of which three were Independent

Directors.

The Chairman of the Audit Committee is an Independent

Director. All the members of the Committee are financially

literate and have relevant financial management and / or

audit exposure. The Managing Director, Chief Executive

Officer, Director Finance, Head - Accounts, Statutory

Auditors and Internal Auditors attend the meetings. The

Company Secretary is the Secretary to the Committee.

Details of Audit Committee Meetings held during the year:

Sr. No.

Date Committee Strength No. of Members present

1 May 3, 2011 4 4

2 July 4, 2011 4 4

3 August 9, 2011 4 3

4 October 19, 2011 4 3

5 February 2, 2012 4 3


Attendance at Audit Committee Meetings:

Director No. of meetings held No. of meetings attended

Mr. R. N. Bansal, Chairman 5 4

Mr. N. Srinivasan* 5 1

Mr. S. V. Venkatesan** 5 2

Mr. Anshuman Ruia 5 3

Mr. Deepak Kumar Varma# 5 4

Mr. K. V. Krishnamurthy+ 5 3

* resigned from the Audit Committee w.e.f. May 22, 2011

**resigned from the Audit Committee w.e.f. July 5, 2011

#appointed on the Audit Committee on May 3, 2011

+appointed on the Audit Committee on July 4, 2011

4. REMUNERATION TO DIRECTORS:

Details of Remuneration paid to the Managing Director and Wholetime Directors during the year ended March 31,

2012 is as under:

(Rs.)

Name of Director Basic Salary Allowances,

Perquisites and

other benefits

Contribution

to Provident &

Superannuation Fund

Total

Mr. Rajiv Agarwal, CEO &

Managing Director

44,37,228 1,66,17,770 5,32,464 2,15,87,462

Mr. A. R. Ramakrishnan*

Wholetime Director

6,83,871 8,19,763 82,065 15,85,699

Mr. K. K. Sinha*

Chief Executive Officer

39,35,011 28,17,133 4,72,201 72,24,345

Mr. Shailesh Sawa

Director Finance

46,64,043 61,37,336 5,59,680 1,13,61,059

* was in the employment of the Company for part of the year.

The services of the aforesaid Executive Directors can be mutually terminated by giving three months notice or three

months salary in lieu thereof.

Stock Options

The following Stock Options have been granted to the Executive Directors:

Name of Director No. of Stock Options Granted

Mr. Rajiv Agarwal 2,31,954

Mr. Shailesh Sawa 1,23,285

These Stock Options have been granted on November 28, 2011. One third of the Options granted shall be vested at the

end of the third, fourth and fifth years respectively from the date of grant. The vested Options can be exercised over a

period of seven years from the date of vesting of the Options. One Option is equal to one Equity Share of Rs. 10/- each

of the Company. The Options have been granted at a price of Rs. 70.10 per Option.

37


Details of sitting fees paid to Non-Executive Directors for the meetings held during the year ended March 31, 2012:

Non-Executive Directors Sitting Fees paid for Board /

Committee meetings (Rs.)

Mr. Shashi Ruia 40,000.00

Mr. Anshuman Ruia 90,000.00

Mr. R. N. Bansal 120,000.00

Mr. K. V. Krishnamurthy 110,000.00

Mr. Dilip J. Thakkar 30,000.00

Mr. Deepak Kumar Varma 140,000.00

Mr. S. V. Venkatesan* 30,000.00

Mr. T. S. Narayanasami* 40,000.00

* were directors for part of the year

Except for the Stock Options mentioned above, no shares or convertible instruments are held by any members of the Board.

5. SHAREHOLDERS’ GRIEVANCE COMMITTEE AND SHARE TRANSFER COMMITTEE:

A. Shareholders Grievance Committee:

Terms of Reference:

To redress grievances and complaints of members on all matters pertaining to their shareholding in the Company.

Composition:

The Committee comprised of Mr. R. N. Bansal,

Mr. Deepak Kumar Varma, Mr. Rajiv Agarwal and

Mr. Shailesh Sawa.

The committee met 2 times during the year ended

March 31, 2012.

B. Share Transfer Committee:

Terms of Reference:

To oversee the functioning of the Registrar &

Share Transfer Agent and ensure that the process

of share transfers, transmission and issue of

duplicate shares is effective and efficient.

Composition:

The Committee comprised of Mr. Rajiv Agarwal,

Mr. K. K. Sinha and Mr. Shailesh Sawa.

The Board has further authorised the Executive

Directors and Company Secretary to approve the

Share Transfers and other related transactions

on a regular basis under the supervision of the

Committee.

The committee met 4 times during the year ended

March 31, 2012.

Details of shareholders complaints received,

solved and pending share transfers:

There were no complaints pending at the beginning

of the year. A total of 141 complaints were

received during the year ended March 31, 2012,

most of which being non-receipt of dividend and

non-receipt of share certificates. All the complaints

were redressed under the supervision of the

Committee and no complaints were outstanding

as on March 31, 2012.

All the valid share transfer requests received during

the year were duly attended to and processed in

time. There were no valid requests pending for

share transfers as on March 31, 2012.

6. GENERAL BODY MEETING:

(a) Details of General Meetings held in last three years:

Financial year Meeting Date Time Location

2008 - 09 AGM 31-07-09 3.30 PM Administrative Building, Essar

Refinery Complex, Okha Highway

(SH-25), Taluka Khambhalia,

District - Jamnagar, Gujarat 361 305

2009 - 10 AGM 24-07-10 3.00 PM

EGM 30-11-10 10.00 AM

2010 - 11 AGM 09-09-11 12.00 noon


8. MEANS OF COMMUNICATION:

Financial results and other information about the Company The quarterly and annual financial results are submitted

to the BSE Limited and National Stock Exchange of

India Limited which is uploaded on their websites.

These results are also displayed on the Company’s

website: www.essar.com

Publication of financial results Published in major newspapers such as Business

Standard and Jai Hind

Presentation to Institutional Investors and to the Analyst Press releases and presentations made to Institutional

Investors and Analysts are displayed on the Company’s

website: www.essar.com

Management Discussion & Analysis Forms part of the Annual Report, which is mailed to the

shareholders of the Company

9. GENERAL SHAREHOLDERS INFORMATION:

A. Annual General Meeting details:

Date September 27, 2012

Venue Administrative Building, Essar Refinery Complex

Okha Highway (SH-25), Taluka Khambhalia

District Jamnagar, Gujarat 361 305

Time 2.30 p.m.

Book Closure September 22, 2012 to September 27, 2012

(both days inclusive)

(b) Special Resolutions passed in the previous

three Annual General Meetings:

July 24, 2010:

A special resolution enabling the Company

to issue Equity Shares, Foreign Currency

Convertible Bonds, Global Depository Receipts,

etc. was passed:

September 9, 2011:

- Remuneration to be paid to Mr. Rajiv

Agarwal, CEO & Managing Director.

- Remuneration to be paid to Mr. Shailesh

Sawa, Director Finance.

- Remuneration to be paid to Mr. K. K. Sinha,

Chief Executive Officer.

- To issue Equity Shares, Foreign Currency

Convertible Bonds, Global Depository

Receipts, etc.

- Implement the Stock Option Scheme and

grant of Options thereunder.

- Extend the Stock Option Scheme to

employees of holding and subsidiary

companies.

(c) No resolutions are proposed to be passed at

the ensuing Annual General Meeting which

require approval of members through Postal

Ballot.

7. DISCLOSURES:

transactions made by the Company with its

Promoters, Directors or Management, their

relatives, its subsidiaries, etc., that may have

potential conflict with the interest of the Company

at large.

are disclosed in Note No. 32 forming part of the

financial statements in the Annual Report.

has been imposed on the Company by Stock

Exchanges / SEBI /Statutory Authorities on

matters related to Capital Markets.

39


B. Financial Calendar:

Financial year of Company April 1, 2012 to March 31, 2013

First Quarter results On or before August 14, 2012

Second Quarter results On or before November 14, 2012

Third Quarter results On or before February 14, 2013

Annual results for the year On or before May 30, 2013

C. Registrars and Share Transfer Agents:

Data Software Research Company Private Limited

19, Pycrofts Garden Road, Off Haddows Road

Nungambakkam, Chennai- 600 006

Tel:(044) 2821 3738, 2821 4487

Fax: (044) 2821 4636

E-Mail: [email protected]

D. Share Transfer System:

To expedite the process of share transfers,

transmission, etc., the Board of your Company

has delegated these powers to the Executive

Directors and the Company Secretary.

All valid share transfer requests received by the

Company in physical form are registered within

an average period of 15 days. The Company

dematerialises the shares after getting the

dematerialisation requests being generated by the

Depository Participants.

E. Listing on Stock Exchanges:

The Company’s securities are listed on the following Stock Exchanges:

BSE Limited National Stock Exchange of India Limited

Phiroze Jeejeebhoy Towers

Dalal Street, Mumbai 400 023

Exchange Plaza, Bandra Kurla Complex

Bandra East, Mumbai 500 051

Code: 500630 Code : ESSARPORTS

Annual Listing fee for the year 2012-13 has been paid to both the exchanges.

Market price data (High/Low) during each month in the year 2011-2012 on the BSE Limited and National Stock

Exchange of India Limited:

BSE Limited National Stock Exchange of India Limited

Month Highest Lowest Month Highest Lowest

May 31, 2011 125.00 75.00 May 31, 2011 128.20 77.50

June 125.00 88.50 June 125.00 88.75

July 106.45 91.00 July 107.40 85.70

August 93.75 67.25 August 95.90 67.05

September 78.50 58.50 September 78.40 58.00

October 80.30 51.60 October 80.40 51.55

November 96.90 63.15 November 96.90 63.50

December 73.45 46.90 December 73.05 46.65

January 66.75 49.60 January 66.85 49.00

February 73.75 59.40 February 73.70 59.25

March 84.95 63.35 March 85.00 63.10

Scrip Code : 500630 Scrip Code : ESSARPORTS

* The shares of the Company were re-listed subsequent to the demerger of the shipping & logistics and oilfields

services businesses w.e.f. May 31, 2011 and hence the share price data and movement given above is with effect

from May 31, 2011.


Share Price performance in comparison to BSE Sensex

BS

E S

ensex

Share

Price

Months

Share price on BSE BSE Sensex

Share Price Movement versus BSE Sensex

120.00

19000

18500

18000

17500

17000

16500

16000

15500

15000

110.00

100.00

90.00

80.00

70.00

60.00

50.00

40.00

May

- 11

Jun -

11

Jul -

11

Aug -

11

Sep

- 1

1

Oct

- 11

Nov

- 11

Dec -

11

Jan -

12

Feb

- 1

2

Mar

- 12

F. Shareholding Pattern as on March 31, 2012:

Shareholding by No. of Shares %

Promoters 34,35,87,159 83.71

Financial Institutions / Mutual Funds / Banks / Insurance Companies 5,11,928 0.12

Other Corporate Bodies 96,04,924 2.34

Non-Domestic Companies / Foreign Banks 15,115 0.01

Foreign Institutional Investors 3,41,73,275 8.33

Non-Resident Individuals 6,30,617 0.15

Public 2,19,32,534 5.34

Total 41,04,55,552 100.00

G. Distribution of Shareholding as on March 31, 2012:

No. of equity shares held Number of

shareholders

% of

shareholders

Total number

of shares

% of holding

Upto 5000 105,335 99.55 16,266,563 3.96

5001-10000 226 0.21 1,623,526 0.40

10001-20000 96 0.09 1,377,932 0.34

20001-30000 37 0.04 921,497 0.22

30001-40000 23 0.02 780,098 0.19

40001-50000 14 0.01 629,566 0.15

50001-100000 33 0.03 2,484,872 0.61

100001 and above 44 0.05 386,371,498 94.13

Total 105,808 100.00 410,455,552 100.00

41


H. Compliance Officer : Mr. Manoj Contractor

Company Secretary

I. Registered Office : Administrative Building

Essar Refinery Complex


Taluka Khambhalia

District Jamnagar

Gujarat 361 305

J. Corporate Office : Essar House



Tel: (022) 6660 1100

Fax: (022) 2354 4312

E Mail:[email protected]

K. Status of Dematerialisation of shares as on March 31, 2012 (POST DEMERGER):

Mode No. of shares No. of folios %

Physical 56,60,942 54,512 1.38

Demat 40,47,94,610 51,296 98.62

TOTAL 41,04,55,552 1,05,808 100.00

10. NOMINATION FACILITY:

Shareholders holding shares in physical form and

desirous of making a nomination in respect of their

shareholding in the Company, as permitted under

Section 109A of the Companies Act, 1956 are

requested to submit to the R&T Agent of the Company

the prescribed nomination form.

11. OUTSTANDING GDRS / ADRS / WARRANTS OR

ANY CONVERTIBLE INSTRUMENTS, CONVERSION

DATE AND LIKELY IMPACT ON EQUITY:

As on March 31, 2012 there are 2,800 Foreign

Currency Convertible Bonds (FCCB’s) aggregating

USD 40,000,000.00 which can be converted into

equity shares of the Company at a conversion price of

Rs. 91.70 per share. As per the terms of the offering,

the USD - INR conversion rate has been fixed at

1 USD = 46.94 INR. These FCCBs are listed on the

Singapore Exchange Securities Trading Limited.

12. SECRETARIAL AUDIT:

A qualified practicing Company Secretary carries out

secretarial audit to reconcile the total admitted capital

with National Securities Depository Limited (NSDL) and

Central Depository Services (India) Limited (CDSL) and

the total issued and listed capital. The audit confirms

that the total issued / paid up capital is in agreement

with the total number of shares in physical form and the

total number of dematerialised shares held with NSDL

and CDSL.

13. NON-MANDATORY REQUIREMENTS:

1. Remuneration Committee:

The Committee comprises of three Non-Executive

Directors with the Company Secretary as the

Secretary of the Committee. The Committee is

empowered to formulate and recommend to

the Board from time to time, the compensation

structure for Managing / Executive / Wholetime

Directors and to administer and supervise the

Employee Stock Option Schemes, whenever

applicable.

2. Shareholders right:

Quarterly financial results are available on the

website of the Company i.e. www.essar.com. No

separate financials are sent to shareholders of the

Company.

3. Audit qualifications:

There are no audit qualifications in the Auditor’s

report on the financial statements to the

Shareholders of the Company.


Auditor’s Certificate on Corporate Governance

To the Members of Essar Ports Limited

We have examined the compliance of conditions of corporate

governance by Essar Ports Limited (formerly known as Essar

Shipping Ports & Logistics Limited) (“The Company”) for the

year ended March 31, 2012, as stipulated in Clause 49 of the

Listing Agreement entered into by the said Company with

Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the

responsibility of the management. Our examination has been

limited to review of procedures and implementation thereof,

adopted by the Company for ensuring the compliance of

conditions of the Corporate Governance. It is neither an audit

nor an expression of opinion on the financial statements of

the Company.

In our opinion and to the best of our information and according

to the explanations given to us, we certify that the Company

For Deloitte Haskins & Sells

Chartered Accountants

(Firm Regn. No. 117365W)

Khurshed Pastakia

Partner

Mumbai (Membership No. 31544)

May 30, 2012

Rajiv Agarwal

CEO & Managing Director

Mumbai

May 30, 2012

Declaration on Compliance of the Company’s Code of

Conduct to the Members of Essar Ports Limited

has complied with the conditions of Corporate Governance

as stipulated in the above-mentioned Listing Agreement.

We further state that such compliance is neither an assurance

as to the future viability of the Company nor the efficiency or

effectiveness with which the management has conducted

the affairs of the Company.

The Company has framed a specific Code of Conduct for

the members of the Board and the Senior Management

Personnel of the Company pursuant to Clause 49 of the

Listing Agreement with the Stock Exchanges to further

strengthen Corporate Governance practices in the

Company.

All the members of the Board and Senior Management

Personnel of the Company have affirmed due observance

of the said Code of Conduct in so far as it is applicable to

them and there is no non-compliance thereof during the

year ended March 31, 2012.

43


TO THE MEMBERS OF

ESSAR PORTS LIMITED

(Formerly known as Essar Shipping Ports & Logistics

Limited)

1. We have audited the attached Balance Sheet of ESSAR

PORTS LIMITED (formerly known as Essar Shipping

Ports & Logistics Limited) (“the Company”) as at March

31, 2012, the Statement of Profit and Loss and the Cash

Flow Statement of the Company for the 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 the 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 misstatements. An audit

includes examining, on a test basis, evidence supporting

the amounts and the disclosures in the financial

statements. An audit also includes assessing the

accounting principles used and the 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 (Auditor’s Report) Order,

2003 (CARO) issued by the Central Government in

terms of Section 227(4A) of the Companies Act, 1956,

we enclose in the Annexure a statement on the matters

specified in paragraphs 5 of the said Order.

4. Further to our comments in the Annexure referred to in

paragraph 3 above, we report as follows:

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 Statement of Profit and Loss

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 Statement

of Profit and Loss and the Cash Flow Statement

dealt with by this report are in compliance with

the Accounting Standards referred to in Section

211(3C) of the Companies Act, 1956;

e. in our opinion and to the best of our information

and according to the explanations given to us, the

said accounts give the information required by the

Companies Act, 1956 in the manner so required

and give a true and fair view in conformity with the

accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of

affairs of the Company as at March 31, 2012;

ii. in the case of the Statement of Profit and Loss,

of the loss of the Company for the year ended

on that date; and

iii. in the case of the Cash Flow Statement, of the

cash flows of the Company for the year ended

on that date.

5. On the basis of the written representations received

from the Directors as on March 31, 2012 taken on

record by the Board of Directors, none of the Directors

is disqualified as on March 31, 2012 from being

appointed as a director in terms of Section 274(1)(g) of

the Companies Act, 1956.

For DELOITTE HASKINS & SELLS


(Firm Registration No. 117365W)

Khurshed Pastakia

Partner

(Membership No. 31544)

Mumbai

May 30, 2012

Standalone Auditors’ Report


(Referred to in paragraph 4 of our report of even date)

(i) Having regard to the nature of the Company’s business /

activities / result, clauses (vi), (viii), (xii), (xiii), (xiv), (xviii), (xix)

and (xx) of CARO are not applicable.

(ii) In respect of its 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 explanation given to us,

no material discrepancies were noticed on such

verification.

(c) In our opinion and according to the information

and explanations given to us, the Company has

not made substantial disposals of fixed assets

during the year and the going concern status of the

Company is not affected.

(iii) In respect of its inventory, as explained to us, the

Company is not required to maintain any inventories for

its operation. Hence the provisions of clause (ii) (a) to (ii)

(c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and

explanations given to us, 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. Hence, the provisions of clause

(iii) (b) to (iii) (g) of the Order are not applicable to the

Company.

(v) 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 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.

(vi) In our opinion and according to information and

explanation given to us, there are no contracts

or arrangements that need to be entered into the

register maintained in pursuance of Section 301 of the

Companies Act, 1956.

(vii) In our opinion, the Company has an adequate internal

audit system commensurate with the size and the nature

of its business.

(viii) 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, Income-tax, Tax Deducted at source, Sales

Tax, Service Tax, Custom Duty, Cess and other

material statutory dues applicable to it with the

appropriate authorities. As informed to us, the

provisions for Investors Education and Protection

Fund, Employee’s State Insurance, Sales Tax,

Wealth Tax and Excise duty were not applicable to

the Company during the year.

(b) There were no undisputed amounts payable in

respect of above statutory dues in arrears as

at March 31, 2012 for a period of more than six

months from the date they became payable.

(c) There were no due pending to be deposited on

account of any dispute in respect of Income-tax,

Service Tax, Custom Duty and Cess as on March

31, 2012.

(ix) The Company does not have accumulated losses as at

the end of the financial year. The Company has incurred

cash losses in the financial year covered by the audit;

however no cash loss were incurred in the immediately

preceding financial year.

(x) In our opinion and according to the information and

explanations given to us, the Company has not defaulted

in the repayment of dues to banks, financial institutions

and debenture holders.

(xi) In our opinion and according to the information and

explanations given to us, the terms and conditions of

the guarantees given by the Company for loans taken by

others from banks and financial institutions are not prima

facie prejudicial to the interests of the Company.

Annexure to the Auditors’ Report

45


(xii) In our opinion and according to the information and

explanations given to us, working capital loans of

Rs. 30,000 lakhs have been applied by the Company

for purchase of investment in the equity of subsidiary

companies.

(xiii) On the basis of an overall examination of the balance

sheet as at March 31, 2012 and the cash flow statement

of the Company for the year then ended and according

to the information and explanation given to us, we report

that funds raised on short-term basis amounting to

Rs. 29,744.01 lakhs have, prima facie, been used for

long term purpose.

(xiv) 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.




Khurshed Pastakia

Partner


Mumbai

May 30, 2012



(Rs. in lakhs)

Particulars Note No.As at

March 31, 2012

As at

March 31, 2011

I. EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 3 41,058.61 41,058.61

(b) Reserves and surplus 4 223,352.61 232,515.73

264,411.22 273,574.34

2 Non-current liabilities

(a) Long-term borrowings 5 40,462.60 66,618.00

(b) Deferred tax liabilities (Net) 29 – –

(c) Other long term liabilities 6 12,955.94 2,119.88

(d) Long-term provisions 7 139.57 107.06

53,558.11 68,844.94

3 Current liabilities

(a) Short-term borrowings 8 3,500.00 3,500.00

(b) Trade payables 9 1,556.58 –

(c) Other current liabilities 10 57,129.70 6,853.27

(d) Short-term provisions 7 2,172.03 169.69

64,358.31 10,522.96

Total 382,327.64 352,942.24

II. ASSETS

1 Non-current assets

(a) Fixed assets

i) Tangible assets 11 8,890.70 4,639.70

(b) Non-current investments 12 365,942.00 331,296.60

(c) Loans and advances 13 1,217.92 585.67

(d) Other non - current assets 14b 1,662.72 –

377,713.34 336,521.97

2 Current assets

(a) Trade receivables 14a 730.97 –

(b) Cash and bank balances 15 212.86 3,867.08

(c) Loans and advances 13 2,143.07 12,454.19

(d) Other current assets 14b 1,527.40 99.00

4,614.30 16,420.27

Total 382,327.64 352,942.24

See accompanying notes forming part of the financial statements

In terms of our report attached For and on behalf of the Board of Directors



Khurshed Pastakia Rajiv Agarwal Shailesh Sawa

Partner Managing Director Director Finance

R. N. Bansal Manoj Contractor

Director Company Secretary

Mumbai Mumbai

May 30, 2012 May 30, 2012

Standalone Balance Sheet as at March 31, 2012

47









Mumbai Mumbai

May 30, 2012 May 30, 2012

(Rs. in lakhs)

Particulars Note No.For the year ended

March 31, 2012

For the year ended

March 31, 2011

REVENUE FROM OPERATIONS 16 3,622.00 48,686.69

Other income 17 1,634.36 17,249.35

Total Revenue 5,256.36 65,936.04

EXPENSES

Employee benefits expense 18 927.46 4,780.35

Operating expenses 19 726.48 31,275.89

Establishment and other expenses 20 698.39 1,797.39

Total Expenses 2,352.33 37,853.63

Earning before finance cost, depreciation and

amortisation and tax 2,904.03 28,082.41

Finance costs 21 9,239.93 18,407.52

Profit before depreciation and amortisation and tax (6,335.90) 9,674.89

Depreciation and amortisation expense 11 740.33 5,987.41

Profit before tax (7,076.23) 3,687.48

Tax expense

Current tax (0.20) (1,600.00)

Deferred tax – –

Tax adjustment for earlier years (23.25) –

Profit / (Loss) for the year after tax (7,099.68) 2,087.48

Earnings per share: 26

Basic and diluted (face value Rs. 10/- per share) (1.73) 0.51


Standalone Statement of Profit and Loss for the year ended March 31, 2012


(Rs. in lakhs)

Particulars Year ended

March 31, 2012

Year ended

March 31, 2011

A CASH FLOW FROM OPERATING ACTIVITIES

Profit / (Loss) before tax (7,076.23) 3,687.48

Adjustments for :

Depreciation / impairment 740.33 5,987.41

Interest and finance expenses 9,239.93 18,407.52

Interest income from long term investment – (1,740.06)

Interest income (39.98) (5,576.36)

Interest on income tax refund (1.48) –

Loss / (Profit) on sale of assets – (3,011.46)

Profit on sale of long term investment (2.44) (5,259.71)

Profit on sale of investments – (84.96)

Dividend on investments – (108.84)

Foreign exchange difference loss / (gain) 402.74 (1,467.46)

Operating profit before working capital changes 3,262.87 10,833.56

Adjustments for:

Trade and other receivables (2,674.33) (5,700.01)

Inventories – (431.19)

Trade and other payables 12,613.38 9,310.72

Cash generated from operations 13,201.92 14,013.08

Income taxes refund / (paid) net (267.02) (1,595.00)

Net cash flow from operating activities 12,934.90 12,418.08

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets including capital work-in-progress / advance (433.97) (11,709.47)

Proceeds from sale of fixed assets – 3,178.36

Purchase of current investments – (105,881.25)

Proceeds from sale of current investments – 111,564.52

Proceeds from sale of non - current investments – 37,040.75

Proceeds from sale of investments in subsidiaries 4.88 –

Proceeds from maturity of fixed deposit 1,500.00 –

Investment in shares of subsidiaries (5,677.00) (29,228.88)

Advance towards share application money (100.00) (132,040.39)

Fixed deposits placed for a period of more than three months, net (160.00) (1,460.75)

Loans and advances given to subsidiaries and other body corporates – (14,253.51)

Loans and advances repaid by subsidiaries and other body corporates – 37,339.25

Dividend on investments – 108.84

Interest income from long term investment – 1,740.06

Interest received 138.25 5,799.28

Net cash used for investing activities (4,727.84) (97,803.23)

Standalone Cash Flow Statement for the year ended March 31, 2012

49


(Rs. in lakhs)


March 31, 2012

Year ended

March 31, 2011

C CASH FLOW FROM FINANCING ACTIVITIES

Interest and finance expenses paid (8,021.28) (16,995.59)

Proceeds from FCCB – 130,964.40

Proceeds from secured loan 20,000.00 124,226.83

Proceeds from commercial papers – 16,000.00

Repayment of secured loan – (59,339.41)

Repayment of finance lease obligations – (4,219.48)

Repayment of commercial papers – (16,000.00)

Repayment of unsecured loan (22,500.00) (86,250.00)

Net cash flow from financing activities (10,521.28) 88,386.75

INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (2,314.22) 3,001.60

Cash and cash equivalents given on demerger – (3,832.00)

Cash and cash equivalents acquired on merger – 9.99

Cash and cash equivalents at the beginning of the year 2,367.08 3,187.47

Cash and cash equivalents at end of the year 52.86 2,367.08

NOTES :

Cash and cash equivalents include :

Cash and bank balances 52.86 2,367.08

Total cash and cash equivalents 52.86 2,367.08

Balances in fixed deposits (maturity period of more than 3 months) 160.00 1,500.00

CASH AND BANK BALANCES AS PER NOTE 15 212.86 3,867.08

Note:

1. The above cash flow statement excludes assets / liabilities (other than cash balance) on merger from EIL and EPTL and

transfer to ESL on demerger, as it is non cash transaction (refer note no. 22).

2. Cash flow statement has been prepared under the indirect method as set out in Accounting Standards 3 - “Cash Flow

Statement” referred to in Section 211(3C) of the Companies Act, 1956.

3. During the year share application money of Rs.10,382.86 lakhs placed with subsidiaries has been converted into share

capital of subsidiaries.


Standalone Cash Flow Statement for the year ended March 31, 2012








Mumbai Mumbai

May 30, 2012 May 30, 2012


Notes forming part of financial statements

1. COMPANY PROFILE

Essar Ports Limited (EPL / Company) develops and operates

ports and terminals and is one of the largest private sector

port company in India. EPL is India’s second-largest,

private-sector port and terminal company by capacity and

throughput.

EPL is part of the multinational Essar Group, and holds the

Group’s entire ports business. It is listed on the BSE Limited

and the National Stock Exchange of India Limited (NSE).

The Company, which was previously named Essar Shipping

Ports & Logistics Limited (ESPLL), recently went through a

demerger process, following which the shipping, logistics

and oilfield drilling businesses were demerged from ESPLL

and transferred to another company, Essar Shipping Limited,

which is also listed on Indian stock exchanges.

EPL through its subsidiaries develops and operates ports

and terminals for handling liquid, dry bulk, break bulk and

general cargo, with an existing aggregate capacity of 88

MTPA across two facilities located at Vadinar and Hazira in

the State of Gujarat on the west coast of India.

The facilities at Vadinar and Hazira are used primarily by

affiliated customers for the receipt of raw materials such as

crude oil, iron ore / pellets, limestone, dolomite and coal,

and for the dispatch of finished goods such as petroleum

products and steel products.

EPL is in the process of increasing its aggregate ports

capacity to 158 MTPA with expansion projects at Vadinar and

Hazira, a new port at Salaya in Gujarat, and two terminals at

Paradip in the State of Odisha on the east coast of India.

The ports expansion projects have been undertaken, in

part, to accommodate the increase in traffic expected to

arise from plant expansions planned to be carried out by

the Company’s affiliated customers, and in part to support

the increase in business from non-affiliated customers being

targeted by the Company.

2. SIGNIFICANT ACCOUNTING POLICIES:

2.1 Basis of Accounting

These financial statements are prepared under the historical

cost convention, except for the revaluation of fleet, on accrual

basis of accounting, and are in accordance with generally

accepted accounting principles and in compliance with the

applicable Accounting Standards (AS) referred to in sub-

section (3C) of Section 211 of the Companies Act, 1956.

2.2 Use of Estimates

The preparation of financial statements in conformity with the

generally accepted accounting principles requires estimates

and assumptions to be made that affect the reported

balances of assets and liabilities and disclosures relating to

contingent liabilities as at the reporting date and the reported

amounts of income and expenses during the reporting

period. Differences between the actual results and estimates

are recognised in the period in which the results are known /

materialised.

2.3 Fixed Assets

Fixed assets are recorded at cost of acquisition or at revalued

amounts less accumulated depreciation and impairment loss,

if any. Cost of acquisition of fleet includes brokerage, start up

costs and cost of major improvements / upgradations.

Assets acquired under finance leases are capitalised as

fixed assets at lower of fair value at inception of the lease

and the present value of minimum lease payments and a

corresponding liability is recognised. The lease rentals paid

(excluding operating expenses) are bifurcated into principal

and interest components by applying an implicit rate of

return. The interest is charged against income as a period

cost and the principal amount is adjusted against the liability

recognised in respect of assets taken on finance lease.

Foreign exchange differences on conversion / translation /

settlement in respect of long term monetary items used for

acquisition of depreciable fixed assets are added to the cost

of fixed assets.

2.4 Depreciation

Depreciation on fleet, including second hand fleet, is

provided by using the straight-line method based on a

technical evaluation of the economic useful life of respective

vessels or at the rates prescribed under the Schedule XIV to

the Companies Act, 1956, whichever is higher as follows:

Assets Method of depreciation Estimated useful life

Tankers

SLM over balance useful life or 5% whichever is higher

14-25 years

Bulk carriers 3-26 years

Mini bulk carriers 20 years

Tugs SLM over balance useful life or 7% whichever is higher 20 years

Plant & machinery SLM over balance useful life or 4.75% whichever is higher 20 years

Depreciation on addition of assets due to exchange variation is provided over the remaining useful life of the asset.

51



Depreciation on water circulation treatment plant and aircraft

is provided by using the straight-line method at the rates

prescribed in Schedule XIV to the Companies Act, 1956.

All other assets are depreciated by using the written down

value method at the rates prescribed in Schedule XIV to the

Companies Act, 1956. Assets costing less than Rs. 5,000/-

are depreciated at 100% in the year of acquisition.

Depreciation on the incremental value of fixed assets upon

revaluation is recouped proportionately from fixed assets

revaluation reserve.

Depreciation on additions / deductions to fixed assets made

during the year is provided on a pro-rata basis from / upto

the date of such additions / deductions, as the case may be.

Profit or loss on disposal of revalued fixed assets is

recognised with reference to their revalued carrying values.

The balance, if any, in the fixed assets revaluation reserve

relating to revalued fixed assets that are sold / disposed is

transferred to general reserve.

2.5 Impairment of Assets

The Company assesses on each balance sheet date whether

there is any indication that an asset may be impaired. If

any such indication exists, the Company estimates the

recoverable amount of the asset. If such recoverable amount

of the asset is less than its carrying amount, the carrying

amount is reduced to its recoverable amount. The amount so

reduced is treated as an impairment loss and is recognised

in the statement of profit and loss, except in case of revalued

assets, where it is first adjusted against the related balance

in fixed assets revaluation reserve.

If at the balance sheet date, there is an indication that a

previously assessed impairment loss no longer exists, the

recoverable amount is reassessed and the asset is carried at

the recoverable amount subject to a maximum of depreciated

historical cost, except for revalued assets which are subject

to a maximum of depreciated revalued cost.

2.6 Borrowing Costs

Borrowing costs that are directly attributable to the

acquisition, construction / development of qualifying asset

are capitalised as a part of cost of such asset. A qualifying

asset is one that necessary takes substantial period of time

to get ready for the intended use.

Costs in connection with the borrowing of funds to the extent

not directly related to the acquisition of fixed assets are

amortised and charged to the Statement of Profit and Loss,

over the tenure of the loan.

2.7 Investments

a) Long term investments are carried at cost less

provision for other than temporary diminution in the

fair / market value of these investments.

b) Current investments are carried at lower of cost and

fair value.

2.8 Inventory

Inventory is valued at the lower of cost and net realisable

value. Cost is determined on first-in-first-out basis.

2.9 Fleet Operating Earnings

Fleet operating earnings represent the value of charter hire

earnings, demurrage, freight earnings, fleet management fees

and lighterage earnings, and are accounted on accrual basis.

Freight earnings are recognised on a pro-rata basis for voyages

in progress at balance sheet date after loading of the cargo is

completed; revenues and related expenses for voyages where

cargo has not been loaded as on the balance sheet date are

deferred and recognised in the following year. Lighterage is

recognised on the basis of unloading of entire cargo.

2.10 Interest Income

Interest income is recognised on an accrual basis.

2.11 Dividend Income

Dividend income is recognised when the right to receive the

payment is established by the Balance sheet date.

2.12 Insurance Claims

Insurance claims are recorded based on reasonable certainty

of their settlement.

2.13 Fleet Operating Expenses

All expenses relating to the operation of the fleet including

crewing, insurance, stores, bunkers, dry docking, charter

hire and special survey costs are expensed under fleet

operating expenses on accrual basis.

2.14 Operating Leases

Rentals are expensed with reference to the terms of the lease

agreement and other considerations in respect of operating

leases.

2.15 Employee Benefits

a) The Company (employer) and the employees

contribute a specified percentage of eligible

employees’ salary- currently 12%, to the employer

established provident fund “Essar Staff Provident

Fund” set up as an irrevocable trust by the

Company. The Company is generally liable for

annual contributions and any shortfall in the fund

assets based on government specified minimum

rates of return – currently @ 8.6%, and recognises

such provident fund liability, considering fund as

the defined benefit plan, based on an independent

actuarial valuation carried out at every statutory year

end.

b) Provision for gratuity for floating staff is made as

under:

(i) For officers on actuarial valuation.

(ii) For crew on accrual basis as per rules of the

National Maritime Board and is charged to the

Statement of Profit and Loss.



Contribution in respect of gratuity for on shore

staff is made to Life Insurance Corporation of

India based on demands made. The Company

also accounts for gratuity liability based on an

independent acturial valuation carried out at

every statutory year end.

c) Contribution towards superannuation, funded by

payments to Life Insurance Corporation of India, is a

fixed percentage of the salary of eligible employees

under a defined Contribution plan, and is charged

to the Statement of Profit and Loss.

d) Provision for all compensated absences of eligible

employees is based on an independent actuarial

valuation.

e) The Company has formulated Employee Stock

Option Schemes (ESOSs) in accordance with

Securities and Exchange Board of India (Employee

Stock Option Scheme) Guidelines, 1999. The

Schemes provide for grant of options to employees

of the Group to acquire the equity shares of the

Company that vest in a graded manner and that are

to be exercised within a specified period.

In accordance with the SEBI Guidelines and the

guidance note on “Accounting for Employee Share

based payments” notified under the Companies

(Accounting Standard) Rules, 2006, the excess,

if any, of the market price of the share preceding

the date of grant of the option under ESOSs over

the exercise price of the option is amortised on a

straight-line basis over the vesting period.

2.16 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded

at standard exchange rates determined monthly which

approximates the actual rate on the date of transaction. The

difference between the standard rate and the actual rate of

settlement is accounted in the Statement of Profit and Loss.

Monetary items denominated in foreign currency are

translated at the rate prevailing at the end of the year. Gains

/ losses on conversion / translation / settlement of foreign

currency transactions are recognised in the Statement of Profit

and Loss, except gains / losses on conversion / translation /

settlement in respect of long term foreign currency monetary

items related to acquisition of a depreciable asset is adjusted

to the carrying amount to those depreciable assets and

depreciated over the balance life of the asset.

Gains / losses on conversion / translation / settlement in

respect of long term foreign currency items relates to other

than an acquisition of depreciable assets are accumulated

in a “Foreign Currency Monetary Item Translation Difference

Account” and amortised over the balance period of such

long term foreign currency item but not beyond March 31,

2020.

2.17 Taxes on Income

a) Income tax on income from qualifying fleet is

provided on the basis of the Tonnage Tax Scheme

whereas income tax on other income and fringe

benefit tax are provided as per other provisions of

the Income Tax Act, 1961.

b) The tax effect of timing differences relating to non-

tonnage tax activities that occur between taxable

income and accounting income and are capable

of reversal in one or more subsequent periods are

recorded as a deferred tax asset or deferred tax

liability. They are measured using the substantively

enacted tax rates and tax regulations as at the

balance sheet date.

Deferred tax assets arising on account of brought

forward losses and unabsorbed depreciation under

tax laws are recognised only if there is a virtual

certainty of realisation, supported by convincing

evidence. Deferred tax assets on account of other

timing differences are recognised to the extent there

is reasonable certainty of realisation.

2.18 Provisions, Contingent Liabilities and Contingent

Assets

Provisions are recognised for present obligations arising out

of past events if it is probable that an outflow of economic

resources, the amount of which can be reliably estimated,

will be required to settle the obligation.

Contingent liabilities are disclosed in respect of possible

obligations that arise from past events, the existence of

which will be confirmed by the occurrence or non occurrence

of one or more uncertain future events not wholly within

the control of the Company, or a present obligation that is

not recognised because a reliable estimate of the liability

cannot be made, or the likelihood of an outflow of economic

resources is remote.

Contingent assets are neither recognised nor disclosed in

the financial statements.

2.19 Segment Accounting Policies

The company has only one reporting segment in current year.

a) Segment assets and segment liabilities:

Segment assets include all operating assets used

by the segment and consist principally of fixed

assets, inventories, sundry debtors, cash and bank

balances. Segment assets and liabilities do not

include share capital, reserves and surplus, income

tax and unallocable assets and liabilities.

b) Segment revenue and segment expenses:

Segment revenue and expenses have been

identified to its segment on the basis of relationship

to its operating activities. It does not include interest

income on investment, inter corporate deposits,

interest expense and provision for taxes.

53



3 SHARE CAPITAL

ParticularsAs at March 31, 2012 As at March 31, 2011

Number (Rs. in lakhs) Number (Rs. in lakhs)

(a) Authorised

Equity shares of Rs.10/- each 1,000,000,000 100,000.00 1,000,000,000 100,000.00

Redeemable cumulative preference shares of

Rs. 100/- each

1,050,000 1,050.00 1,050,000 1,050.00

101,050.00 101,050.00

Issued, subscribed and fully paid up

Equity shares of Rs.10/- each (refer note) 410,455,552 41,045.56 410,455,552 41,045.56

Forfeited equity shares 246,648 13.05 246,648 13.05

41,058.61 41,058.61

Note: Of above 17,18,87,182 (previous year 17,18,87,182) equity shares were allotted as fully paid up equity shares

for consideration other than cash pursuant to scheme of amalgamation during financial year 2008-09.

(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Particulars As at March 31, 2012 As at March 31, 2011


a) Equity shares of Rs. 10/- each

At the beginning of the year 410,455,552 41,045.56 615,683,320 41,045.56

Add: Pending allotment of shares – – – –

Add: Issue of shares – – – –

Less: Extinguishment under the scheme of

arrangement – – (205,227,768) –

Outstanding at the end of the year 410,455,552 41,045.56 410,455,552 41,045.56

(c) Terms / rights attached to equity shares

The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one

vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining

assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(d) Shares held by holding / ultimate holding company and/or their subsidiaries / associates and details of the

shareholding more than 5% shares in the company


Number % Number %


Essar Shipping & Logistics Limited, Cyprus the

holding company 284,503,711 69.31 340,903,706 83.05

Essar Global Limited, the ultimate holding

company 66 0.00 66 0.00

Essar Projects (India) Limited, subsidiary of the

ultimate holding company 56,396,995 13.74 – –

Essar Steel India Limited, subsidiary of the ultimate

holding company 2,547,223 0.62 2,547,223 0.62

Essar Investments Limited, related party 134,338 0.03 131,338 0.03

Imperial Consultants & Securities Private Limited,

related party 4,826 0.00 4,826 0.00

343,587,159 83.71 343,587,159 83.71



(i) 7,40,334 shares (as at March 31, 2011 NIL shares) of Rs. 71.10 each towards outstanding employee stock options

granted / available for grant (refer note 28).

(ii) 2,04,75,463 shares (as at March 31, 2011, 2,04,75,463 shares) of Rs. 91.70 each towards 5% Foreign Currency

Convertible Bonds (Refer Note (ii) in Note 5 Long-term borrowings).

4 RESERVES AND SURPLUS (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

a. General Reserves

Opening balance 64,485.74 91,113.99

Add: Transfer from tonnage tax utilised reserve – 15,000.00

Less: Adjustment on account of demerger – (41,628.26)

Closing balance 64,485.74 64,485.74

b. Capital Redemption Reserve

Opening balance – 1,050.00


Closing Balance – –

c. Securities Premium Account



Closing Balance – –

d. Debenture redemption reserve



Closing balance – –

e. Revaluation Reserve

Opening balance 105.50 11,280.70

Less: Depreciation on enhanced value of fixed assets (11.16) (1,924.72)


Closing balance 94.34 105.50

f. Tonnage Tax Reserve




g. Tonnage Tax Utilised Reserve


Less: Transferred to general reserve – (15,000.00)


h. Capital Reserve on Amalgamation




i. Surplus / (deficit) in the statement of profit and loss

Opening balance 162,374.49 110,991.14

Add: Net profit for the current year (7,099.68) 2,087.48

Add: Balance acquired on amalgamation – 49,295.87

Less: Proposed dividends on equity shares (2,052.28) –

Net surplus in the statement of profit and loss 153,222.53 162,374.49

Total reserves and surplus 223,352.61 232,515.73

55



5 LONG TERM BORROWINGS (Rs. in lakhs)

Non current portion Current maturities

Paerticulars

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

Secured

from financial institution

Rupee term loan [refer note (i) below] 20,000.00 –

Total Secured Loan [A] 20,000.00 – – –

Unsecured

(a) 5% Foreign currency convertible bonds

[refer note (ii) below]

Series B: US$ 18,571,428 (previous year: US$

18,571,428 ) interest bearing bonds due on

August 24, 2017.

9,500.49 8,295.86 – –

Series A: US$ 21,428,572 (previous year: US$

21,428,572 ) interest bearing bonds due on

August 24, 2015.

10,962.11 9,572.14 – –

5 LONG TERM BORROWINGS (CONTD...) (Rs. in lakhs)


Particulars

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

(b) Rupee term loan from banks – 18,750.00 3,750.00

(c) Rupee term loan from financial institutions – 30,000.00 30,000.00 –

Total unsecured loan 20,462.60 66,618.00 30,000.00 3,750.00

Total [A + B] 40,462.60 66,618.00 30,000.00 3,750.00

Less: Amount disclosed under the head

'other current liabilities' (refer note10) – – (30,000.00) (3,750.00)

Long term borrowings 40,462.60 66,618.00 – –

i) Secured rupee term loan from financial institution carries interest @ (base rate - 3.75%) per annum (as at March

31, 2012 - 13.75% p.a.) and is repayable in 12 monthly instalments of Rs. 1,666.67 lakhs each. Repayment starts

from July 31, 2013. The loan is secured against movable fixed assets and all the cash flows including dividend and

receivables of the Company.

ii) Foreign Currency Convertible Bonds carries interest @ 5% per annum payable semi annually. The bonds are convertible

into equity shares of the Company, any time upto the date of maturity at the option of the bond holders at conversion

price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per USD. The bonds if not converted till

the maturity date will be redeemed at par.

iii) Unsecured rupee term loan from financial institutions carry interest rate of 13% per annum, repayable on April 1, 2012.

Essar Shipping & Logistics Limited has given corporate guarantee of Rs. 30,000 lakhs.

iv) Unsecured rupee term loan of previous year from banks carry interest @ (base rate - 3.75%) per annum, repaid on

July 1, 2011.



6 OTHER LONG TERM LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Others

Advance from customers 12,955.94 2,119.88

Total 12,955.94 2,119.88

7 PROVISIONS (Rs. in lakhs)

Long term provisions Short term provisions

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

(a) Provision for employee benefits

Gratuity 7.80 5.58 – –

Compensated absences 131.77 101.48 5.14 5.28

(b) Others

Provisions for taxation (net of advance tax ) – – 114.61 164.41

Proposed dividend on equity shares – – 2,052.28 –

Total 139.57 107.06 2,172.03 169.69

8 SHORT TERM BORROWINGS (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Unsecured

12.5 % Loans repayable on demand-from related parties (Refer note 32) 3,500.00 3,500.00

Total 3,500.00 3,500.00

9 TRADE PAYABLES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Trade payables (Refer note 32) 1,556.58 –

Total 1,556.58 –

10 OTHER CURRENT LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Payable in respect of capital goods (Refer note 32) 4,568.55 –

Advance from customers 2,426.04 1,300.63

Current maturities of long-term borrowings (Refer note 5) 30,000.00 3,750.00

Interest accrued but not due on borrowings 605.74 204.59

Payable in respect of investment 18,587.80 –

Other liabilities

- Statutory dues 145.64 52.17

- Payable in respect of demerger 795.93 1,545.88

Total 57,129.70 6,853.27

57



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12 INVESTMENTS (Rs. in lakhs)

Non current Investments

Particulars As at

March 31, 2012

As at

March 31, 2011

Trade investments (valued at cost)

(a) Investments in equity shares (unquoted, fully paid up )

Investment in subsidiaries

45,000 (PY : 37,500) equity shares of Rs.10/- each of Essar Paradip

Terminals Limited 4.50 3.75

NIL (PY : 24,500) equity shares of Rs. 10/- each of Essar Bulk Terminal

Paradip Limited – 2.45

37,00,000 (PY : 9,98,88,850) equity shares of Rs. 10/- each of Essar

Bulk Terminal Limited 373.66 10,087.72

7,86,54,397 (PY : 5,46,54,397) equity shares of Rs. 10/- each of

Vadinar Ports & Terminals Limited 7,527.87 5,127.87

1,04,61,42,000 (PY : 1,04,61,42,000) equity shares of Rs. 10/- each of

Vadinar Oil Terminal Limited 122,921.01 122,921.01

30,04,875 (PY : 30,04,875) equity shares of Rs. 10/- each of Essar Bulk

Terminal (Salaya) Limited 320.04 320.04

131,147.08 138,462.83

(b) Investments in preference shares (unquoted, fully paid up)

Investment in subsidiaries

11,55,00,000 (PY : 66,00,000) 0.01% compulsorily convertible

cumulative participating preference shares of Rs. 10/- each of Essar

Bulk Terminal Paradip Limited

11,550.00 6,600.00

3,29,30,000 (PY : 3,29,30,000) 0.01% optionally convertible

redeemable cumulative Preference Share of Rs.10/- each of Essar Bulk

Terminal Limited

57,546.72 57,546.72

7,90,22,903 (PY : 7,90,22,903) 0.01% fully convertible cumulative

preference shares of Rs. 10/- each of Essar Bulk Terminal Limited 116,136.22 116,136.22

12,99,84,850 (PY : NIL) 0.01% compulsorily convertible cumulative

participating preference shares of Rs. 10/- each of Essar Bulk Terminal

Limited

28,303.72 –

20,50,73,630 (PY : 12,70,00,000) 0.01% compulsorily convertible

cumulative participating preference shares of Rs. 10/- each of Essar

Bulk Terminal ( Salaya) Limited

20,358.26 12,550.84

90,00,000 (PY : NIL) 0.01% compulsorily convertible cumulative

participating preference shares of Rs. 10/- each of Essar Paradip

Terminals Limited

900.00 –

234,794.92 192,833.77

Total 365,942.00 331,296.60

59



13 LOANS AND ADVANCES (Rs. in lakhs)

Non current loans and

advancesCurrent loans and advances

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

Advance recoverable in cash or kind or for

value to be received

Unsecured, considered good – – 14.84 –

Advance towards allotment of shares

(Refer note 32) – – 100.00 10,382.36

Advance income-tax and Tax deducted at source

(net of provision for taxation) – – 1,809.23 1,615.46

Prepaid expenses 41.71 585.67 47.00 40.00

Balance with excise authorities 1,176.21 – 172.00 124.54

Insurance claim receivable – – – 291.83

Total 1,217.92 585.67 2,143.07 12,454.19

14 TRADE RECEIVABLES AND OTHER ASSETS (Rs. in lakhs)

Non current Current

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

a. Trade receivables – – 730.97 –

Total – – 730.97 –

b. Others (unsecured and considered good,

unless stated otherwise)

Interest accrued on fixed deposits – – 0.73 99.00

Foreign currency monetary item translation

difference account (FCMITDA) 1,662.72 – 529.11 –

Others (receivable from service rendered &

includes Rs. 148 lakhs towards interest on

income tax refund)

– – 997.56 –

Total 1,662.72 – 1,527.40 99.00



15 CASH AND BANK BALANCES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

A. Cash and cash equivalents

Balances with banks

On current accounts 52.86 17.08

[A] 52.86 17.08

B. Other bank balances

Margin money deposit 160.00 3,850.00

[B] 160.00 3,850.00

Total cash and bank balances [A+B] 212.86 3,867.08

Note:

i) Current year deposit is placed against bank guarantee facility.

ii) Previous year deposit includes guarantee in favour of DGFT Bangalore and cash margin against loan.

16 REVENUE FROM OPERATIONS (Rs. in lakhs)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011

Sale of services

Fleet operating and chartering earnings 3,622.00 48,686.69

Total 3,622.00 48,686.69

17 OTHER INCOME (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Interest income

- from banks 39.98 252.95

- from others – 5,323.41

Management fee income 1,408.31 –

Profit on sale of fleet / assets – 3,011.46

Dividend from others – 108.84

Net gain on sale of long term investments 2.44 5,259.71

Income on long term investments – 1,740.06

Net gain on sale of investments – 84.96

Net gain on foreign currency translation and transaction (other than

considered as finance cost) – 1,467.46

Interest on income tax refund 183.63 –

Miscellaneous Income – 0.50

Total 1,634.36 17,249.35

61



18 EMPLOYEE BENEFITS EXPENSE (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Operating

Salaries, wages and bonus 255.80 2,317.39

Contribution to staff provident and other funds 3.64 77.11

Staff welfare expenses 0.95 374.51

Establishment




Total 927.46 4,780.35

19 OPERATING EXPENSES (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Consumption of stores and spares 116.06 703.55

Consumption of fuel, oil and water – 6,921.70

Direct voyage expenses 303.84 19,976.90

Commission, brokerage and agency fees 147.29 251.54

Standing costs – 1,092.31

Dry docking expenses 125.89 1,717.74

Insurance, protection and indemnity club fees 33.40 612.16

Total 726.48 31,275.89

20 ESTABLISHMENT AND OTHER EXPENSES (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Rent – 401.05

Rates and taxes – 0.02

Repairs and maintenance

- buildings – 19.08

- others 2.76 195.55

Legal and professional fees 132.34 696.49

Traveling and conveyance 54.77 219.05

Auditors' remuneration (refer note below) 31.90 48.29

Other establishment expenses 73.88 217.86

Amortisation of foreign currency monetary item translation difference

account (FCMITDA) 402.74 –

Total 698.39 1,797.39

Auditors’ remuneration includes

For audit 10.00 22.00

For other assurance services 20.55 25.94

For reimbursement of expenses 1.35 0.35

Total 31.90 48.29



21 FINANCE COSTS (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Interest expense

- on bank loans 727.71 7,734.95

- on loan from financial Institution 5,951.92 966.29

- on finance lease obligations - 3,047.22

- on foreign currency convertible bonds 1,106.27 1,129.78

- on debentures - 4,044.40

- on others 788.73 827.12

Other borrowing costs 665.30 657.76

Total 9,239.93 18,407.52

22 COMPOSITE SCHEME OF ARRANGEMENT

The Hon’ble High Court of Gujarat at Ahmedabad vide order dated March 1, 2011 approved the Composite Scheme

of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports & Terminals Limited

(EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).

The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics

Business and the Oilfields Services Business into ESL.

Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields

Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing

in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are

based on financial statements as on September 30, 2010.

Foreign Currency Convertible Bonds aggregating to USD 2,400 lakhs (out of USD 2,800 lakhs) issued by ESPLL stood

transferred to ESL.

In consideration of the demerger, for every three equity shares held by a member as on the record date, the Company

allotted two equity shares of Rs.10/- each as fully paid up to the eligible members of ESPLL whose name were recorded

in the register of members as on May 21, 2011.

23 DEFERRAL / CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification issued by the Central Government under Companies (Accounting Standards) Amendment

Rules, 2009 dated March 31, 2009; the exchange differences arising on conversion / translation / settlement of long-

term foreign currency monetary items in so far as they relate to the acquisition of a depreciable capital asset, has been

added to or deducted from the cost of the respective asset and has been depreciated over the remaining balance life of

the asset. In case of exchange difference related to any other long-term foreign currency monetary item, the exchange

difference is accumulated in the "foreign currency monetary item translation difference account", (FCMITDA) and is

amortised over the balance period of such long term monetary item but not beyond accounting period ending on or

before March 31, 2020 .The following is the effect of the option exercised:-

63



(Rs. in lakhs)

Particulars March 31, 2012 March 31, 2011

Net exchange (gain) / loss (deducted) / capitalised to the cost of the

fixed assets / CWIP – 718.00

Net exchange (gain) / loss transferred to foreign currency monetary item

translation difference account (FCMITDA) 2,594.60 –

Amortisation of the above net exchange (gain) / loss for the year

recognised in statement of profit & loss 402.77 –

Balance in FCMITDA shown as trade receivables and other assets

(Refer note 14) 2,191.83 –

24 CONTINGENT LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

i) Guarantees given by banks on behalf of subsidiary 1,600.00 -

ii) Corporate guarantees on behalf of subsidiaries 201,160.00 246,530.00

Commitments to invest in subsidary companies 23,467.15 29,257.15

25 SEGMENT REPORTING

a) Business Segment

The Company has one primary business segment of fleet operations and chartering .

b) Geographical segment

The Company’s fleet operations are managed on a worldwide basis from India. Fleet operating and chartering

earnings based on the geographical location of customers:

(Rs. in lakhs)

Fleet operating and chartering earnings Year ended

March 31, 2012

Year ended

March 31, 2011

India 3,622.00 35,577.30

China - 1,508.20

U.S.A - 2,496.19

U.K. - 2,017.20

Rest of the world - 7,087.80

Total 3,622.00 48,686.69

26 EARNINGS PER SHARE


March 31, 2012

Year ended

March 31, 2011

The calculation of the basic and diluted earnings per share is based

on the following data:

Earnings for the purpose of basic earnings per share (net (loss) / profit

for the year) (Rs. in lakhs) (7,099.68) 2,087.48

Equity shares at the beginning of the year (nos.) 410,455,552 615,683,320

Equity shares reduced on account of demerger (nos.) – 205,226,773

Equity shares at the end of the year (nos.) 410,455,552 410,455,552





March 31, 2012

Year ended

March 31, 2011

Weighted average equity shares for the purpose of calculating basic

earnings per share (nos.) 410,455,552 410,455,552

Weighted average equity shares for the purpose of calculating diluted

earnings per share (nos.) 410,455,552 410,455,552

Earnings per share-basic and dilutive (face value of Rs.10/- each) (Rs.) (1.73) 0.51

FCCB and ESOP have not been considered for purpose of calculation of the weighted average number of equity shares for

dilution purposes as they are anti-dilutive.

27 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

A) Derivative contracts outstanding as at the Balance sheet are as follows:

There were no forward / options contracts entered into by the Company during the financial year to hedge its foreign

currency exposures.

B) Unhedged foreign currency exposure

The outstanding foreign currency exposures that have not been hedged by a derivative instrument or otherwise are

given below:


(Rs. in lakhs) (In lakhs) (Rs. in lakhs) (In lakhs)

(a) Amount receivable in foreign currency on

account of the following:

i) Export of services 798.00 USD 15.60 – –

ii) Bank balances 5.46 USD 0.12 5.00 USD 0.11

(b) Amount payable in foreign currency on

account of the following:

Foreign Currency Convertible Bond (including

interest accrued but not due) 20,549.57 USD 401.70 17,943.94 USD 401.70

28 EMPLOYEE STOCK OPTION SCHEME

a) The members of the Company at the Annual General Meeting held on September 9, 2011 have approved the issue

of Employee Stock Options under the “Essar Ports Employee Stock Options Scheme - 2011” (hereinafter referred to

as the Scheme). The Scheme shall be operated and administered under the superintendence of the Remuneration

Committee of the Board.

Eligible Employees of the Company, its holding company and subsidiaries are entitled to Options under the Scheme.

Each Option entitles the Eligible Employees to one underlying equity share of the Company.

A trust will be formed for the administration of the Scheme. The Remuneration Committee is authorised to grant

the Options to the Eligible Employees and the Exercise Price of the Options in terms of the Scheme. 1/3rd of the

options granted will vest in the hands of the eligible employees over a period of 3 years commencing from the end

of the 3rd, 4th and 5th year respectively of the date of grant of the Option. The Eligible Employees can exercise the

options vested in them within a period of 7 years from the date of vesting.

(contd...)

65



b) Employee stock options details for ESOP as on the balance sheet date are as follows:


March 31, 2012

Year ended

March 31, 2011

Options

(numbers)

Weighted

average

exercise price

per option

(in Rs.)

Options

(numbers)

Weighted

average

exercise price

per option

(in Rs.)

Option outstanding at the beginning of the year – – NA NA

Granted during the year 740,334 71.1 NA NA

Vested during the year – – NA NA

Exercised during the year – – NA NA

Lapsed during the year – – NA NA

Options outstanding at the end of the year 740,334 71.1 NA NA

c) The impact on statement of profit and loss and earnings per share if the ‘fair value’ of the options (on the date

of the grant) were considered instead of the ‘intrinsic value’ is as under:(Rs. in lakhs)

ParticularsYear ended

March 31, 2012

Year ended

March 31, 2011

Net Profit / (loss) (as reported) (7,099.68) NA

Add / (Less): Stock based employee compensation (intrinsic value) – NA

Add / (Less): Stock based compensation expenses determined under

fair value method for the grants issued 26.78 NA

Net Profit / (loss) (proforma) (7,126.46) NA

Basic and dilutive earnings per share (as reported) (1.73) NA

Basic and dilutive earnings per share (proforma) (1.74) NA

d) The fair value of the Options granted is estimated on the date of grant using Black Scholes options pricing model

taking into account the terms and conditions upon which the options were granted. The following table lists the

inputs to the model used for calculating fair value: (Rs. in lakhs)

Assumptions Year ended

March 31, 2012

Year ended

March 31, 2011

Risk free interest rate 8.36% NA

Expected life 58 NA

Expected annual volatility of shares 64.81% NA

Expected dividend yield 0.00% NA



29 DEFERRED TAX LIABILITY

The components of deferred tax liability are as follows:


March 31, 2012

Year ended

March 31, 2011

Deferred tax liability

Depreciation of fixed assets (timing difference) 142.45 –

A 142.45 –

Deferred tax assets –

Tax on unabsorbed depreciation 142.45 –

B 142.45 –

Net deferred tax liability (A - B) – –

30 GOING CONCERN

As on March 31, 2012, the Company's current liabilities exceeded its current assets by Rs. 59,744.01 lakhs due to

classification as current of borrowings amounting to Rs. 30,000 lakhs repayable within the next one year, Rs. 4,568.55

lakhs payable for purchase of capital assets and Rs. 18,587.80 lakhs payable for purchase of investment. Subsequent

to year end, the Company has rolled over loans of Rs. 30,000 lakhs for a period exceeding 12 months. The Company

is also in discussion for raising additional funds through equity . As such, the excess current liabilities position will

not affect the operations of the Company and therefore these financial statements have been prepared as a going

concern.

31 EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under:

I. Defined contribution plans

The Company has recognised the following amounts in the statement of profit and loss during the year:

(Rs. in lakhs)

Particulars 2011-12 2010-11

a) Employer’s contribution to gratuity fund (offshore crew staff) 0.60 29.00

b) Group accident policy premium (all employees) – 1.00

c) Contribution to pension fund (offshore crew staff) 2.39 11.00

d) Employer’s contribution to superannuation fund – 11.00

e) Employer’s contribution to provident fund (offshore crew staff) 0.87 7.00

The above amounts are included in ‘contribution to staff provident and other funds’ (refer note 18).

II. Defined benefit plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

In accordance with AS-15, the relevant disclosures are as under:

67



(A) Changes in present value of defined benefit obligation: (Rs. in lakhs)

ParticularsProvident fund

(funded)

Gratuity-shore officers

(funded)

Gratuity-off shore

officers

(non funded)

CA

(non funded)

31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11

Present value of defined benefit

obligation – opening balance 1,408.24 1,668.75 30.37 79.20 – 194.70 52.83 115.77

Current service cost 19.26 119.80 4.65 16.72 – 15.00 4.61 18.08

Current service contribution-

employee 36.26 132.93 – – – – 4.15 –

Interest cost 15.92 86.52 2.43 6.05 – 8.00 – 8.94

Past service cost – – – 66.92 – – – –

Acquisitions 68.52 (419.04) – (156.46) – (225.70) – (133.13)

Benefits paid – (259.60) – (3.22) – – (13.66) (2.38)

Actuarial (gain) / loss on

obligations (1,279.74) 78.88 (1.63) 21.16 – 8.00 (1.91) 45.55


obligation – closing 268.46 1,408.24 35.82 30.37 – – 46.02 52.83

(B) Changes in the fair value of plan asset: (Rs. in lakhs)


(funded)

Gratuity-shore of-

ficers

(funded)

Gratuity-off shore

officers

(non funded)

CA

(non funded)

31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11

Fair value of plan assets as –

opening 1,408.24 1,668.74 24.79 78.73 – – – –

Expected return on plan

assets 15.92 86.52 2.21 8.35 – – – –

Actual return on plan assets – – – – – – – –

Acquisition adjustment – (166.30) – (103.15) – – – –

Actuarial gains / (losses) (1,279.74) 78.88 0.04 1.74 – – – –

Contributions by the employer /

employees

124.04 – 2.35 42.34 – – – 2.00

Benefits paid – (259.60) – (3.22) – – – (2.00)

Fair value of plan assets – closing 268.46 1,408.24 29.39 24.79 – – – –

(C) Amount recognised in balance sheet: (Rs. in lakhs)


(funded)


(funded)

Gratuity-off shore

officers

(non funded)

CA

(non funded)

31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11


obligation 268.46 1,408.24 35.82 30.37 – – 46.02 52.83

Fair value of plan assets as at

March 31, 2011 268.46 1,408.24 29.39 24.79 – – – –

Liability / (asset) recognised in the

balance sheet (included in current

liabilities and provisions)

(refer note 8)

– – 6.43 5.58 – – 46.02 52.83



(D) Expenses recognised in the Statement of Profit and Loss: (Rs. in lakhs)


(funded)


(funded)

Gratuity-off shore

officers

(non funded)

CA

(non funded)

31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11


Interest cost 15.92 86.52 2.43 6.05 – 8.00 4.15 8.94

Expected return on plan assets (15.92) (86.52) (2.21) (8.35) – – – –


Net actuarial (gain) / loss

recognised in the period – – (1.66) 19.43 – 8.00 (13.66) 45.55

Total expenses recognised in the

statement of profit and loss{(included in contribution to provident

and other funds) (refer note 8)}.

19.26 119.80 3.21 100.77 – 31.00 (4.90) 72.57

(E) Experience history: (Rs. in lakhs)

Particulars Gratuity-shore officers (funded)

31.03.12 31.03.11 31.03.10 31.03.09 31.03.08

Defined benefit obligation at the end of the year (35.82) (30.00) (79.00) (53.00) NA

Plan assets at the end of the period 29.38 25.00 79.00 77.00 NA

Funded status (6.44) 5.00 – 24.00 NA

Experience gain / (loss) adjustments on plan liabilities 0.89 (21.00) (29.00) 70.00 NA

Experience gain / (loss) adjustments on plan assets 0.04 1.00 – – NA

Actuarial gain / (loss) due to change on assumptions 0.74 0.39 7.00 – NA

(Rs. in lakhs)

Particulars Gratuity-offshore officers (non funded)

31.03.12 31.03.11 31.03.10 31.03.09 31.03.08

Defined benefit obligation at the end of the year – – (190.00) (280.00) NA

Plan assets at the end of the period – – – – NA

Funded status – – (190.00) (280.00) NA

Experience gain / (loss) adjustments on plan liabilities – – 90.00 59.00 NA

Experience gain / (loss) adjustments on plan assets – – – – NA

Actuarial gain / (loss) due to change on assumptions – – 34.00 52.00 NA

(Rs. in lakhs)

Particulars CA (non funded)

31.03.12 31.03.11 31.03.10 31.03.09 31.03.08

Defined benefit obligation at the end of the year (46.02) (53.00) (116.00) (54.00) NA

Plan assets at the end of the period – – – – NA

Funded status (46.02) (53.00) (116.00) (54.00) NA

Experience gain / (loss) adjustments on plan liabilities 12.41 (45.00) (91.00) 170.00 NA

Experience gain / (loss) adjustments on plan assets – – – – NA

Actuarial gain / (loss) due to change on assumptions 12.41 – 36.00 (54.00) NA

(F) Category of plan assets:

Percentage of each category of plan

assets to total fair value of plan assets:

Provident fund

(funded)


(funded)

Gratuity-off shore

officers (non funded)

CA

(non funded)

Particulars 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11

Administered by Life Insurance

Corporation of India– – 100% 100% – – – –

Government of India security 25% 25% – – – – – –

Public sector bonds / TDRs 60% 60% – – – – – –

State government securities 15% 15% – – – – – –

69



(G) Actuarial assumptions

In accordance with Accounting Standard (AS) 15 (revised), actuarial valuation as at the year end was done in respect

of the aforesaid defined benefit plans based on the following assumptions:

i) General assumptions:


(funded)


(funded)

Gratuity-off shore

officers

(non funded)

CA

(non funded)

31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11

Discount rate (per annum) 8.50% 7.80% 8.50% 8.00% – – 8.50% 8.00%

Rate of return on plan assets (for

funded scheme) 8.60% 8.50% 8.50% 8.50% – N.A NA NA

Expected retirement age of

employees (years) 58 58 58 58 – – 58 58

Separation rate of employees – – 10.00% 10.00% – – 10.00% 10.00%

Rate of increase in compensation – – 9.00% 9.00% – – 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) mortality table.

iii) Leave policy:

a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be availed

by the employee against future sick leave; the sick leave balance is not available for encashment.

b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed

by the employee is available for encashment on separation from the Company up to a maximum of 120 days.

iv) As this is the fourth year of implementation of Accounting Standard (AS) –15 (revised), only corresponding previous

three year figure have been furnished.

v) The contribution to be made by the Company for funding its liability for gratuity during the financial year 2012–13 will

be made as per demand raised by the fund administrator Life Insurance Corporation of India.

32 RELATED PARTY TRANSACTIONS:

a) Holding companies :

i) Essar Global Limited, Cayman Island, ultimate holding company

ii) Essar Shipping & Logistics Limited, Cyprus, immediate holding company

b) Subsidiaries:

i) Essar Bulk Terminal Limited

ii) Vadinar Oil Terminal Limited

iii) Vadinar Ports & Terminals Limited

iv) Essar Bulk Terminal (Salaya) Limited

v) Essar Bulk Terminal Paradip Limited (w.e.f March 31, 2011)

vi) Essar Paradip Terminals Limited

vii) Essar Shipping Limited (formerly known as Essar Ports & Terminals Limited) upto October 1, 2010

viii) Essar Logistics Limited (upto September 30, 2010)

(ix) Essar Oilfield Services India Limited (upto September 30, 2010)

(x) Essar Oilfields Services Limited, Mauritius (upto September 30, 2010)

c) Key Management Personnel

(i) Mr. Rajiv Agarwal, CEO & Managing Director

(ii) Mr. Kamla Kant Sinha, CEO (w.e.f. July 4, 2011)

(iii) Mr. Shailesh Sawa, Director Finance (w.e.f. July 24, 2010)



(iv) Mr. A. R. Ramakrishnan, Whole-time Director (upto May 22, 2011)

(v) Mr. V. Ashok, Whole-time Director (upto May 24, 2010)

(vi) Mr. Sanjay Mehta, Managing Director (upto July 24, 2010)

d) Fellow subsidiaries / other related parties / affiliate where there have been transactions:

(i) Aegis Limited

(ii) Arkay Holdings Limited

(iii) Imperial Consultants & Securities Pvt. Ltd.

(iv) Essar Africa Holdings Limited (formerly known as India Securities Holdings Limited)

(v) Essar Agrotech Limited

(vi) Essar Bulk Terminal Paradip Limited (till March 31, 2011)

(vii) Essar Energy Holdings Limited

(viii) Essar House Limited

(ix) Essar Infrastructure Services Limited

(x) Essar Information Technology Limited

(xi) Essar Investments Limited

(xii) Essar Logistics Limited (from October 1, 2010)

(xiii) Essar Oil Limited

(xiv) Essar Oilfields Services Limited (w.e.f. October 1, 2010)

(xv) Essar Oilfield Services India Limited (w.e.f. October 1, 2010)

(xvi) Essar Shipping Limited (w.e.f. October 1, 2010)

(xvii) Essar Steel India Limited (formerly known as Essar Steel Limited)

(xviii) Essar Steel Hazira Limited

(xix) Futura Travels Limited

The details of transactions with related parties during the year ended March 31, 2012

(Rs. in lakhs)

Nature of transactionsHolding and subsidiary

companies Other related parties

Key management

personnel Total

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

INCOME

Fleet operating income

Essar Bulk Terminal Limited 1,411.20 – – – – – 1,411.20 –

Essar Steel India Limited – – – 27,081.00 – – – 27,081.00

Essar Shipping & Logistics Limited – 168.00 – – – – – 168.00

Essar Logistics Limited – 870.00 – – – – – 870.00

Vadinar Oil Terminal Limited 1,086.30 1,807.00 – – – – 1,086.30 1,807.00

Essar Bulk Terminal (Salaya) Limited 252.00 – – – – – 252.00 –

Essar Oil Limited – – – 569.00 – – – 569.00

Total 2,749.50 2,845.00 – 27,650.00 – – 2,749.50 30,495.00

Other income

Vadinar Oil Terminal Limited 102.00 – – – – – 102.00 –

Vadinar Ports & Terminals Limited 399.00 – – – – – 399.00 –

Essar Bulk Terminal Limited 399.00 – – – – – 399.00 –

Essar Bulk Terminal Paradip Limited 102.00 – – – – – 102.00 –


Essar Africa Holdings Limited – – 798.04 – – – 798.04 –

Total 1,200.00 – 798.04 – – – 1,998.04 –

71



(Rs. in lakhs)



Key management

personnel Total

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Equipment lease rental income

Essar Steel India Limited – – – 1.00 – – – 1.00

Total – – – 1.00 – – – 1.00

Interest income on debentures

Imperial Consultants & Securities Pvt.

Limited – – – 1,740.00 – – – 1,740.00

Total – – – 1,740.00 – – – 1,740.00

Interest income

Essar Investment Limited – – – 1,278.00 – – – 1,278.00


Essar Oilfield Services India Limited – 2,551.00 – – – – – 2,551.00

Essar Oilfields Services Limited – 127.00 – – – – – 127.00

Essar Bulk Terminal Paradip Limited – 84.00 – – – – – 84.00

Essar Bulk Terminal (Salaya) Limited – 32.00 – – – – – 32.00

Essar Bulk Terminal Limited – 117.00 – – – – – 117.00

Total – 3,701.00 – 1,278.00 – – – 4,979.00

Remuneration*

Sanjay Mehta – – – – 23.00 – 23.00

A. R. Ramakrishnan – – – – 15.86 139.00 15.86 139.00

Rajiv Agarwal – – – – 215.87 92.00 215.87 92.00

Kamla Kant Sinha – – – – 72.24 – 72.24 –

Shailesh Sawa – – – – 113.61 97.00 113.61 97.00

V. Ashok – – – – – 15.00 – 15.00

Total – – – – 417.58 366.00 417.58 366.00

Direct Voyage Expenses

Essar Bulk Terminal Limited 70.00 606.00 – – – – 70.00 606.00

Total 70.00 606.00 – – – – 70.00 606.00

Hire charges

Essar Shipping & Logistics Limited – 2,224.00 – – – – – 2,224.00

Essar Shipping Limited – – 96.66 – – – 96.66 –

Total – 2,224.00 96.66 – – – 96.66 2,224.00

Manning charges

Essar Infrastructure Services Limited – – – 8.00 – – – 8.00


Total 140.00 – – 8.00 – – 140.00 8.00

Business center fees


Essar House Limited – – – 66.00 – – – 66.00

Total – – – 282.00 – – – 282.00

Repair and maintenance

Essar Agrotech Limited – – – 5.00 – – – 5.00


Total – – – 27.00 – – – 27.00

Traveling expenses

Futura Travels Limited – – 39.75 141.00 – – 39.75 141.00

Total – – 39.75 141.00 – – 39.75 141.00

Reimbursement of expenses

Essar Oilfields Services Limited – – – 26.00 – – – 26.00

Futura Travels Limited – – – 202.00 – – – 202.00

Essar Logistics Limited – – – 761.00 – – – 761.00

Total – – – 989.00 – – – 989.00



(Rs. in lakhs)



Key management

personnel Total

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Aircraft usage charges

reimbursement


Total – – – 900.00 – – – 900.00

Professional / Advisory fees /

Agency Fees


India Securities Limited – – – 6.00 – – – 6.00

Essar Investment Limited – – – 506.00 – – – 506.00

Essar Information Technology Limited – – – 11.00 – – – 11.00


Essar Bulk Terminal Limited 319.00 – – – – – – –

Vadinar Oil Terminal Limited 221.67 – – – – – – –

Vadinar Ports & Terminals Limited 49.07 – – – – – – –

Total 589.75 – 31.51 535.00 – – 31.51 535.00

Interest on loan (ICD)

Vadinar Ports & Terminals Limited 438.70 128.00 – – – – 438.70 128.00

Total 438.70 128.00 – – – – 438.70 128.00

Interest on others

Essar Logistics Limited – – 280.55 – – – 280.55 –

Total – – 280.55 – – – 280.55 –

Interest on lease loan


Total – 1,782.00 – – – – – 1,782.00

Sale of investments

Essar Energy Holdings Limited – – – 5,486.00 – – – 5,486.00

Total – – – 5,486.00 – – – 5,486.00

Sale of preference shares


Total 4.88 – – – – – 4.88 –

Advance for allotment of

preference / equity shares

Essar Oilfield Services India Limited – – – 142,331.00 – – – 142,331.00

Vadinar Ports & Terminals Limited – 2,400.00 – – – – – 2,400.00

Essar Bulk Terminal (Salaya) Limited – 8,125.00 – – – – – 8,125.00

Essar Paradip Terminals Limited 100.00 525.00 – – – – 100.00 525.00

Essar Bulk Terminal Paradip Limited – 9,050.00 – – – – – 9,050.00

Essar Investments Limited – – – 10,076.00 – – – 10,076.00

Total 100.00 20,100.00 – 152,407.00 – – 100.00 172,507.00

Acquisition of assets

Essar Logistics Limited – – 5,002.50 – – – 5,002.50 –

Total – – 5,002.50 – – – 5,002.50 –

Purchase of preference shares

Essar Bulk Terminal Limited – 10,076.00 – – – – – 10,076.00

Essar Bulk Terminal Paradip Limited 4,950.00 6,600.00 – – – – 4,950.00 6,600.00

Essar Bulk Terminal (Salaya) Limited 7,807.36 3,118.00 – – – – 7,807.36 3,118.00

Essar Paradip Terminals Limited 900.75 – – – – – 900.75 –

Essar Steel India Limited 18,587.80 – – – – – 18,587.80 –

Total 32,245.91 19,794.00 – – – – 32,245.91 19,794.00

73



(Rs. in lakhs)



Key management

personnel Total

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Purchase of equity shares

Vadinar Ports & Terminals Limited 2,400.00 – – – – – 2,400.00 –


Essar Paradip Terminals Limited – 4.00 – – – – – 4.00

Total 2,400.00 6.00 – – – – 2,400.00 6.00

Loans and advances given


Essar Bulk Terminal (Salaya) Limited – 40.00 – – – – – 40.00


Essar Oilfield Services India Limited – – – 100.00 – – – 100.00

Essar Oilfields Services Limited – – – 1,381.00 – – – 1,381.00

Total – 875.00 – 1,481.00 – – – 2,356.00

Security deposit received


Vadinar Oil Terminal Limited – 150.00 – – – – – 150.00

Vadinar Ports & Terminals Limited – 150.00 – – – – – 150.00


Total – 450.00 – 650.00 – – – 1,100.00

Loans and advances received



Total – 3,500.00 – 10,000.00 – – – 13,500.00

Advance received from customer





Total 11,928.55 2,589.36 – – – – 11,928.55 2,589.36

Guarantees given by others on

behalf of Company


Total – 30,000.00 – – – – – 30,000.00

Guarantee on behalf of others

Vadinar Oil Terminal Limited 1,600.00 – – – – – 1,600.00 –


Essar Bulk Terminal Limited 17,500.00 25,000.00 – – – – 17,500.00 25,000.00

Essar Paradip Terminals Limited – 46,700.00 – – – – – 46,700.00


Total 19,100.00 126,200.00 – – – – 19,100.00 126,200.00



OUTSTANDING BALANCES AS AT MARCH 31, 2012

(Rs. in lakhs)

Nature of balances Holding and subsidiary


Key management

personnel Total

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

Other current assets



Total 51.26 – 798.04 – – – 849.30 –

Advance towards purchase of

preference shares


Essar Bulk Terminal (Salaya) Limited – 5,007.00 – – – – – 5,007.00

Essar Paradip Terminals Limited 100.00 525.00 – – – – 100.00 525.00


Total 100.00 10,382.00 – – – – 100.00 10,382.00

Advance received from customers





Total 15,346.98 3,418.00 – – – – 15,346.98 3,418.00

Loans and advances received

Vadinar Ports & Terminals Limited 3,500.00 3,500.00 – – – – 3,500.00 3,500.00

Total 3,500.00 3,500.00 – – – – 3,500.00 3,500.00

Investments

Essar Bulk Terminal Limited 202,360.31 – – – – – 202,360.31 –



Essar Bulk Terminal (Salaya) Limited 20,678.24 – – – – – 20,678.24 –

Essar Bulk Terminal Paradip Limited 11,550.01 – – – – – 11,550.01 –

Essar Paradip Terminals Limited 904.50 – – – – – 904.50 –

Total 365,941.93 – – – – – 365,941.93 –

Trade payables and other current

liabilities

Futura Travels Limited – – 11.96 – – – 11.96 –

Aegis Limited – – 1.62 – – – 1.62 –

Arkay Holdings Limited – – 0.14 – – – 0.14 –

Essar Shipping Limited – – 1,436.07 1,546.00 – – 1,436.07 1,546.00


Essar Steel India Limited – – 18,604.47 – – – 18,604.47 –




Total 589.75 – 24,622.78 1,546.00 – – 25,212.53 1,546.00

Interest accrued but not due on

loan

Vadinar Ports & Terminals Limited 510.10 115.00 – – – – 510.10 115.00

Total 510.10 115.00 – – – – 510.10 115.00

75



(Rs. in lakhs)

Nature of balances Holding and subsidiary


Key management

personnel Total

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011


behalf of Company

Essar Shipping & Logistics Limited 30,000.00 30,000.00 – – – – 30,000.00 30,000.00

Total 30,000.00 30,000.00 – – – – 30,000.00 30,000.00

Guarantees given on behalf of

others



Essar Bulk Terminal (Salaya) Limited 60,460.00 67,960.00 – – – – 60,460.00 67,960.00

Essar Bulk Terminal Limited 17,500.00 37,370.00 – – – – 17,500.00 37,370.00


Essar Paradip Terminals Limited 46,700.00 46,700.00 – – – – 46,700.00 46,700.00

Essar Bulk Terminal Paradip Limited 41,000.00 44,000.00 – – – – 41,000.00 44,000.00

Total 202,760.00 246,530.00 – – – – 202,760.00 246,530.00

33 The Company has not received any intimation from the suppliers regarding their status under Micro, Small and Medium

Enterprises Development Act, 2006 (the Act) and hence the disclosures required by the Act have not been made. The

Company is making efforts to get confirmations from the suppliers as regards their status under the Act.

34 In view of exemption from Central Government obtained by the Company under section 211(4) of the Companies Act,

1956 vide order number 46/60/2011-CL-III dated 15.02.2011, information required under sub-clauses (a), (b), (c) and (e)

of paragraph 4-D of part II of schedule VI to the Companies Act, 1956, is not given.

35 The Current year figures are not comparable with the previous year figures as the figures for the previous year includes

the operations of the shipping business up to September 30, 2010 before it was demerged into Essar Shipping Limited

pursuant to the Composite Scheme of Arrangement with effect from the appointed date of October 1, 2010.

36 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification

as per the requirement of the Revised Schedule VI notified under the Companies Act, 1956.

For and on behalf of the Board of Directors





Mumbai

May 30, 2012








Mumbai

May 30, 2012

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES

PARTICULARS Vadinar Oil

Terminal

Limited

Vadinar

Essar

Bulk Terminal

Limited

Hazira

Essar

Bulk Terminal

(Salaya)

Limited

Mumbai

Essar

Bulk Terminal

Paradip

Limited

Ahmedabad

Essar

Paradip

Terminals

Limited

Mumbai

Vadinar Ports

& Terminals

Limited

Vadinar

1 The relevant financial year of the subsidiary ended on 31.03.12 31.03.12 31.03.12 31.03.12 31.03.12 31.03.12

2 No. of shares in the subsidiary company held by Essar

Ports Limited as on March 31, 2012

1,04,61,42,000 37,00,000 30,04,875 47,500 45,000 27,01,34,457

3 Extent of holding by Essar Ports Limited as at the end

of the financial period

100.00% 74.00% 100.00% 70.30% 90.00% 100.00%

4 The net aggregate amount of the subsidiary

companies profit / (loss) so far as it concerns the

members of the holding company.

a) Not dealt with in the holding company’s accounts:

i) For the financial year ended March 31, 2012 (Rs. 54,45,22,114) Rs. 1,17,52,26,044 (Rs. 36,77,324) (Rs. 13,70,764) (Rs. 2,94,775) Rs. 38,19,95,463

ii) For the previous financial years of the subsidiary

companies since they became the holding

company’s subsidiaries

(Rs. 3,04,61,77,036) Rs. 38,44,24,086 (Rs. 16,67,839) (Rs. 4,33,217) (Rs. 3,97,628) (Rs. 8,10,000)

b) Dealt with in holding company’s accounts:

i) For the financial year ended March 31, 2012 NIL NIL NIL NIL NIL NIL

ii) For the previous financial years of the subsidiary

companies since they became the holding

company’s subsidiaries

NIL NIL NIL NIL NIL NIL

5 Change of interest of Essar Ports Limited in the

subsidiary between the end of the financial year of

subsidiary and that of Essar Ports Limited


6 Material changes between the end of the financial year

of the subsidiary and the end of the financial year of

Essar Ports Limited in respect of :

a) Fixed Assets NIL NIL NIL NIL NIL NIL

b) Investments NIL NIL NIL NIL NIL NIL

c) Money lent by the subsidiary NIL NIL NIL NIL NIL NIL

d) Money borrowed by the subsidiary company

other than for meeting current liabilities (net)


Note:

i) Essar ports Limited holds 29.12% in Vadinar Ports & Terminals Limited directly and holds 70.88% through Vadinar Oil Terminal Limited, a 100% subsidiary of Essar Ports Limited.

ii) Essar Ports Limited holds 95% in Essar Bulk Terminal Paradip Limited through Essar Bulk Terminal Limited, a 74% subsidiary of Essar Ports Limited.

77


TO THE BOARD OF DIRECTORS OF

ESSAR PORTS LIMITED

(formerly known as Essar Shipping Ports & Logistics

Limited)

1. We have audited the attached Consolidated Balance

Sheet of ESSAR PORTS LIMITED (formerly known

as Essar Shipping Ports & Logistics Limited) (“the

Company”) and its subsidiaries (the Company and its

subsidiaries constitute “the Group”) as at 31st March,

2012, the Consolidated Statement of Profit and Loss

and the Consolidated Cash Flow Statement of the Group

for the year ended on that date, both annexed thereto.

These financial statements are the responsibility of the

Company’s Management and have been prepared on

the basis of the separate financial statements and other

information regarding components. Our responsibility is

to express an opinion on these Consolidated Financial

Statements based on our audit.

2. We conducted our audit in accordance with the

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 misstatements.

An audit includes examining, on a test basis, evidence

supporting the amounts and the disclosures in the

financial statements. An audit also includes assessing

the accounting principles used and the 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. We report that the Consolidated Financial Statements

have been prepared by the Company in accordance

with the requirements of Accounting Standard 21 –

Consolidated Financial Statements, as notified under

the Companies (Accounting Standards) Rules, 2006.

4. Attention is invited to Note 5 of the financial statements

dealing with the recognition and measurement of the

borrowings covered by the Corporate Debt Restructuring

Scheme (“the CDR”) as per the accounting policy

consistently followed by the Company in the absence

of specific guidance available under the Accounting

Standards referred to in sub-section (3C) of section

211 of the Companies Act, 1956 in consideration of the

CDR.

5. Based on our audit and on consideration of the separate

audit reports on the individual financial statements

of the Company and its subsidiaries, and to the best

of our information and according to the explanations

given to us, in our opinion, the Consolidated Financial

Statements give a true and fair view in conformity with

the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance Sheet, of

the state of affairs of the Group as at 31st March,

2012;

(ii) in the case of the Consolidated the Statement of

Profit and Loss, of the profit of the Group for the

year ended on that date; and

(iii) in the case of the Consolidated Cash Flow

Statement, of the cash flows of the Group for the

year ended on that date.



(Firm Reg. No. 117365W)

Khurshed Pastakia

Partner


Mumbai

May 30, 2012

Consolidated Auditors’ Report


(Rs. in lakhs)

Particulars Note No. As at

March 31, 2012

As at

March 31, 2011



(a) Share capital 3 41,058.61 41,058.61


220,233.61 216,261.72

2 Minority interest 6,444.09 8,129.03



(b) Deferred tax liabilities (net) 6 4,337.29 15.89

(c) Other long term liabilities 7 24,622.76 49,476.94


525,854.82 473,753.32



(b) Trade payables 10 7,708.09 3,566.27



120,266.78 45,141.63

Total 872,799.30 743,285.70

II. ASSETS


(a) Fixed assets

(i) Tangible assets 12 412,442.60 321,847.47

(ii) Intangible assets 12 10.11 13.52

(iii) Capital work-in-progress 13 213,506.17 186,156.07

(b) Goodwill on consolidation 161,324.95 146,113.25

(c) Non-current investments 14 104.51 104.51

(d) Deferred tax assets (net) 6 12,549.05 –

(e) Loans and advances 15 28,168.50 37,640.90

(f) Other non-current assets 16 3,038.48 104.39

831,144.37 691,980.11

2 Current assets

(a) Current investments 14 0.54 –

(b) Inventories 17 688.58 2,256.60

(c) Trade receivables 16 15,855.56 8,318.06

(d) Cash and bank balance 18 2,749.87 15,692.42

(e) Loans and advances 15 19,316.34 23,971.04

(f) Other current assets 16 3,044.04 1,067.47

41,654.93 51,305.59

Total 872,799.30 743,285.70









Mumbai Mumbai

May 30, 2012 May 30, 2012

Consolidated Balance Sheet as at March 31, 2012

79


(Rs. in lakhs)

Particulars Note No. For the year ended

March 31, 2012

For the year ended

March 31, 2011

REVENUE FROM OPERATIONS 19 110,880.69 191,069.74

Other income 20 2,225.70 17,542.52

Total Revenue 113,106.39 208,612.26

EXPENSES:

Employee benefits expense 21 2,198.66 11,344.12

Operating expenses 22 17,562.42 101,992.05

Establishment and other expenses 23 2,024.05 4,073.51

Total 21,785.13 117,409.68

Profit before exceptional items, extraordinary items,

finance cost, tax, depreciation and amortisation 91,321.26 91,202.58

Finance costs 24 42,080.84 47,375.30

Profit before exceptional items, extraordinary items, tax,

depreciation and amortisation 49,240.42 43,827.29

Depreciation and amortisation expense 12 22,024.56 32,083.32

Profit before exceptional item 27,215.86 11,743.97

Exceptional item (refer note no. 5 (C) (iv) ) (23,551.18) –

Profit after exceptional item and before tax 3,664.68 11,743.97

Tax expenses:

Current tax (including MAT) 5,286.56 3,492.23

MAT credit availed (3,331.36) (200.00)

Deferred tax (credit) / charge (8,227.64) 181.58

Tax adjustment for earlier years 52.90 (13.97)

Profit for the year after tax 9,884.22 8,284.13

Less: Share of minority interest (profit) (3,488.75) (1,268.96)

Profit for the year 6,395.47 7,015.17

Earnings per share: ( face value Rs. 10/- each ) 30

(1) Basic 1.56 1.71

(2) Diluted 1.50 1.66









Mumbai Mumbai

May 30, 2012 May 30, 2012

Consolidated Statement of Profit & Loss for the year ended March 31, 2012


(Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

A CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax & exceptional Item 27,215.86 11,743.97

Adjustments for :

Depreciation / amortisation / impairment 22,024.56 32,083.32

Finance cost 42,080.84 47,375.30

Interest income (900.81) (7,112.07)

Profit on sale of assets (4.85) (3,011.46)

Profit on sale of long term investment (3.04) (5,259.81)

Profit on sale of current investments (335.02) (161.96)

Dividend on investments – (108.84)

Excess provision of earlier year written back (12.39) (80.61)

Foreign exchange difference loss / (gain) (1.46) (1,495.32)

Operating profit before working capital changes 90,063.69 73,972.52

Adjustments for:

Trade and other receivables (7,751.19) 7,703.20

Inventories (72.10) (552.51)

Trade and other payables (6,249.29) 9,666.59


Income taxes refund / (paid) net (4,626.36) (4,855.98)

Net cash flow from operating activities 71,364.75 85,933.82

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets including capital work in progress / advance (73,536.10) (128,287.75)

Proceeds from sale of fixed assets – 4,755.61

Purchase of current investments (54,075.53) (154,556.88)

Proceeds from sale of current investments 54,458.85 164,137.84

Proceeds from sale of non-current investments – 37,044.59

Proceeds from sale of investments in subsidiaries 3.04 –

Fixed deposits matured / (placed) with maturity period of more than

three months, (net)

6,102.54 (9,107.99)

Loans and advances repaid by subsidiaries and other body corporates – 46,886.80

Dividend on investments – 1,848.90


Purchase of preference shares from minority (5.90) (10,060.87)

Net cash used for investing activities (66,136.70) (41,409.05)

Consolidated Cash Flow Statement for the year ended March 31, 2012

81


(Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

C CASH FLOW FROM FINANCING ACTIVITIES


Refund of share application money (1,791.70) –

Proceeds from debentures – 130,964.40

Proceeds from secured loans 84,294.91 166,074.17

Proceeds from commercial papers – 16,000.00

Bills accepted during the year 34,884.76 57,499.10

Bills repaid during the year (59,009.15) (56,626.71)

Proceeds from unsecured loans – 79,081.53

Repayment of secured loans (18,271.81) (162,202.68)

Redemption of preference share – (116,461.00)

Repayment of finance lease obligations – (4,131.99)

Repayment of commercial papers – (16,000.00)

Repayment of unsecured loan (23,700.00) (77,007.26)

Net cash flow from / (used in) financing activities (12,068.06) (18,501.07)

INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (6,840.01) 26,023.70

Cash and cash equivalents given on demerger – (33,617.28)


Cash and cash equivalents at end of the year (refer note 18 (A) ) 1,615.41 8,455.42

Notes :

1 The above cash flow statement excludes assets / liabilities (other than cash balance) on merger from Essar International

Limited and Essar Ports & Terminals Limited and transfer to Essar Shipping Limited on demerger, as it is non cash

transaction (refer note 26).

2 Non Cash Transaction

During the year, the Company has converted inventory of Rs. 1,640.12 lakhs to capital assets.

3 Cash flow statement has been prepared under the indirect method as set out in Accounting Standards 3 - “Cash flow

statement” referred to in Section 211(3C) of the Companies Act, 1956.


Consolidated Cash Flow Statement for the year ended March 31, 2012








Mumbai Mumbai

May 30, 2012 May 30, 2012



1. COMPANY PROFILE

Essar Ports Limited (the Company/EPL) develops and

operates ports and terminals and is one of the largest

private sector port company in India. EPL is India’s

second-largest, private-sector port and terminals

company by capacity and throughput.

EPL is part of the multinational Essar Group and holds

the Group’s entire ports business. It is listed on the

BSE Limited and the National Stock Exchange of India

Limited (NSE). The Company, which was previously

named Essar Shipping Ports & Logistics Limited

(ESPLL), recently went through a demerger process,

following which the shipping, logistics and oilfield drilling

businesses were demerged from ESPLL and transferred

to another company, Essar Shipping Limited, which is

also listed on Indian stock exchanges.

EPL through its subsidiaries develops and operates

ports and terminals for handling liquid, dry bulk, break

bulk and general cargo, with an existing aggregate

capacity of 88 MTPA across two facilities located at

Vadinar and Hazira in the state of Gujarat on the west

coast of India.

The facilities at Vadinar and Hazira are used primarily

by affiliated customers for the receipt of raw materials

such as crude oil, iron ore / pellets, limestone, dolomite

and coal, and for the dispatch of finished goods such

as petroleum products and steel products.

EPL is in the process of increasing its aggregate ports

capacity to 158 MTPA with expansion projects at

Vadinar and Hazira, a new port at Salaya in Gujarat and

two terminals at Paradip in the state of Odhisa on the

east coast of India. The ports expansion projects have

been undertaken, in part, to accommodate the increase

in traffic expected to arise from plant expansions

planned to be carried out by the Company’s affiliated

customers, and in part to support the increase in

business from non-affiliated customers being targeted

by the Company.

2. SIGNIFICANT ACCOUNTING POLICIES:

a) Basis Of Accounting

These financial statements are prepared under

the historical cost convention, except for the

revaluation of fleet, on accrual basis of accounting

and are in accordance with generally accepted

accounting principles and in compliance with the

applicable Accounting Standards (AS) referred

to in sub-section (3C) of Section 211 of the


b) Use Of Estimates

The preparation of financial statements in

conformity with the generally accepted accounting

principles requires estimates and assumptions

to be made that affect the reported balances of

assets and liabilities and disclosures relating to

contingent liabilities as at the reporting date and

the reported amounts of income and expenses

during the reporting period. Differences between

the actual results and estimates are recognised

in the period in which the results are known /

materialised.

c) Basis of Consolidation

a) The financial statements of Essar Ports Limited

(formerly known as Essar Shipping Ports

& Logistics Limited) (the Company) and its

subsidiaries (together “Group”) are combined

on a line-by-line basis by adding together the

book values of like items of assets, liabilities,

income and expenses, after eliminating all

material intra-group balances and intra-

group transactions in accordance with AS-

21 “Consolidated Financial Statements”.

b) The difference between the costs of

investment in the subsidiaries, over the net

assets at the time of acquisition of shares in

the subsidiaries is recognised in the financial

statements as goodwill or capital reserve, as

the case may be.

c) The minority’s share in the net profit of the

consolidated subsidiaries for the year is

identified and adjusted against the income of

the Group in order to arrive at the net income

attributable to shareholders of the Company.

d) The minority’s share in the net assets of the

consolidated subsidiaries is identified and

presented in the Consolidated Balance

Sheet separate from liabilities and equity of

the Company’s shareholders.

e) The consolidated financial statements are

prepared using uniform accounting policies

for like transactions and other events in

similar circumstances and where divergent,

appropriate adjustments are made.

d) Fixed Assets

a) Fixed assets are recorded at cost of

acquisition or at revalued amounts less

accumulated depreciation and impairment

loss, if any.

Cost of acquisition of fleet includes

brokerage, start up costs and cost of major

improvements / upgradation.

Cost of acquisition is inclusive of cost of

construction including erection, installation

and commissioning expenses, expenditure

during construction, inseparable know–how

costs, gains or losses earned / incurred

during the trial run, non refundable duties and

taxes, borrowing costs and other incidental

costs, where applicable.

b) Assets acquired on hire purchase, being in

the nature of finance lease, are capitalised as

83



fixed assets at lower of fair value at inception

of the lease and the present value of minimum

lease payments and corresponding liability is

recognised. The lease rentals paid (excluding

operating expenses) are bifurcated into

principal and interest components by

applying an implicit rate of return. The interest

is charged against income as a period cost

and the principal amount is adjusted against

the liability recognised in respect of assets

taken on finance lease.

c) Foreign exchange differences on conversion /

translation / settlement in respect of long term

monetary items used for acquisition of

depreciable fixed assets are added to the

cost of fixed assets.

e) Intangible Assets

Intangible assets are recognised only when it is

probable that future economic benefits attributable

to the asset will flow to the Group and the cost of

such assets can be measured reliably. Intangible

assets are stated at cost less accumulated

amortisation and impairment loss, if any. All

costs relating to the acquisition are capitalised.

Intangible assets are amortised over the useful life

of the asset, subject to a rebuttable presumption

that such useful lives will not exceed ten years.

f) Capital Work-In-Progress, Expenditure During

Construction And Capital Advances

Direct expenditure on projects or assets under

construction or development is shown under

capital work in progress.

Expenditure incidental to the construction of the

projects or assets that take substantial period

of time to get ready for their intended use is

accumulated as expenditure during construction

pending allocation to fixed assets and other

accounts, as applicable, on completion of

construction.

g) Depreciation

Depreciation for fleet including second hand fleet and rigs are provided by using the straight-line method based on

a technical evaluation of the economic useful life of respective assets or at the rates prescribed under Schedule XIV

to the Companies Act, 1956, whichever is higher as follows:

Class of assets Method of depreciation Estimated useful life

Fleet

- tankers SLM over balance useful life or 5% whichever is higher 14 - 25 years

- bulk carriers 3 - 26 years

- mini bulk carriers 20 years

- tugs and barges SLM over balance useful life or 7% whichever is higher 20 years

- dredgers 14 years

Rigs

- semi submersible rig SLM over balance useful life or 4.75% whichever is higher 15 years

- land rig 10 years

Plant & Machinery SLM over balance useful life or 4.75% whichever is higher 20 years

a) Depreciation on water circulation treatment

plant, aircraft, forklifts, cranes, impact

hammer, turning plates, clamps, pipelines,

vehicles (other than motor car and two

wheelers), tankages and other heavy plant

and machinery and building is provided on

straight line method at the rate prescribed in

Schedule XIV to the Companies Act, 1956.

b) All other assets are depreciated by using the

written down value method at the rates and

in the manner prescribed in Schedule XIV to

the Companies Act, 1956. Assets costing less

than Rs. 5,000/- are depreciated at 100% in

the year of acquisition.

c) Depreciation on the incremental value of

fixed assets upon revaluation is recouped

proportionately from fixed assets revaluation

reserve.

d) Depreciation on additions / deductions to

fixed assets made during the year is provided

on a pro-rata basis from / up to the date of

such additions / deductions, as the case may

be.

e) Profit or loss on disposal of revalued fixed

assets is recognised with reference to their

revalued carrying values. The balance, if any, in

the fixed assets revaluation reserve relating to

revalued fixed assets that are sold / disposed

is transferred to general reserve.

f) Depreciation on addition of assets due to

exchange variation is provided over the

remaining useful life of the asset.



g) Assets that are to be handed over to Kandla

Port Trust and Gujarat Maritime Board are

depreciated over a concession period or

rates prescribed under Schedule XIV of the

Companies Act, 1956 whichever is higher.

h) Impairment Of Assets

The Group assesses on each balance sheet date

whether there is any indication that an asset may

be impaired. If any such indication exists, the Group

estimates the recoverable amount of the asset. If

such recoverable amount of the asset is less than

its carrying amount, the carrying amount is reduced

to its recoverable amount. The amount so reduced

is treated as an impairment loss and is recognised

in the Statement of Profit and Loss, except in case

of revalued assets, where it is first adjusted against

the related balance in fixed assets revaluation

reserve.

If at the balance sheet date, there is an indication

that a previously assessed impairment loss no

longer exists, the recoverable amount is reassessed

and the asset is carried at the recoverable amount

subject to a maximum of depreciated historical

cost, except for revalued assets which are subject

to a maximum of depreciated revalued cost.

i) Borrowing Costs

Borrowing costs that are directly attributable to

the acquisition, construction / development of

qualifying asset are capitalised as a part of cost of

such asset. A qualifying asset is one that necessarily

takes substantial period of time to get ready for the

intended use.

Costs in connection with the borrowing of funds

to the extent not directly related to the acquisition

of fixed assets are amortised and charged to the

Statement of Profit and Loss, over the tenure of

the loan.

j) Investments

a) Long term investments are carried at cost less

provision for other than temporary diminution,

in the fair / market value of these investments.

b) Current investments are carried at the lower of

cost and fair / market value.

k) Inventory

Inventory is valued at the lower of cost and net

realisable value. Cost is determined on first-in first-

out basis.

l) Revenue Recognition

a) Operating and chartering earnings represent

the value of charter hire earnings, demurrage,

freight earnings, fleet management fees,

road freight income and stevedoring and

lighterage earnings and are accounted on

accrual basis.

Freight earnings, stevedoring and lighterage

are recognised on a pro-rata basis for

voyages in progress at balance sheet date

after loading / unloading of the cargo is

completed; revenues and related expenses for

voyages where cargo has not been loaded /

unloaded as on the balance sheet date are

deferred and recognised in the following year.

b) Revenue on sale of products is recognised

when the seller has transferred to buyer the

property in the goods for a price or when all

significant risks and rewards of ownership

have been transferred to the buyer and the

seller retains no effective control of the goods

transferred to a degree usually associated

with ownership and no significant uncertainty

exists regarding the amount of consideration

that will be derived from the sale of goods.

c) Revenue on transactions of rendering

services is recognised either under the

completed service contract method or under

the proportionate completion method, as

appropriate. Performance is regarded as

achieved when no significant uncertainty

exists regarding the amount of consideration

that will be derived from rendering the

services.

d) Interest income is recognised using the

time proportion method based on the rates

implicit in the transactions.

e) Insurance claims are recorded based on

reasonable certainty of their settlement.

f) Other income is recognised on accrual basis.

m) Dividend Income

Dividend income is recognised when the right to

receive the payment is established by the balance

sheet date.

n) Operating Expenses

All expenses relating to road freight, intercarting

and the operation of fleet, including crewing,

insurance, stores, bunkers, charter hire, special

survey costs and other expenses are expensed

under operating expenses on accrual basis.

Dry-docking expenses are recognised under

operating expenses in the period to which it

relates.

o) Operating Lease

Rentals are expensed with reference to the terms

of the lease agreement and other considerations

in respect of operating leases.

p) Employee Benefits



employees’ salary - currently 12%, to the

85



employer established provident fund “Essar

Staff Provident Fund” set up as an irrevocable

trust by the Company. The Company is

generally liable for annual contributions and

any shortfall in the fund assets based on

government specified minimum rates of

return – currently @ 9.5%, and recognises

such provident fund liability, considering fund

as the defined benefit plan, based on an

independent actuarial valuation carried out at


b) Provision for gratuity for floating staff is made

as under:

i) For officers on actuarial valuation.

ii) For crew on accrual basis as per rules

of the National Maritime Board and is

charged to the Statement of Profit and

Loss.

Contribution in respect of gratuity for onshore

staff is made to Life Insurance Corporation

of India based on demands made. The

Company also accounts for gratuity liability

based on an independent actuary valuation

carried out at every statutory year end.

c) Contribution for superannuation, funded

by payments to Life Insurance Corporation

of India, is a fixed percentage of the salary

of eligible employees under a defined

contribution plan is charged to the Statement

of Profit and Loss / expenditure during

construction as applicable.

d) Provision for all accumulated compensated

absences of eligible employees is made

based on independent actuarial valuation.

e) The Company has formulated Employee

Stock Option Scheme (ESOS) in accordance

with Securities and Exchange Board of

India (Employee Stock Option Scheme)

Guidelines, 1999. The Scheme provide for

grant of Options to employees of the Group

to acquire the equity shares of the Company

that vest in a graded manner and that are to

be exercised within a specified period.

In accordance with the SEBI Guidelines

and the guidance note on “Accounting for

Employee Share Based Payments” notified

under the Companies (Accounting Standard)

Rules, 2006, the excess, if any, of the market

price of the share preceding the date of grant

of the option under ESOS over the exercise

price of the option is amortised on a straight-

line basis over the vesting period.

q) Foreign Currency Transactions

Transactions denominated in foreign currencies are

recorded at standard exchange rates determined

monthly which approximates the actual rate on the

date of transaction. The difference between the

standard rate and the actual rate of settlement is

accounted in the Statement of Profit and Loss.

Monetary items denominated in foreign currency

are translated at the rate prevailing at the end of

the year. Gains / losses arising on conversion /

translation / settlement of foreign currency

transactions are recognised in the Statement of

Profit and Loss. Gains / losses on conversion /

translation / settlement of long term foreign

currency monetary items related to acquisition of

a depreciable fixed asset added to or deducted

from the cost of the assets and are depreciated

over the balance life of the asset.

FCMITDA

Gains / losses arising on conversion / translation /

settlement of long term foreign currency items

other than those relating to acquisition of

depreciable assets are accumulated in a “Foreign

Currency Monetary Item Translation Difference

Account” and amortised over the balance period

of such long term foreign currency item but not

beyond accounting period ending on or before

March 31, 2020.

On consolidation, the assets and liabilities of the

Group’s overseas operations are translated at

exchange rates ruling on the balance sheet date.

Income and expense items are translated at the

average exchange rates for the year. The resultant

exchange differences are classified as foreign

currency translation reserve under reserves and

surplus.

The exchange difference arising on account of

investments made during the year in foreign

subsidiaries by holding company compared with

related share capital of subsidiaries is adjusted in

foreign currency translation reserve.

r) Taxation

a) Income tax on income from qualifying fleet

is provided on the basis of the Tonnage

Tax Scheme whereas income tax on non-

tonnage income and fringe benefit tax are

provided as per the other provisions of the

Income Tax Act, 1961. Taxes on income

earned by foreign subsidiaries are provided

based on tax laws of its domicile country.

b) The tax effect of timing differences relating

to non-tonnage tax activities that occur

between taxable income and accounting

income and are capable of reversal in one or

more subsequent periods are recorded as

a deferred tax asset or deferred tax liability.

They are measured using the substantively

enacted tax rates and tax regulations as of

the balance sheet date.



Deferred tax assets arising on account of

brought forward losses and unabsorbed

depreciation under tax laws are recognised,

only if there is a virtual certainty of realisation,

supported by convincing evidence. Deferred

tax assets on account of other timing

differences are recognised to the extent there

is reasonable certainty of realisation.

s) Provisions, Contingent Liabilities And Contingent

Assets

Provisions are recognised for present obligations

arising out of past events if it is probable that an

outflow of economic resources, the amount of

which can be reliably estimated, will be required to

settle the obligation.

Contingent liabilities are disclosed in respect of

possible obligations that arise from past events,

the existence of which will be confirmed by the

occurrence or non occurrence of one or more

uncertain future events not wholly within the

control of the Group, or a present obligation that

is not recognised because a reliable estimate of

the liability cannot be made, or the likelihood of an

outflow of economic resources is remote.

Contingent assets are not recognised in the

financial statements.

t) Segment Accounting Policies:

a) Segment Assets And Segment Liabilities:

Segment assets include all operating assets

used by the segment and consist principally

of fixed assets, inventories, sundry debtors,

cash and bank balances. Segment assets

and liabilities do not include share capital,

reserves and surplus, income tax (both

current and deferred) and unallocable assets

and liabilities.

b) Segment Revenue And Segment Expenses:

Segment revenue and expenses are directly

attributable to the segment. It does not

include interest income on investments, inter-

corporate deposits, interest expense and

provision for taxes.

3 SHARE CAPITAL



(a) Authorised

Equity shares of Rs. 10/- each 1,000,000,000 100,000.00 1,000,000,000 100,000.00

Redeemable cumulative preference

shares of Rs. 100/- each

1,050,000 1,050.00 1,050,000 1,050.00

101,050.00 101,050.00


Equity shares of Rs. 10/- each 410,455,552 41,045.56 410,455,552 41,045.56

Forfeited equity shares 2,464,648 13.05 2,464,648 13.05

41,058.61 41,058.61

(i)Of above 17,18,87,182 (previous year 17,18,87,182) equity shares were allotted as fully paid up equity

shares for consideration other than cash pursuant to scheme of amalgamation during financial year 2008-09.








Less: extinguishment under the scheme

of arrangement – – – –


87




The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible

for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the

shareholders in the ensuing annual general meeting. In the event of liquidation, the equity shareholders are eligible

to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their

shareholding.

(d) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of

the shareholding more than 5% shares in the Company


Number % Number %


Essar Shipping & Logistics Limited, Cyprus,

the holding company

284,503,711 69.31% 340,903,706 83.05%

Essar Global Limited, the ultimate holding

company

66 0.00% 66 0.00%

Essar Projects (India) Limited, subsidiary of

the ultimate holding company

56,396,995 13.74% – 0.00%

Essar Steel India Limited, subsidiary of the

ultimate holding company

2,547,223 0.62% 2,547,223 0.62%

Essar Investments Limited, related party 134,338 0.03% 131,338 0.03%

Imperial Consultants & Securities Private

Limited, related party

4,826 0.00% 4,826 0.00%

343,587,159 83.71% 343,587,159 83.71%

(i) 7,40,334 shares (As at March 31, 2011, NIL shares) of Rs. 71.10 each towards outstanding employee stock

Options granted / available for grant.

(ii) 2,04,75,463 shares (As at March 31, 2011, 2,04,75,463 shares) of Rs. 91.70 each towards 5% Foreign

Currency Convertible Bonds.

4 RESERVES AND SURPLUS (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

a. General reserves


Add: Transfer during the year 1,191.11 –

Add: Transfer from tonnage tax utilised reserve – 15,000.00

Add: Transferred from foreign currency translation reserve – (30,101.49)



b. Capital redemption reserve






4 RESERVES AND SURPLUS (contd...) (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

c. Securities premium account




d. Debenture redemption reserve




e. Revaluation reserve

Opening balance 105.50 11,280.50

Less: Depreciation on enhanced value of fixed assets (11.16) (1,925.00)


Closing balance 94.34 105.50

f. Tonnage tax reserve




g. Tonnage tax utilised reserve




h. Surplus / (deficit) in the statement of profit and loss

Opening balance 142,284.61 136,325.90

Add: Net profit for the current year 6,395.46 7,015.18

Less: Transfer to general reserves (1,191.11) –

Less: Proposed dividends

Equity (2,072.43) –

Preference (0.15) (1,056.47)

Less: Tax on dividend (339.83) –

Net surplus in the statement of profit and loss 145,076.55 142,284.61

Total reserves and surplus 179,175.00 175,203.11

89



5 LONG TERM BORROWINGS (Rs. in lakhs)


Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

A. Secured

(a) Loan from banks

Rupee term loans 62,979.18 69,902.18 6,923.00 6,124.00

Funded interest facilities 121,364.60 95,126.47 1,795.83 1,561.07

Less : Amount not payable if funded interest

is paid on or before March 31, 2012

(41,528.20) (41,772.52) – –

79,836.40 53,353.95 1,795.83 1,561.07

(b) Rupee term loans 213,756.26 145,110.03 7,841.90 4,875.00

(c) From financial institution

Rupee term loans 72,187.85 51,638.97 5,507.70 5,196.65

Funded interest facilities 57,736.06 55,425.93 280.79 515.09

Less : Amount not payable if funded

interest is paid on or before 31.03.2012

(24,607.78) (26,422.53) – –

33,128.28 29,003.40 280.79 515.09

(d) Buyers credit - foreign currency 14,051.75 8,285.99 – –

Total secured loan [A] 475,939.72 357,294.52 22,349.22 18,271.81

B. Unsecured

(a) 5% Foreign currency convertible

bonds

Series - B; US$ 18,571,428

interest bearing bonds due on

August 24, 2017

9,500.49 8,295.86 – –

Series -A ; US$ 21,428,572

interest bearing bonds due on

August 24, 2015

[The above bonds are convertible into

fully-paid ordinary shares of

Rs. 10/- each of the Company at an

initial conversion rate of Rs. 91.70 per

equity share at a fixed exchange rate of

Rs. 46.94]

10,962.11 9,572.14 – –

(b) Rupee term loan from banks – 18,750.00 – 3,750.00

(c) Rupee term loan from financial

institutions

– 30,000.00 30,000.00 –

Total unsecured loan [B] 20,462.60 66,618.00 30,000.00 3,750.00

Total [A + B] 496,402.32 423,912.52 52,349.22 22,021.81


‘other current liabilities’ (refer note 11)

– – (52,349.22) (22,021.81)




C. Notes :

Secured Master Restructuring Agreement (MRA) Rupee

Term loan

(i) Term loans and funded interest facilities from

banks and financial institutions (other than (b)

below) are secured / to be secured by first ranking

security interests on all movable and immovable

assets, present and future, pledge of shares of

the Company held by the promoters and persons

associated with the promoters / Company,

security interest on rights, titles and interests

under each of the project documents, trust and

retention accounts / sub-accounts, insurance

policies related to the terminal project, immovable

properties of Essar Oil Ltd. (EOL) pertaining to

terminal project, guarantee by the promoters and

guarantee of holding company for Rs. 25,000

lakhs (Previous year Rs. 25,000 lakhs) and pledge

of shares of the Company held by the holding

company.

(ii) The facilities provided by a financial institution upto

Rs. 20,000 lakhs (Previous year Rs. 20,000 lakhs)

and interest and other charges thereon are secured

by a Guarantee of EOL for Rs. 20,000 lakhs. To

secure obligation of EOL pursuant to the said

guarantee, security is created by first mortgage

and charge on immovable and movable properties

pertaining to the EOL refinery project, pledge over

shares of EOL and an assignment of the project

contracts relating to EOL refinery project, the trust

and retention accounts pertaining thereto.

(iii) Secured Master Restructuring Agreement (MRA)

Rupee Term loan (including funded interest) from

bank carrying average interest cost of 10% to

11.50% per annum with quarterly installments

payment upto June 2027.

(iv) Recognition of Facility Stoppage and Facility E

The Master Restructuring Agreement (MRA) dated

December 17, 2004 entered pursuant to Corporate

Debt Restructuring Scheme, gives an option,

subject to consent of its lenders, to the Company

to prepay funded interest loans (FS loan) of Rs.

86,908.16 lakhs (previous year Rs. 86,908.16

lakhs) at any point of time during their term at

a reduced amount computed in accordance with

mechanism provided in the MRA or in full, by one

bullet payment in March, 2026. Interest on FS

loan was not payable if FS loan was prepaid by

April 24, 2012 and therefore considering the plans

to prepay FS loan, interest liability on FS loan (Facility

E) was earlier considered as contingent liability and

now recognised as loan as the same is funded.

In order to reflect the substance of the above, in

the terms of presentation in balance sheet, an

amount of Rs. 66,135.98 lakhs (previous year

Rs. 68,195.06 lakhs) being the amount not payable

as at balance sheet date has been presented as

deduction from funded interest facilities under

secured loans / borrowings to reflect the present

obligation on the balance sheet date. The

changes in the present obligation of the said loans

subsequent to capitalisation of the Terminal Project

till each reporting date is treated as a finance

cost item in the statement of profit and loss.

Facility E of Rs. 24,179.58 lakhs is presented in

the balance sheet under Funded Interest Facilities

from banks and financial institutions under long

term borrowings, with corresponding recognition

of Rs. 807.34 lakhs, being interest attributable to

construction period, being added to fixed assets

and balance as Exceptional Item in the Statement

of Profit and Loss.

Secured Other Rupee Term loan

(i) Secured rupee term loan from bank carrying

interest rates ranging from 12% to 17% (base

rate +/- spread) per annum. Repayment of term

loan ranges between quarterly installments from

quarter ending June 2012 to quarter ending

March 2023.

(ii) Term loans are secured by first mortgage and

charge of all present and future movable and

immovable assets / properties of the Company.

The loan is further secured by Corporate

Guarantee of Essar Ports Limited (formerly known

as Essar Shipping Ports & Logistics Limited) of

Rs. 56,000 lakhs.

(iii) Foreign Currency Convertible Bonds carries

interest @ 5% per annum payable semi annually.

The bonds are convertible into equity shares of

the company, any time upto the date of maturity

at the option of the bond holders at conversion

price of Rs. 91.70 per share at a predetermined

exchange rate of Rs. 46.94 per USD. The bonds if

not converted till the maturity date will be redeemed

at par.

(iv) Unsecured rupee term loan from financial

institutions carry interest rate of 13% per annum,

repayable on April 1, 2012. Essar Shipping &

Logistics Limited has given corporate guarantee

of Rs. 30,000 lakhs.

(v) Unsecured rupee term loan of previous year from

banks carry interest @ (base rate) - 3.75% per

annum, repaid on July 1, 2011.

(vi) Foreign currency buyers credit carrying interest

rate ranging from 2.62% to 3.62% (LIBOR plus

spread) per annum. Buyers credit facility are part

of consortium agreement. The Company has

intention to convert buyers credit into term loan

on the maturity. Repayment terms will be as per

those disclosed under point (3) above. The loan is

further secured by Corporate Guarantee of Essar

Ports Limited (Formerly known as Essar Shipping

Ports & Logistics Limited) of Rs. 67,960 lakhs.

91



6 DEFERRED TAX LIABILITY (NET)

The components of net deferred tax liability / assets are as follows:- (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011


Depreciation on fixed assets 25,581.11 16,151.88

(A) 25,581.11 16,151.88

Deferred tax assets

Unabsorbed depreciation 33,792.87 16,135.99

(B) 33,792.87 16,135.99

Deferred tax liability / (assets) net (A-B) (8,211.76) 15.89

a. The Company has recognized net deferred tax asset of Rs. 12,549.05 lakhs on unabsorbed depreciation on the

basis of estimate of contracted revenue for the period for which agreement has been entered into by it.

b. The Company has disclosed Rs. 12,549.05 lakhs (previous year Rs. Nil) as deferred tax assets and Rs. 4,337.29

lakhs (previous year Rs. 15.89 lakhs) as deferred tax liability.

7 OTHER LONG TERM LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Advances from customers 0.05 –

Payable in respect of capital goods 12.50 12.50

Acceptances (against LC issued by lenders and convertible into

secured term loans on due dates)

24,610.21 49,464.44

Total 24,622.76 49,476.94

8 PROVISIONS (Rs. in lakhs)

Particulars Long term provisions Short term provisions

As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011


Gratuity 55.85 39.97 1.25 0.82

Leave encashment 434.77 304.87 18.50 28.05

(b) Others

Provisions for taxation (net of advance tax) 1.83 3.13 458.30 704.14

Proposed dividend on equity shares – – 2,072.43 –

Proposed dividend on preference

shares

– – 0.15 –

Tax on proposed dividend – – 339.83 –

Total 492.45 347.97 2,890.46 733.01



9 SHORT TERM BORROWINGS (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Secured

Working capital loan

From banks 1,503.55 1,673.98

Rupee short term loan

(secured by first pari passu charge on all the present and

future movable / immovable assets / properties, insurance

contracts, accounts, receivables and all other assets of the

Company including but not limited to goodwill, trademarks

and patents)

(A) 1,503.55 1,673.98

Unsecured

Buyers’ credit 258.04 –

(B) 258.04 –

Total (A + B ) 1,761.59 1,673.98

10 TRADE PAYABLES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Trade payables-

Due to micro and small enterprises – –

Others 7,708.09 3,566.27

Total 7,708.09 3,566.27

11 OTHER CURRENT LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Payable in respect of capital goods 33,111.51 9,451.21

Acceptance in respect of capital goods 1,110.00 45.71

Advance from customers 51.45 1,116.65

Current maturities of long-term borrowings (Refer note 5) 52,349.22 22,021.81


Interest accrued and due on borrowings 101.15 300.00

Other liabilities

Statutory and other related dues 812.00 4,340.50

Payable in respect of purchase of preference shares 18,587.80 –

Others 1,368.90 1,545.88

Total 107,906.64 39,168.37

93



12.

FIX

ED

AS

SE

TS

(R

s.

in la

khs)

GR

OS

S B

LOC

K A

T C

OS

T /

VALU

ATIO

ND

EP

RE

CIA

TIO

N /

IMPA

IRM

EN

T N

ET

BLO

CK

Par

ticul

ars

As

at

Ap

ril 1

,

2011

Ad

diti

ons

dur

ing

the

year

Oth

er

adju

stm

ents

[Bor

row

ing

cost

capi

talis

ed]

Sal

e /

ded

uctio

ns

Ad

just

men

ts

due

to

dem

erge

r

As

at

Mar

ch 3

1,

2012

As

at

Ap

ril 1

,

2011

For

the

year

Ded

uctio

nsA

dju

stm

ents

due

to

dem

erge

r

As

at

Mar

ch 3

1,

2012

As

at

Mar

ch 3

1,

2012

As

at

Mar

ch 3

1,

2011

Tan

gib

le fi

xed

ass

ets

Land

- fre

ehol

d 2

4.22

1

38.1

2 –

–

–

1

62.3

4 –

–

–

–

–

1

62.3

4 2

4.22

Bui

ldin

gs 6

,415

.99

4,1

90.3

2 3

50.0

1 –

–

1

0,95

6.32

7

62.9

2 3

70.4

5 –

–

1

,133

.37

9,8

22.9

5 5

,653

.07

Flee

t -

- O

wne

d 1

2,62

3.76

–

–

–

–

1

2,62

3.75

4

,063

.37

1,2

79.0

3 –

–

5

,342

.40

7,2

81.3

6 8

,560

.39

Ber

th a

nd je

tty

56,

773.

69

–

–

–

–

56,

773.

69

2,0

83.8

5 2

,270

.97

–

–

4,3

54.8

2 5

2,41

8.88

5

4,69

0.08

Pla

nt a

nd m

achi

nery

30

2,92

3.69

10

1,20

6.13

7

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.00

–

–

411,

645.

81

50,

340.

89

19,

125.

23

–

–

69,

466.

12

342,

179.

70

252,

583.

30

Furn

iture

, fixt

ure,

air-

cond

ition

ers,

463

.63

72.

69

–

–

–

536

.32

125

.85

54.

09

–

–

179

.95

356

.37

337

.78

refr

iger

ator

s an

d o

ffice

eq

uip

men

t’s

Vehi

cles

–

2

41.8

4 –

–

–

2

41.8

4 –

2

0.84

–

–

2

0.84

2

21.0

0 –

Tota

l tan

gibl

e fix

ed a

sset

s (A

)37

9,22

4.97

10

5,84

9.10

7

,866

.00

–

–

492,

940.

08

57,

376.

87

23,

120.

62

–

–

80,

497.

49

412,

442.

60

321,

848.

84

Inta

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xed

ass

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Sof

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e 3

2.04

0

.00

–

–

–

32.

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18.

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0 –

–

2

1.91

1

0.11

1

3.52

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ts (B

) 3

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0

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–

–

–

32.

04

18.

51

3.4

0 –

–

2

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l (A

+B

)37

9,25

7.01

10

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9.11

7

,866

.00

–

–

492,

972.

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57,

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23,

124.

02

–

–

80,

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412,

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321,

862.

36

Pre

viou

s ye

ar82

0,87

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11

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–

1

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5.27

5

41,8

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7 37

9,25

5.62

15

7,67

5.51

3

4,75

5.51

1

2,32

2.43

1

22,7

13.1

9 5

7,39

5.39

66

3,20

3.00

No

tes:

-

i)

P

ursu

ant

to t

he n

otifi

catio

n of

Min

istr

y of

Com

pan

y A

ffairs

rel

atin

g to

the

effe

cts

of c

hang

es in

fore

ign

exch

ange

rat

es, t

he r

esul

tant

gai

n of

NIL

(pre

viou

s ye

ar lo

ss o

f Rs.

718

lakh

s) a

risin

g on

con

vers

ion

/ tr

ansl

atio

n /

sett

lem

ent

of lo

ng t

erm

fore

ign

curr

ency

item

s ha

s b

een

adju

sted

in t

he c

urre

nt y

ear

ded

uctio

ns t

o fle

et a

nd a

n ai

rcra

ft.

ii)

Th

e co

mp

any

reva

lued

its

fleet

on

Mar

ch 3

1, 2

008

on t

he b

asis

of v

alua

tion

don

e b

y ap

pro

ved

val

uers

. The

net

diff

eren

ce b

etw

een

boo

k va

lue

and

rev

alue

d v

alue

as

on 3

1st

Mar

ch, 2

008

amou

ntin

g to

Rs.

48.

40 la

khs

had

bee

n ad

ded

to

boo

k

valu

e of

flee

t an

d c

orre

spon

din

g cr

edit

was

giv

en t

o Fi

xed

Ass

ets

Rev

alua

tion

Res

erve

. Gro

ss B

lock

as

on M

arch

31,

201

2 in

clud

es R

s. 6

,223

lakh

s b

eing

an

amou

nt a

dd

ed o

n re

valu

atio

n of

flee

t.

iii)

A

dd

ition

s to

Pla

nt a

nd M

achi

nery

incl

ude

Rs.

807

.34

lakh

s d

ue t

o ca

pita

lizat

ion

of in

tere

st o

n Fa

cilit

y S

top

pag

e fro

m A

pril

24,

200

7 to

Jun

e 30

, 20

07. [

refe

r no

te: 5

(C)(i

v)]

iv)

Det

ails

of d

epre

ciat

ion

are

as fo

llow

s:

Par

ticul

ars

( Rs.

in la

khs)

Dep

reci

atio

n fo

r th

e ye

ar a

s ab

ove

23,

124.

02

Less

: D

epre

ciat

ion

on ii

i ab

ove

cons

ider

ed a

s ex

cep

tiona

l ite

m (1

78.9

3)

Less

: D

epre

ciat

ion

cap

italis

ed d

urin

g th

e ye

ar (9

09.3

6)

Less

: D

epre

ciat

ion

reco

uped

from

fixe

d a

sset

s re

valu

atio

n re

serv

e (1

1.16

)

Dep

reci

atio

n ch

arg

ed t

o s

tate

men

t o

f p

rofit

and

loss

2

2,02

4.56



13 CAPITAL WORK-IN-PROGRESS (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Capital work-in-progress 163,089.81 157,190.08

Expenditure during the construction 50,416.36 28,965.98

Total 213,506.17 186,156.06

EXPENDITURE DURING CONSTRUCTION (Rs. in lakhs)

Particulars As at

March 31,

2011

Additions

during the year

Capitalised

During the Year

As at

March 31,

2012

Expenditure during construction

Stores and spares 60.04 100.67 (160.71) –

Certification and survey charges 30.19 200.80 – 230.99

Salary and manpower expenses 1,670.49 2,204.99 (136.87) 3,738.62

Legal and professional charges 2,059.24 1,945.34 (1,313.97) 2,690.61

Insurance 180.06 136.52 (83.13) 233.44

Interest and finance cost 18,439.77 21,443.95 (7,894.53) 31,989.20

Agency fee 57.26 56.58 – 113.84

Depreciation 683.82 909.36 – 1,593.18

Taxes and dues 6.75 6.96 – 13.70

Traveling expenses 24.36 119.36 (1.23) 142.50

Hiring charges 287.93 347.84 (46.20) 589.57

Custom duty and clearing expense 612.19 – (612.19) –

Stamp duty and registration charges 2,525.31 – (2,525.31) –

Lease rent expenses 1,309.82 3,080.17 (412.49) 3,977.50

Manning management / commitment fees 8.52 – (8.52) –

Power and electricity expenses – 218.95 – 218.95

Loss / (gain) on foreign currency transaction and

translation

11.62 1,751.96 – 1,763.58

General expenses 2,112.20 616.09 – 2,728.29

Total (A) 30,079.57 33,139.54 (13,195.15) 50,023.97

Less :

Interest accrued on term deposits 1,246.53 (131.61) – 1,114.91

Gain on redemption of mutual funds (215.63) (49.74) 178.73 (86.64)

Interest on intercompany deposits given (24.52) – – (24.52)

Site formation / scrap income (52.27) (147.79) – (200.06)

Vessel and equipment hire income (22.22) – – (22.22)

Income from lease rent (1,212.12) – 1,212.12 –

Income from trial operation (759.48) – 759.48 –

Miscellaneous Income (73.88) (315.20) – (389.08)

Total (B) (1,113.59) (644.34) 2,150.33 392.39

Total (A+B) 28,965.98 32,495.20 (11,044.82) 50,416.36

95



14 INVESTMENTS (Rs. in lakhs)

Non current Investments Current Investments

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

Unquoted

Non trade investments (valued at cost )

(a) Investments in equity shares

(unquoted, fully paid up )

386,000 (previous year 386,000)

equity shares of Rs. 10 /- each of

Bhander Power Limited

104.51 104.51 – –

(b) Current Investments

42.643 Units (previous year NIL) of Taurus

Mutual Fund

– – 0.54 –

Total 104.51 104.51 0.54 –

15 LOANS AND ADVANCES (UNSECURED,

CONSIDERED GOOD) (Rs. in lakhs)

Non current Loans and advances Current Loans and advances

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

a. Capital advances 14,017.99 25,831.78 – –

b. Security deposits 566.66 151.51 – 20.73

c. Loans and advances to related

parties

4,571.11 6,955.49 1,854.20 2,129.58

d. Advance recoverable in cash or kind

or for value to be received

30.76 – 483.54 1,657.44

e. Other loans and advances

(unsecured and considered good,

unless stated otherwise)

Advance income-tax and tax

deducted at source (net of provision

for taxation)

253.00 167.53 4,195.11 5,240.82

MAT credit available 3,543.42 212.07 – –

Prepaid expenses 3,515.29 3,928.97 2,175.45 1,868.62

Cenvat receivable 1,670.27 393.55 10,148.14 13,047.59

Advance to vendor – – 426.99 6.26

Other receivable – – 32.91 –

8,981.98 4,702.12 16,978.60 20,163.29

Total 28,168.50 37,640.90 19,316.34 23,971.04



16 TRADE RECEIVABLES AND

OTHER ASSETS (Rs. in lakhs)

Non current Current

Particulars As at

March 31,

2012

As at

March 31,

2011

As at

March 31,

2012

As at

March 31,

2011

a. Trade receivables outstanding

for a period exceeding six

months from the date they are

due for payment

Unsecured, considered good A – – 12.75 –

b. Other trade receivables

(unsecured and considered

good)

B – – 15,842.81 8,318.06

Total Trade receivable (A + B) – – 15,855.56 8,318.06

c. Others (unsecured and

considered good, unless stated

otherwise)

Non current bank balances (refer

note 18)

2,820.41 – – –

Deposits in escrow account 99.26 – – –

Income receivables – – 198.59 275.19

Unamortised share issue

expenses

118.81 104.39 64.30 18.00

Insurance claim receivable – – – 291.83

Interest accrued on fixed

deposits

– – 86.58 111.22

Interest accrued on inter

corporate deposits

– – 167.61 –

Interest accrued but not due

on loans & advances given to

related parties

– – – 308.00

Others – – 2,526.96 63.23

Total other current assets 3,038.48 104.39 3,044.04 1,067.47

17 INVENTORIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Stores and spares 644.42 2,251.04

Fuel, oil and lubes 44.16 5.56

Total 688.58 2,256.60

Note: Inventories are valued at lower of cost and net realisable value.

97



18 CASH AND BANK BALANCES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011


Balances with banks

- On current accounts 1,615.41 5,919.08

- Deposits with original maturity of less than three months – 2,536.26

Cash on hand – 0.08

Total cash and cash equivalent [A] 1,615.41 8,455.42


Deposits with original maturity of more than 3 months but

less than 12 months

250.00 –

Deposits with original maturity of more than 12 months 416.33 –

Margin money deposit 468.13 7,237.00

Total other bank balance [B] 1,134.46 7,237.00

Total cash and bank balances ( A + B ) 2,749.87 15,692.42

19 REVENUE FROM OPERATIONS (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Sale of services

Port & terminal services 110,008.19 69,890.98

Fleet operating and chartering earnings 872.50 63,667.98

Surface logistics services – 40,658.00

Oilfield service Income – 16,852.78

Total 110,880.69 191,069.74

20 OTHER INCOME (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Interest income

- from banks 88.43 625.85

- from others 2.50 6,486.22

- Income tax refund 364.99 174.18

- from Inter corporate deposit 809.88 –

Management fee income 208.31 –

Dividend from others – 108.84

Net gain on sale of investments 335.02 161.96

Net gain on sale of long term investments 3.04 5,259.81

Net gain on foreign currency translation and transaction (other than

considered as finance cost)

5.97 1,495.32

Profit on sale of assets 4.85 3,011.46

Technical and facility sharing service income – 15.75

Other non operating income (net of expenses directly attributable to

such income)

402.71 203.13

Total 2,225.70 17,542.52



21 EMPLOYEE BENEFITS EXPENSE (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Floating staff / operating related




Office staff / administrative related

Salaries, wages and bonus 1,766.57 5,788.17



Total 2,198.66 11,344.12

22 OPERATING EXPENSES (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Consumption of stores and spares 651.97 4,607.37

Consumption of fuel, oil and water – 8,928.54

Direct voyage expenses / surface logistics services 233.84 70,667.18

Commission, brokerage and agency fees 7.29 923.76

Operation and maintenance service expense 1,840.73 –

Standing costs – 2,790.69

Dry docking expenses 125.89 1,717.74

Rent and hire charges 3,789.39 1,286.74

Manning management 2,253.04 2,576.10

Power and fuel 346.54 137.10

Security maintenance charges 63.35 167.89

Lighterage cost 1,157.14 1,800.02

Port charges 1,165.06 –

Wharfage charges 4,412.41 3,749.30

Repairs plant and machinery 644.65 639.05

Insurance, protection and indemnity club fees 871.12 2,000.57

Total 17,562.42 101,992.05

99



23 ESTABLISHMENT AND OTHER EXPENSES (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Rent 190.42 583.19

Rates and taxes 52.20 56.49

Repairs and maintenance

-buildings – 45.49

-others 573.00 433.31

Legal and professional fees 551.96 1,694.82

Traveling and conveyance 279.31 411.97


Communication expenses 17.32 5.91

Vehicle hire and maintenance charges 11.46 107.02


Amortisation of foreign currency monetary Item translation difference

account (FCMITDA)

4.51 –

Total 2,024.05 4,073.51

(Rs. in lakhs)

For the year ended

March 31, 2012

For the year ended

March 31, 2011

AUDITORS’ REMUNERATION INCLUDES

For audit fees 32.00 44.50


For reimbursement of expenses 3.30 1.53

Total 111.43 99.76

24 FINANCE COSTS (Rs. in lakhs)


March 31, 2012

For the year ended

March 31, 2011

Interest expense

- on bank loans 25,926.74 21,773.63

- on loan from financial Institution 14,636.87 16,253.97

- on finance lease obligations – 3,047.22

- on foreign currency convertible bonds 62.32 881.90

- on debentures – 4,044.40

- on others 436.58 –

- Other borrowing costs 1,018.33 1,374.18

Total 42,080.84 47,375.30



25 SUBSIDIARIES

The reporting date of all the subsidiaries is March 31, 2012. The list of the subsidiaries of the Company which are

included in the consolidation and the Group’s holding therein are as under:

Name of companies Country of

incorporation

Immediate

holding

% of Ownership Interest

As at

March 31,

2012

As at

March 31,

2011

Vadinar Oil Terminal Limited (“VOTL”) India EPL 100% 100%

Vadinar Ports & Terminals Limited (“VPTL”) India VOTL 100% 100%

Essar Bulk Terminal Limited (“EBTL”) India EPL 74% 74%

Essar Bulk Terminal Paradip Limited (“EBTPL”) –

from 31.03.2011

India EPL 71% 59%

Essar Paradip Terminals Limited (“EPaTL”) India EPL 90% 75%

Essar Dredging Limited (“EDL”) # India EBTL NA 74%

Essar Bulk Terminal (Salaya) Limited (“EBTSL”) India EPL 100% 100%

Essar Logistics Limited (“ELL”)* India EPL NA NA

Essar Shipping Limited (“ESL”) * India EPL NA NA

Essar Oilfields Services Limited (“EOSL”)* Mauritius EPL NA NA

Essar Oilfield Services India Limited (“EOSIL”) * India EOSL NA NA

Energy Transportation International Limited (“ETIL”) * Bermuda EPL NA NA

Energy II Limited (“EII”)* Bermuda EPL NA NA

Essar Ports & Terminals Limited (“EPTL”) @ Mauritius EPL NA NA

Essar International Limited (“EIL”)@ Mauritius EPL NA NA

* : ceased to be subsidiaries on demerger from October 1, 2010

@ : ceased to be subsidiaries on merger from September 30, 2010

# : ceased to be subsidiary on July 1, 2011

26 COMPOSITE SCHEME OF ARRANGEMENT

The Hon’ble High Court of Gujarat at Ahmedabad vide order dated 1 March 2011 approved the Composite Scheme

of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports & Terminals Limited

(EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).

The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics Business

and the Oilfields Services Business into ESL.

Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields

Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing

in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are

based on financial statements as on September 30, 2010.The difference between the values of assets and liabilities

transferred was first adjusted against share capital (Rs. 205.23 crore), Rs. 25 crore against Debenture Redemption

Reserve and the balance to General Reserve of the Company.

Foreign Currency Convertible Bonds aggregating to USD 400 lakhs (out of USD 2,800 lakhs) issued by ESPLL stood

transferred to ESL.

In consideration of the demerger, the Company allotted 41,04,55,552 equity shares of Rs.10/- each as fully paid up to

the eligible members of ESPLL whose name were recorded in the register of members of ESPLL as on May 21, 2011, in

terms of the Scheme as detailed below.

101



Name of the company No. of shares

Essar Shipping & Logistics Limited (immediate holding company) 340,903,706

Essar Global Limited 66

Essar Steel India Limited ( subsidiary of Essar Global Limited) 2,547,223

Erstwhile other shareholders of ESPLL 67,004,557

Total 410,455,552

27 CONTINGENT LIABILITIES (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

Claims against the Group not acknowledged as debt 322.59 1,025.00

Guarantees given by banks 905.35 905.35

Guarantee on behalf of others 10,400.00 10,400.00

Bills discounted with banks 2,500.00 –

Interest on facility E on principal amount of facility stoppage as per

MRA (refer note no. 5 ( c ) (iv) )

– 18,780.00

Capital commitments

Estimated amount of contract remaining to be executed on capital

account and not provided for

99,943.15 66,221.40

28 COMMITTED LIABILITY FOR FUTURE LEASE PAYMENT

OPERATING LEASE (Rs. in lakhs)

Particulars As at

March 31, 2012

As at

March 31, 2011

a. Payable not later than 1 year 449.98 333.51

b. Payable later than 1 year and not later than 5 years 1,831.33 1334.02

c. Payable later than 5 years 9,604.27 10080.21

Total 11,885.58 11,747.74

29 SEGMENT DISCLOSURE (Rs. in lakhs)


March 31, 2012

Year ended

March 31, 2011

a) Business segment

Segment revenue

Operating income

Fleet operating and chartering 3,622.00 73,490.37

Surface transport services – 40,658.00

Port and terminal services 110,008.19 70,555.85

Oilfields services – 16,852.78

Unallocated 3,422.66 14,531.07

Total 117,052.85 216,088.07



Less: Inter segment revenue (3,949.50) (7,475.81)

Net Income from operation 113,103.35 208,612.26

Segment results

Fleet operating and chartering 474.57 5,435.00




Unallocated 2,222.66 14,531.50

Profit from operation before interest and finance charges 69,296.70 59,117.96

Less: Unallocable Interest and finance expense (42,080.84) (47,375.30)

Profit before Tax and Exception item 27,215.86 11,742.66

Less: Exceptional Item (23,551.18) –

Profit before Tax 3,664.68 11,742.66

Less: Income tax 6,219.54 (3,460.34)

Profit before share of minority’s interest 9,884.22 8,282.32

Share of minority’s interest (3,488.75) (1,268.96)

Profit for the year 6,395.47 7,013.36

Segment assets



Unallocated 47,571.42 37,284.00

Total Assets 698,925.29 598,144.20

Segment liabilities

Fleet operating and chartering (4,568.54) (8,370.12)

Port and terminal services (86,702.64) (66,580.00)

Total liabilities (91,271.18) (74,950.12)

Fixed assets acquired during the year




Total 100,862.71 114,221.34

Depreciation*

Fleet operating and chartering 31.93 9,349.25

Surface transport services – 341.25



Total 22,024.56 34,755.45

* includes depreciation of Rs. 909.36 lakhs (previous year Rs. 747 lakhs) transferred to expenditure during

construction and Rs. 11.16 lakhs (previous year Rs. 1,925 lakhs) recouped from fixed assets revaluation

reserve.

29 SEGMENT DISCLOSURE (CONTD.) (Rs. in lakhs)


March 31, 2012

Year ended

March 31, 2011

103



(Rs. in lakhs)

Segment revenue Year ended

March 31, 2012

Year ended

March 31, 2011

b) Geographical segment

India 113,103.35 189,861.00

China – 1,508.00

U.S.A. – 2,497.00

U.K. – 2,017.00

Rest of the world – 12,729.00

Total 113,103.35 208,612.00


The calculation of basic and diluted earnings per share is based on the following data:

Particulars As at

March 31, 2012

As at

March 31, 2011

Net profit after tax and minority interest attributable to equity share

holders for basic EPS (Rs. in lakhs)

6,395.47 7,015.18

Add: Interest on foreign currency convertible bonds (FCCB) 62.32 –

Exchange loss / (gain) on FCCB conversion (Rs. in lakhs) 4.51 –

Net profit after tax attributable to equity share holders for diluted EPS

(Rs. in lakhs)

6,462.30 7,015.18

Weighted average no. of equity shares outstanding during the year

for Basic EPS (nos.) 410,455,552 410,455,552

for Diluted EPS (nos.) 430,953,476 422,796,927

Basic EPS (Rs.) 1.56 1.71

Diluted EPS (Rs.) 1.50 1.66

Nominal value per Share (Rs.) 10 10

Reconciliation between number of shares used for calculating basic

and diluted earnings per share

a) Number of shares used for calculating basic EPS 410,455,552 410,455,552

b) Potential equity shares (convertible FCCB) 20,475,463 12,341,375

c) Potential equity shares (ESOP) 22,460 –

d) Number of shares used for calculating diluted EPS (a+b+c) 430,953,476 422,796,927

Note : The Company has capitalised interest of Rs. 1,043.95 lakhs (Previous year Rs. 247.88 lakhs) on FCCB in consolidated

financial statement, which is not considered for calculation of profit for diluted EPS.



31 FOREIGN CURRENCY EXPOSURE

i) There were no forward / options contracts entered in to by the Group during the financial year to hedge its

foreign currency exposures.

ii) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are

given below:

(A) Amount receivable in foreign currency on account of the following:

Particulars Rs. in lakhs Rs. in lakhs Currency Foreign currency in lakhs

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Export of goods and services 798.00 – USD 15.6 –

Bank balances 4.94 5.00 USD 0.10 0.11

(B) Amount payable in foreign currency on account of the following:

Particulars Rs. in lakhs Rs. in lakhs Currency Foreign currency in lakhs

Year ended

March 31,

2012

Year ended

March 31,

2011

Year ended

March 31,

2012

Year ended

March 31,

2011

Import of goods and services 46.21 – USD 0.90 –

– 66.13 GBP – 0.84

– 53.06 EUR – 0.84

– 2.74 SGD – 0.08

Buyers credit (including

interest accrued)

14,182.25 8,309.63 USD 277.23 186.11

209.81 – EUR 3.03 –

48.33 – SEK 6.43 –

Foreign Currency

Convertible Bonds

20,549.57 17,868.00 USD 401.70 401.70

32 TAXATION

Income tax on income from qualifying fleet is provided on the basis of Tonnage Tax Scheme. Income tax on other income

is provided as per other provisions of Income Tax Act, 1961. Taxes on income earned by foreign subsidiaries are provided

based on tax laws of its domicile country.

33 GOING CONCERN

As on March 31, 2012, the Group’s current liabilities exceeded its current assets by Rs. 78,611.84 lakhs due to

classification as current of borrowings amounting to Rs. 52,349.22 lakhs due repayable within the next one year and Rs.

33,111.51 lakhs payable for purchase of capital assets. Subsequent to year end, the Company has rolled over loans of

Rs. 30,000 lakhs for a period exceeding 12 months, drawn amounts of Rs. 19,093 lakhs under various existing facilities

for payment to creditors for purchase of capital assets and through the Operational Cash Flows. The Company is also in

discussion for raising funds through equity. As such, the excess current liabilities position will not affect the operations of

the Group and therefore these financial statements have been prepared as a going concern.

34 EMPLOYEE STOCK OPTION SCHEME

The members of the Company at the annual general meeting held on September 9, 2011 have approved the issue of

employee stock options under the “Essar Ports Employee Stock Options Scheme -2011” (hereinafter referred to as the

Scheme). The Scheme shall be operated and administered under the superintendence of the remuneration committee of

the Board.

105



Eligible employees of the Company, its holding company and subsidiaries are entitled to options under the Scheme. Each

option entitles the eligible employees to one underlying equity share of the Company.

A trust will be formed for the administration of the Scheme. The remuneration committee is authorised to grant the

options to the eligible employees and the exercise price of the options in terms of the Scheme. 1/3 options granted will

vest in the hands of the eligible employees over a period of 3 years commencing from the end of the 3rd, 4th and 5th year

respectively from the date of grant of the option. The eligible employees can exercise the options vested in them within a

period of 7 years from the date of vesting.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the

exercise price of the option (being the intrinsic value of the option) representing stock compensation expense is expensed

over the vesting period.

Employee stock options details for ESOP as on the Balance sheet date are as follows:


March 31, 2012

Options

(numbers)

Weighted average

exercise price per

option

Option outstanding at the beginning of the year – –

Granted during the year 7,40,334 71.1

Vested during the year – –

Exercised during the year – –

Lapsed during the year – –

Options outstanding at the end of the year 7,40,334 71.1

The impact on statement of profit and loss and earnings per share if the ‘fair value’ of the Options (on the date of the

grant) were considered instead of the ‘intrinsic value’ is as under:

(Rs. in lakhs)


March 31, 2011

Net Profit / (loss) (as reported) –

Add / (Less): stock based employee compensation (intrinsic value) –

Add / (Less): stock based compensation expenses determined under fair value method for the

grants issued

26.78

Net Profit / (loss) (proforma) (26.78)

Basic & dilutive earnings per share (as reported) –

Basic & dilutive earnings per share (proforma) (0.01)

Diluted earnings per share (as reported) (refer note 27) –

Diluted earnings per share (proforma) (0.01)

The fair value of the Options granted is estimated on the date of grant using Black Scholes Options Pricing Model taking

into account the terms and conditions upon which the Options were granted. The following table lists the inputs to the

model used for calculating fair value:

Assumptions Year ended

March 31, 2012

Risk free interest rate 8.36%

Expected life 58

Expected annual volatility of shares 64.81%

Expected dividend yield 0.00%



35 EMPLOYEE BENEFITS :



The Company has recognised the following amounts in the statement of profit and loss during the year:

(Rs. in lakhs)


a) Employer’s contribution to gratuity fund (offshore crew staff) 0.60 29.00

b) Group accident policy premium (all employees) 4.58 10.33

c) Contribution to pension fund (offshore crew staff) 2.39 11.00

d) Employer’s contribution to superannuation fund 0.94 16.33

e) Employer’s contribution to provident fund (offshore crew staff) 101.36 115.53

Total 109.88 182.19

The above amounts are included in ‘contribution to staff provident and other funds’ (refer note 18).

II. Defined benefit

plans

a. Contribution to provident fund

b. Contribution to gratuity fund

c. Provision for compensated absences (CA)

In accordance with AS-15, relevant disclosures are as under:

(A) Changes in present value of defined benefit obligation: (Rs. in lakhs)

Particulars Provident fund (funded) Gratuity-shore officers

(funded)

Gratuity-off shore officers

(non funded)

CA-paid leave (non funded)

March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11

Present value of defined

benefit obligation – opening

balance

1,408.24 1,668.75 178.58 156.06 (0.00)* 194.70 231.24 278.17


Current service contribution-

employee

36.26 132.93 – – – – 4.15 –

Interest cost 15.92 86.52 15.44 11.65 – 8.00 15.07 18.53


Plan amendment – – – 32.65 – – – –

Acquisitions 68.52 (419.04) – (156.46) – (225.70) – (167.17)

Benefits paid – (259.60) (3.21) (13.41) – – (25.97) (13.29)

Actuarial (gain) / loss on

obligations

(1,279.74) 78.88 10.43 32.86 – 8.00 38.60 83.09


benefit obligation – closing

268.46 1,408.24 241.60 178.59 (0.00)* (0.00) 314.62 231.24

* Amount is less than Rs. 1 lakh

107



(B) Changes in the fair value of plan asset: (Rs. in lakhs)


(funded)


(non funded)



Fair value of plan assets –

opening

1,408.24 1,668.74 136.90 197.30 – – – –


assets

15.92 86.52 13.20 20.54 – – – –

Actual return on plan assets – – – – – – – –

Acquisition adjustment – (166.30) – (165.01) – – – –

Actuarial gains / (losses) (1,279.74) 78.88 0.55 (4.49) – – – –

Contributions by the

employer / employees

124.04 – 38.43 101.98 – – – (1.97)

Benefits paid – (259.60) (3.21) (13.41) – – – (5.46)

Fair value of plan assets –

Closing

268.46 1,408.24 185.87 136.90 – – – (7.43)

(C) Amount recognised in balance sheet: (Rs. in lakhs)


(funded)


(non funded)




benefit obligation at the end

of the year

268.46 1,408.24 241.60 178.59 (0.00) – 314.62 231.24

Fair value of plan assets at

end of the year

268.46 1,408.24 185.87 136.90 – – – (7.43)

Liability / (asset) recognised in

the Balance Sheet (included

in current liabilities and

provisions) (refer note 8)

– – 55.73 41.69 (0.00) – 314.62 238.67

(D) Expenses recognised in the statement of profit and loss: (Rs. in lakhs)


(funded)


(non funded)




Interest cost 15.92 86.52 15.44 11.65 – 8.00 19.22 18.53


assets

(15.92) (86.52) (13.20) (20.54) – – – –

Past service cost – – 0.89 98.69 – – – –

Net actuarial (gain) / loss

recognised in the period

– – 9.88 37.35 – 8.00 26.86 92.56

Total expenses recognised

in the Statement of Profit

and Loss (Included in

Contribution to provident and

other funds) (refer note 21)

19.26 119.80 53.37 175.47 – 31.00 97.60 133.52



(E) Experience history: (Rs. in lakhs)

Gratuity-shore officers (funded)

Particulars March 31, 12 March 31, 11 March 31, 10 March 31, 09 March 31, 08

Defined benefit obligation

at the end of the year

(241.59) (178.21) (155.86) (78.16) NA

Plan assets at the end of

the year

185.84 137.10 197.56 139.84 NA

Funded status (55.75) (31.10) 41.70 61.68 NA

Experience gain / (loss)

adjustments on plan

liabilities

(18.99) (35.02) (66.04) 85.11 NA


adjustments on plan assets

0.55 (5.23) (9.36) 0.17 NA

Actuarial gain / (loss) due to

change on assumptions

8.58 2.10 4.15 – NA

(Rs. in lakhs)

Gratuity - offshore officers (non funded)




– – (190.00) (280.00) NA


the year year

– – – – NA

Funded status – – (190.00) (280.00) NA


adjustments on plan

liabilities

– – 90.00 59.00 NA



– – – – NA



– – 34.00 52.00 NA

(Rs. in lakhs)





(314.62) (231.41) (278.40) (105.27) NA


the year

– – – – NA

Funded status (314.62) (231.41) (278.40) (105.27) NA


adjustments on plan

liabilities

(35.69) (94.13) (140.29) 170.00 NA



– – – – NA



19.99 2.13 21.46 (54.00) NA

109



(F) Category of plan assets:

Percentage of each category

of plan assets to total fair

value of plan assets:

Provident fund (funded) Gratuity-shore officers

(funded)


(non funded)



Administered by Life

Insurance Corporation of India

– – 100% 100.00% NA NA NA NA

Government of India security 25.00% 25.00% – – NA NA NA NA

Public sector bonds / TDRs 60.00% 60.00% – – NA NA NA NA

State government securities 15.00% 15.00% – – NA NA NA NA


In accordance with Accounting Standard (AS) 15 (Revised), actuarial valuation as at the year end was done

in respect of the aforesaid defined benefit plans based on the following assumptions:

i) General assumptions:


(funded)


(non funded)



Discount rate (per annum) 8.50% 7.80% 8.50% 8.00% N.A N.A 8.50% 8.00%

Rate of return on plan assets

(for funded scheme)

8.60% 8.50% 8.50% 8.50% N.A N.A NA NA

Expected retirement age of

employees (years)

58 58 58 58 58 58 58 58

Separation rate of employees – – 10.00% 10.00% N.A N.A 10.00% 10.00%

Rate of increase in

compensation

– – 9.00% 9.00% N.A N.A 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) Mortality

table.

iii) Leave policy:

a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be

availed by the employee against future sick leave; the sick leave balance is not available for encashment.

b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent

not availed by the employee is available for encashment on separation from the Company up to a maximum

of 120 days.

iv) As this is the fourth year of implementation of Accounting Standard (AS) –15 (Revised 2005), only

corresponding previous three year figure have been furnished.

v) The contribution to be made by the Company for funding its liability for gratuity during the financial year 2012–13

will be made as per demand raised by the fund administrator Life Insurance Corporation of India.

36 RELATED PARY TRANSACTIONS :

(a) Holding companies:

1 Essar Global Limited, Cayman Islands (ultimate holding company)

2 Essar Shipping & Logistics Limited, Cyprus (immediate holding company)



(c) Fellow subsidiaries / other related parties / affiliate where there have been transactions:

(b) Key management personnel:

1 Mr. Rajiv Agarwal, Whole-time Director (w.e.f. May 27, 2010)

2 Mr. Shailesh Sawa, Whole-time Director (w.e.f. July 24, 2010)

3 Mr. Kamla Kant Sinha, Whole-time Director

4 Capt. Subhas Das, Whole-time Director (Essar Bulk Terminal Limited)

5 Capt. Rajesh Beri, Whole-time Director (Essar Bulk Terminal Paradip Limited) ( w.e.f. October 17, 2011)

6 Capt. Deepak Sachdeva, Whole-time Director (Vadinar Oil Terminal Limited) ( w.e.f. October 18, 2011)

7 Mr. Girish Joshi, Manager (Vadinar Ports & Terminals Limited) ( w.e.f. October 18, 2011)

8 Mr. Sanjay Mehta, Managing Director (Essar Shipping Ports & Logistics Limited) (upto July 24, 2010)

9 Mr. A. R. Ramakrishnan, Whole-time Director (Essar Shipping Ports & Logistics Limited) (upto May 22, 2011)

10 Mr. V. Ashok, Whole-time Director (Essar Shipping Ports & Logistics Limited) (upto May 24, 2010)

11 Mr. A. K. Musaddy, Whole-time Director (Essar Logistics Limited - “ELL”) (till ELL ceased to be subsidary -

October 1, 2011

24 Essar Africa Holdings Limited

25 Essar Agrotech Limited

26 Essar Bulk Terminal (Paradip) Limited (till March 31, 2011)

27 Essar Energy Holdings Limited

28 Essar Energy Services Limited

29 Essar Engineering Services Limited

30 Essar Exploration South East Asia Limited

31 Essar Gulf FZE

32 Essar Heavy Engineering Services Limited

33 Essar Holdings Limited

34 Essar House Limited

35 Essar House Services Limited

36 Essar Information Technology Limited

37 Essar Infrastructure Holdings Limited

38 Essar Infrastructure Services Limited

39 Essar Investments Limited

40 Essar Logistics Holdings Limited

41 Essar Logistics Limited (w.e.f. October 1, 2010)

42 Essar Offshore Subsea Limited

43 Essar Oil Limited

44 Essar Oil Limited (E&P)

45 Essar Dredging Limited (till July 1, 2011)

46 Essar Oilfields Services Limited (w.e.f. October 1, 2010)

1 Essar Oilfield Services India Limited

(w.e.f. October 1, 2010)

2 Essar Power Gujarat Limited

3 Essar Power Limited

4 Essar Power M. P. Limited

5 Essar Project Management Consultancy Limited

6 Essar Projects (India) Limited

7 Essar Properties Limited

8 Essar Services India Limited

9 Essar Shipping & Logistics (Panama) Inc.

10 Essar Shipping (Cyprus) Limited

11 Essar Shipping Limited (w.e.f. October 1, 2010)

12 Essar Steel Algoma Inc.

13 Essar Steel India Limited (formerly known as

Essar Steel Limited)

14 Essar Telecom Retail Limited

15 Futura Travels Limited

16 Global Supplies FZE

17 Imperial Consultants & Securities Pvt. Limited

18 India Securities Limited

19 The Mobile Store Limited

20 Vadinar Power Company Limited

21 Aegis Limited

22 Arkay Holdings Limited

23 Bhander Power Limited

111



The details of transactions with related parties

(Rs. in lakhs)

Nature of transactions Holding company Fellow subsidiaries /

other related parties /

affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

INCOME

Fleet operating income




Essar Projects (India) Limited – – – 2,904.71 – – – 2,904.71

Essar Power Gujarat Limited – – – 3,012.49 – – – 3,012.49

Essar Power M. P. Limited – – – 5,809.38 – – – 5,809.38

Essar Oil Limited (E&P) – – – 2,148.63 – – – 2,148.63

Essar Power Limited – – – 12.78 – – – 12.78

Vadinar Power Company Limited – – – 374.42 – – – 374.42

Total – 168.45 – 89,518.41 – – – 89,686.86

Port services rendered and wharfage

charges

Essar Steel India Limited – – 1,571.95 877.00 – – 1,571.95 877.00

Essar Oil Limited – – 67,482.46 51,793.80 – – 67,482.46 51,793.80

Essar Logistics Limited – – 322.42 27.00 – – 322.42 27.00

Essar Shipping Limited – – 1,622.25 – – – 1,622.25 –

Essar Shipping (Cyprus) Limited – – 24.25 – – – 24.25 –

Essar Offshore Subsea Limited – – 21.58 – – – 21.58 –

Essar Heavy Engineering Services

Limited – – 22.64 45.00 – – 22.64 45.00

Total – – 71,067.55 52,742.80 – – 71,067.55 52,742.80

Cargo handling services rendered

Essar Logistics Limited – – 1,958.01 1,689.57 – – 1,958.01 1,689.57

Essar Steel India Limited – – 33,370.06 19,002.54 – – 33,370.06 19,002.54

Total – – 35,328.07 20,692.11 – – 35,328.07 20,692.12

Other income


Total – – 798.04 – – – 798.04 –

Equipment lease rental income


Total – – – 1.20 – – – 1.20

Interest income


Essar Oilfield Services India Limited – – – 2,575.96 – – – 2,575.96


Essar Oil Limited – – 809.88 984.92 – – 809.88 984.92


Essar Shipping (Cyprus) Limited – – 1.03 – – – 1.03 –

Essar Bulk Terminal Paradip Limited – – – 83.89 – – – 83.89

Total – 1,244.19 810.91 5,402.25 – – 810.91 6,646.45

Interest income on debenture

Imperial Consultants & Securities Pvt.

Limited – – – 1,740.06 – – – 1,740.06

Total – – – 1,740.06 – – – 1,740.06

Miscellaneous income



Essar Projects (India) Limited – – 6.14 – – – 6.14 –


Total – – 21.80 – – – 21.80 –



(Rs. in lakhs)



affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Aircraft usage charges reimbursed


Total – – – 900.00 – – – 900.00

Expenditure during construction -

income

Aegis Limited – – 27.46 10.10 – – 27.46 10.10


Futura Aviation Limited – – 77.00 – – – 77.00 –


Essar Investments Limited – – 541.75 – – – 541.75 –


Essar House Limited – – 22.08 – – – 22.08 –

Essar Infrastructure Services Limited – – 83.85 – – – 83.85 –

Essar Engineering Services Limited – – 427.32 – – – 427.32 –

Essar Power Gujarat Limited – – 19.65 – – – 19.65 –

Essar Services India Limited – – 138.79 – – – 138.79 –

Total – – 1,445.88 15.73 – – 1,445.88 15.73

Hire / demurrage charges

Essar Shipping & Logistics (Panama) Inc. – – – 518.46 – – – 518.46


Essar Projects (India) Limited – – – 118.09 – – – 118.09



Total – 2,223.90 456.44 636.54 – – 456.44 2,860.45

Freight / lease hire charges


Essar House Limited – – 11.04 99.75 – – 11.04 99.75


Essar Infrastructure Services Limited – – 41.85 327.94 – – 41.85 327.94


Total – – 201.80 881.50 – – 201.80 881.50

Fuel oil purchase / power


Bhander Power Limited – – 419.55 137.00 – – 419.55 137.00

Total – – 531.70 887.65 – – 531.70 887.65

Stores and spares-sale


Total – – – 176.00 – – – 176.00

Stores and spares - expenses



Limited – – – 1.00 – – – 1.00

Essar Steel India Limited – – 6.38 114.66 – – 6.38 114.66

Total – – 6.38 118.47 – – 6.38 118.47

Manning charges



Total – – – 11.48 – – – 11.48

O & M charges


Total – – 2,023.61 1,399.27 – – 2,023.61 1,399.27

Managerial remuneration

Mr. Sanjay Mehta – – – – – 23.28 – 23.28

Mr. A. R. Ramkrishnan – – – – 15.86 139.00 15.86 139.00

113



(Rs. in lakhs)



affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Mr. V. Ashok – – – – – 14.79 – 14.79 Mr. Rajiv Agarwal – – – – 215.87 91.60 215.87 91.60 Mr. Shailesh Sawa – – – – 113.61 97.48 113.61 97.48 Mr. Kamla Kant Sinha – – – – 156.38 116.34 156.38 116.34 Capt. Rajen Sachar – – – – 22.12 – 22.12 – Capt. Deepak Sachdeva – – – – 17.66 – 17.66 – Capt. Subhas Das – – – – 84.03 78.00 84.03 78.00 Capt. Rajesh Beri – – – – 39.81 – 39.81 – Mr. Girish Joshi – – – – 11.43 – 11.43 –

Total – – – – 676.77 560.49 676.77 560.49

Business centre feesEssar Infrastructure Services Limited – – 104.63 366.00 – – 104.63 366.00 Essar Agrotech Limited – – – 2.00 – – – 2.00 Aegis Limited – – 42.34 – – – 42.34 – Essar House Limited – – 23.93 66.00 – – 23.93 66.00

Total – – 170.90 434.00 – – 170.90 434.00

RentEssar Steel India Limited – – – 14.00 – – – 14.00 Essar House Limited – – 33.12 33.91 – – 33.12 33.91 Essar Infrastructure Services Limited – – 53.04 – – – 53.04 – Arkay Holdings limited – – 60.13 – – – 60.13 –

Total – – 146.29 47.91 – – 146.29 47.91

Repair and maintenanceEssar Steel India Limited – – – 3.46 – – – 3.46 Essar Projects (India) Limited – – 440.73 135.06 – – 440.73 135.06 Essar Agrotech Limited – – – 5.30 – – – 5.30 Essar Infrastructure Services Limited – – 76.73 22.26 – – 76.73 22.26 Essar Information Technology Limited – – – 18.71 – – – 18.71 Essar Heavy Engineering Services

Limited – – 2.50 – – – 2.50 –

Total – – 519.96 184.77 – – 519.96 184.77

Cargo handling expensesEssar Projects (India) Limited – – – 220.64 – – – 220.64 Total – – – 220.64 – – – 220.64 Travelling / lodging expensesFutura Travels Limited – – 278.70 765.40 – – 278.70 765.40 Arkay Holdings limited – – 0.37 0.37 – – 0.37 0.37 Essar Oil Limited – – – 16.94 – – – 16.94 Essar Infrastructure Services Limited – – – 0.13 – – – 0.13 Essar House Services Limited – – 0.05 – – – 0.05 – Essar Steel India Limited – – 2.30 11.00 – – 2.30 11.00

Total – – 281.42 793.85 – – 281.42 793.85

Professional / advisory fees /

agency / management feesIndia Securities Limited – – – 6.00 – – – 6.00 Essar Investments Limited – – 386.63 2,796.32 – – 386.63 2,796.32 Aegis Limited – – 138.54 53.43 – – 138.54 53.43 Essar Energy Services Limited – – 283.21 324.24 – – 283.21 324.24 Essar Engineering Services Limited – – 41.23 45.22 – – 41.23 45.22 Essar Logistics Limited – – – 12.00 – – – 12.00 Essar Oil Limited – – 614.16 722.99 – – 614.16 722.99 Essar Shipping Limited – – 31.51 – – – 31.51 – Essar Services India Limited – – 69.46 – – – 69.46 – Essar Information Technology Limited – – 3.77 63.66 – – 3.77 63.66

Total – – 1,568.51 4,023.86 – – 1,568.51 4,023.86



(Rs. in lakhs)



affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Bank Charges & Commitment fees

recovered


Essar Steel India Limited – – 210.10 – – – 210.10 –

Essar Heavy Engineering Services Limited – – 3.25 – – – 3.25 –

Total – – 216.90 – – – 216.90 –

Business promotion expenses


Total – – 1.92 – – – 1.92 –

Insurance


Total – – 6.06 – – – 6.06 –

Employee accommodation expenses


Total – – 12.51 – – – 12.51 –

Printing and stationery


Total – – 0.23 – – – 0.23 –

Staff welfare



Total – – 5.39 – – – 5.39 –


Futura Travels Limited – – – 201.78 – – – 201.78






Essar Power Gujarat Limited – – 290.04 5.68 – – 290.04 5.68

Essar Power M. P. Limited – – – 46.41 – – – 46.41

Essar Steel India Limited – – 14.38 1,555.60 – – 14.38 1,555.60

Subhas Das – – – – 14.58 3.88 14.58 3.88



Limited – – 3.25 – – – 3.25 –


Total – – 307.67 4,150.10 14.58 3.88 322.25 4,153.98

Jetty constructions and project

management expenses

Essar Projects (India) Limited – – 1,377.83 1,096.73 – – 1,377.83 1,096.73


Aegis Limited – – 32.25 – – – 32.25 –


Essar Engineering Services Limited – – 3.60 224.58 – – 3.60 224.58






Total – – 1,840.30 1,326.52 – – 1,840.30 1,326.52

115



(Rs. in lakhs)



affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Jetty construction expenses -

procurementEssar Steel India Limited – – 4.04 572.25 – – 4.04 572.25 Essar Oil Limited – – 6.63 132.00 – – 6.63 132.00 Essar Heavy Engineering Services

Limited – – – 1.27 – – – 1.27

Total – – 10.67 705.52 – – 10.67 705.52 Jetty construction expenses - saleEssar Steel India Limited – – 5.65 11.00 – – 5.65 11.00 Essar Heavy Engineering Services

Limited – – 127.30 44.00 – – 127.30 44.00

Essar Logistics Limited – – – 9.24 – – – 9.24 Total – – 132.95 64.24 – – 132.95 64.24 Lighterage costsEssar Logistics Limited – – – 3,300.00 – – – 3,300.00 Arkay Holdings limited – – 848.95 – – – 848.95 – Total – – 848.95 3,300.00 – – 848.95 3,300.00 Interest on loan / depositIndia Securities Limited – – – 24.00 – – – 24.00 Essar Logistics Limited – – – 13.00 – – – 13.00 Bhander Power Limited – – – 4.00 – – – 4.00 Total – – – 41.00 – – – 41.00 Interest on othersEssar Logistics Limited – – 290.00 – – – 290.00 – Total – – 290.00 – – – 290.00 – Interest on lease loanEssar Shipping & Logistics Limited – 1,781.89 – – – – – 1,781.89 Total – 1,781.89 – – – – – 1,781.89 Purchase of equity sharesEssar Bulk Terminal Paradip Limited – – – 2.00 – – – 2.00 Total – – – 2.00 – – – 2.00 Purchase of preference sharesEssar Steel India Limited – – 18,590.26 – – – 18,590.26 – Essar Logistics Limited – – 0.83 – – – 0.83 – Essar Bulk Terminal Paradip Limited – – – 6,600.00 – – – 6,600.00

Total – – 18,591.09 6,600.00 – – 18,591.09 6,600.00

Share subscriptionEssar Energy Holdings Limited – – – 5,486.25 – – – 5,486.25 Total – – – 5,486.25 – – – 5,486.25 Sale of investmentEssar Investments Limited – – 5.00 – – – 5.00 Total – – 5.00 – – – 5.00 – Advance for allotment of sharesEssar Oilfields Services Limited – – – 142,331.35 – – – 142,331.35 Essar Investments Limited – – – 10,075.59 – – – 10,075.59 Essar Bulk Terminal Paradip Limited – – – 9,050.00 – – – 9,050.00 Total – – – 161,456.94 – – – 161,456.94 Purchase of fixed assets Arkay Holdings Limited – – 33.00 – – – 33.00 – Essar Shipping & Logistics (Panama) Inc. – – – 583.06 – – – 583.06 Essar Projects (India) Limited – – 10,944.21 11,997.90 – – 10,944.21 11,997.90 Essar Logistics Limited – – 5,853.28 529.07 – – 5,853.28 529.07 Essar Engineering Services Limited – – 89.04 191.64 – – 89.04 191.64 Global Supplies FZE – – 4,499.99 – – – 4,499.99 – Total – – 21,419.52 13,301.67 – – 21,419.52 13,301.67 Share application money receivedEssar Shipping & Logistics Limited – 140,720.65 – – – – – 140,720.65 Total – 140,720.65 – – – – – 140,720.65



(Rs. in lakhs)



affiliate

Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Redemption of preference sharesEssar Shipping & Logistics Limited – 115,893.60 – – – – – 115,893.60 Total – 115,893.60 – – – – – 115,893.60 Preference dividend paidEssar Shipping & Logistics Limited – 1,759.57 – – – – – 1,759.57

Total – 1,759.57 – – – – – 1,759.57

Capital work in progress - CWIP Essar Engineering Services Limited – – 323.37 1,411.24 – – 323.37 1,411.24 Essar Projects (India) Limited – – 51,829.96 23,243.97 – – 51,829.96 23,243.97 Essar Logistics Limited – – – 7.27 – – – 7.27 Essar Project Management

Consultancy Limited – – 121.97 110.69 – – 121.97 110.69

Total – – 52,275.30 24,773.17 – – 52,275.30 24,773.17

CWIP and capital advances givenEssar Projects (India) Limited – – – 10,294.00 – – – 10,294.00 Total – – – 10,294.00 – – – 10,294.00 Loans and advances including

deposits givenEssar Shipping & Logistics Limited – 1,438.37 – – – – – 1,438.37 Essar Bulk Terminal Paradip Limited – – – 656.53 – – – 656.53 Essar House Limited – – 56.00 – – – 56.00 – Essar Infrastructure Services Limited – – 209.00 – – – 209.00 – Essar Oilfield Services India Limited – – – 100.00 – – – 100.00 Essar Oilfields Services Limited – – – 1,381.00 – – – 1,381.00 Total – 1,438.37 265.00 2,137.52 – – 265.00 3,575.90 Refund of share application moneyEssar Logistics Limited – – – 2,287.80 – – – 2,287.80 Total – – – 2,287.80 – – – 2,287.80 Loans and advances receivedEssar Global Limited – 449.20 – – – – – 449.20 India Securities Limited – – – 150.00 – – – 150.00 Essar Investments Limited – – – 317.00 – – – 317.00 Total – 449.20 – 467.00 – – – 916.20 Guarantees given by others on

behalf of Company Essar Steel India Limited – – 2,500.00 – – – 2,500.00 – Total – – 2,500.00 – – – 2,500.00 –

THE DETAILS OF OUTSTANDING BALANCES AS ON MARCH 31, 2012 (Rs. in lakhs)

Nature of balances Holding company Other related parties Key management

personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Sundry debtorsArkay Holdings Limited – – 1.82 3,479.03 – – 1.82 3,479.03 Essar Steel India Limited – – 5,492.39 3,479.03 – – 5,492.39 3,479.03 Essar Oil Limited – – 4,534.42 3,882.98 – – 4,534.42 3,882.98 Essar Projects (India) Limited – – 6.77 – – – 6.77 – Essar Heavy Engineering Services Limited – – 7.56 7.52 – – 7.56 7.52 Essar Power Gujarat Limited – – 294.26 – – – 294.26 – Essar Logistics Limited – – 2,211.93 – – – 2,211.93 – Essar Shipping Limited – – 1,693.71 – – – 1,693.71 – Essar Shipping (Cyprus) Limited – – 27.78 – – – 27.78 – Essar Dredging Limited – – 0.99 – – – 0.99 –

117





personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Essar Offshore Subsea Limited – – 2.40 – – – 2.40 – Essar Africa Holdings Limited – – 798.04 – – – 798.04 – Total – – 15,072.07 10,848.56 – – 15,072.07 10,848.56 Retention moneyEssar Projects Management Consultants

Limited

– – 12.50 – – – 12.50 –

Total – – 12.50 – – – 12.50 – Capital advancesEssar Projects (India) Limited – – 11,081.57 16,850.97 – – 11,081.57 16,850.97 Essar Project Management Consultancy

Limited

– – 38.88 26.38 – – 38.88 26.38

Essar Logistics Limited – – – 485.00 – – – 485.00 Global Supplies FZE – – – 466.80 – – – 466.80 Total – – 11,120.45 17,829.14 – – 11,120.45 17,829.14 Loans and advances including accrued

interest and deposits givenEssar House Limited – – 56.00 – – – 56.00 – Essar Oil Limited – – 7,187.69 9,131.00 – – 7,187.69 9,131.00 Essar Engineering Services Limited – – 105.68 – – – 105.68 – Essar Infrastructure Services Limited – – 209.00 – – – 209.00 – Essar Investments Limited – – 589.98 – – – 589.98 – Essar Projects (India) Limited – – 1,349.54 3,106.27 – – 1,349.54 3,106.27 Essar Shipping Limited – – 452.76 – – – 452.76 – Essar Services India Limited – – 2.28 – – – 2.28 – The Mobile Store Limited – – 0.35 – – – 0.35 – Essar Agrotech Limited – – 0.74 – – – 0.74 – Total – – 9,954.02 12,237.27 – – 9,954.02 12,237.27

Loans and advances receivedEssar Steel India Limited – – – 10,000.00 – – – 10,000.00 Total – – – 10,000.00 – – – 10,000.00 Advance towards EquityEssar Logistics Limited – – – 2,287.80 – – – 2,287.80 Essar Steel India Limited – – – 1,741.70 – – – 1,741.70 Total – – – 4,029.50 – – – 4,029.50 Security deposit receivedEssar Oil Limited – – – 650.00 – – – 650.00 Total – – – 650.00 – – – 650.00 Investment in sharesBhander Power Limited – – 104.22 104.22 – – 104.22 104.22 Total – – 104.22 104.22 – – 104.22 104.22 Sundry creditorsAegis Limited – – 57.86 36.45 – – 57.86 36.45 Arkay Holdings Limited – – 117.59 0.58 – – 117.59 0.58 Bhander Power Limited – – 258.99 14.46 – – 258.99 14.46 Futura Travels Limited – – 135.70 30.87 – – 135.70 30.87 Essar Information Technology Limited – – 0.45 8.80 – – 0.45 8.80 Essar Oil Limited – – 2.02 150.67 – – 2.02 150.67 Essar Projects (India) Limited – – 24,852.21 4,259.67 – – 24,852.21 4,259.67 Essar Engineering Services Limited – – 3.97 309.96 – – 3.97 309.96 Essar Heavy Engineering Services Limited – – 2.70 – – – 2.70 – Essar Project Management Consultancy Limited – – 121.07 – – – 121.07 – Essar House Limited – – 49.67 – – – 49.67 – Essar House Services Limited – – 0.05 – – – 0.05 – Essar Logistics Limited – – 6,244.20 1,544.16 – – 6,244.20 1,544.16 Essar Energy Services Limited – – – 242.67 – – – 242.67 Essar Engineering Services Limited – – 0.07 242.67 – – 0.07 242.67 Essar Shipping Limited – – 1,436.07 4,671.00 – – 1,436.07 4,671.00 Global Supplies FZE – – 159.79 114.02 – – 159.79 114.02

118 Annual Report 2011-12118 Annual Report 2011-12




personnel

Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Essar Investments Limited – – 711.45 0.77 – – 711.45 0.77 Essar Infrastructure Services Limited – – 189.31 0.11 – – 189.31 0.11 Essar Steel India Limited – – 18,947.65 300.77 – – 18,947.65 300.77 Essar Services India Limited – – 177.70 – – – 177.70 – Essar Agrotech Limited – – 0.68 – – – 0.68 – Total – – 53,469.20 11,927.63 – – 53,469.20 11,927.63 Guarantee given on behalf of othersEssar Oil Limited – – 10,400.00 10,400.00 – – 10,400.00 10,400.00

Total – – 10,400.00 10,400.00 – – 10,400.00 10,400.00

Guarantee availed for loan takenEssar Oil Limited – – 20,000.00 20,000.00 – – 20,000.00 20,000.00 Essar Steel India Limited – – 2,500.00 – – – 2,500.00 – Essar Shipping & Logistics Limited 30,000.00 30,000.00 – – – – 30,000.00 30,000.00 Total 30,000.00 30,000.00 22,500.00 20,000.00 – – 52,500.00 50,000.00

37. STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated February 8, 2011 and

February 21, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies

Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has fulfilled the conditions stipulated

in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included

in the consolidated financial statements.

(Rs. in lakhs )

Sr.

No.

Particulars Vadinar Oil

Terminal

Limited

Essar Bulk

Terminal

Limited

Essar Bulk

Terminal

(Salaya)

Limited

Essar Bulk

Terminal

Paradip

Limited

Essar

Paradip

Terminals

Limited

Vadinar Port

& Terminals

Limited

1 Capital 104,614.20 26,150.00 20,807.85 11,605.00 905.00 27,013.45

2 Reserves (35,906.99) 18,636.39 (53.45) (26.88) (8.58) 3,811.85

3 Total assets 306,877.82 197,073.32 65,839.66 49,241.89 1,275.02 118,327.07

4 Total liabilities 238,170.60 152,286.93 45,085.27 37,663.77 378.60 87,501.77

5 Details of investments (except

investments in subsidiaries)

0.54 104.22 – – – –

6 Turnover 51,639.98 42,534.14 – – – 20,738.16

7 Profit / (loss) before taxation (17,994.27) 20,352.85 (36.77) (19.50) (3.28) 5,654.59

8 Provision for taxation (12,549.05) 4,471.42 – – – 1,834.63

9 Profit after taxation (7-8) (5,445.22) 15,881.43 (36.77) (19.50) (3.28) 3,819.95

10 Dividend paid Nil (2,094.84) Nil Nil Nil Nil

38. The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year

classification as per the requirement of the revised schedule VI notified under the Companies Act, 1956.






Mumbai

May 30, 2012

119VADINAR OIL TERMINAL LIMITED


BOARD OF DIRECTORS

Rajiv Agarwal

Director

K. K. Sinha

Director

R. N. Bansal

Director

Mr. Shailesh Sawa

Director

Mr. K.C. Jani

(Nominee – IDBI Ltd.)

Ms. Manju Jain

(Nominee – IFCI Ltd.)

Capt. Deepak Sachdeva

Executive Director

COMPANY SECRETARY

Habib Jan

VADINAR OIL TERMINAL LIMITED

REGISTERED OFFICE

Essar Refinery Site

39 K.M. Stone

Okha Highway (SH– 25)

Khambhalia

Gujarat 361305

AUDIT COMMITTEE

R. N. Bansal

K. C. Jani

Rajiv Agarwal

Shailesh Sawa

AUDITORS


CORPORATE OFFICE

Essar House




Directors’ Report

Dear Members,

Your Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Accounts of the

Company for the year ended March 31, 2012.

A. FINANCIAL RESULTS:

The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:

(Rs. in lakhs)

Particulars For the Year Ended For the Year Ended March 31, 2012 March 31, 2011

Total income 53,143.61 47,825.58

Total expenditure 9,443.85 10,999.65

Earnings before exceptional items, extraordinary items, interest, 43,699.76 36,825.93 tax, depreciation and amortisation

Less: Interest & finance charges 23,674.24 23,883.10

Less: Depreciation 14,468.61 14,219.02

Profit / (Loss) before exceptional and extraordinary items and tax 5,556.91 (1,276.19)

Extraordinary/ exceptional items 23,551.18 –

Loss before tax (17,994.27) (1,276.19)

Less : Deferred Tax credit (12,549.05) –

Profit / (Loss) after tax (5,445.22) (1,276.19

B. REVIEW OF OPERATIONS:

Your Directors are pleased to inform you that your Company has successfully completed yet another year of full-fledged operations. During the year under review, your Company handled the following throughput:

Cargo handled Quantity in MMT

Crude Handling 12.2

Product Handling 11.1

– Jetty 8.3

– Road 1.4

– Rail 1.1

– Pipeline 0.3

Intermediate Handling 3.1

Total 26.4

The Marine division handled 67 Crude Oil Tankers and evacuated 12.18 million metric tonne (MMT) of crude by using its Single Point Mooring facility. Approximately 8.29 MMT of petroleum products were despatched from the Jetty through 204

vessels. Rail, Road and Pipeline operations evacuated 2.8 MMT of products during the year.

C. ACHIEVEMENTS:

During the year under review, your Company has achieved the following:

D. AWARD AND CERTIFICATIONS:

Directors’ Report



ISO 9001:2008 Quality Management

ISO 14001:2004 Environment Manage-

ISO 28000:2007 Security Management

OCIMF Terminal Baseline Criteria Certifi-cation by ABS.

E. HUMAN RESOURCE:

Your Company has achieved Hewitt Employee

Engagement score of 81%.

F. HOLDING COMPANY:

The Holding Company of your Company is Essar

Ports Limited.

G. SUBSIDIARY COMPANY:

Vadinar Ports & Terminals Limited (VPTL) continues

to be the subsidiary of your Company.

H. FIXED DEPOSITS:

The Company has not accepted any fixed deposits


I. DIRECTORS:

In accordance with the provisions of the Companies

Act, 1956 and the Articles of Association of the

Company, Mr. K. K. Sinha retires at the ensuing

Annual General Meeting of the Company and being

eligible, offers himself for re-appointment.

Capt. Deepak Sachdeva and Shri. Dipankar Pal

employment of the Company designated as Executive

Director and Managing Director respectively. Your

Company has received notices from members

proposing their names for the position of Directors.

J. AUDITORS:

Deloitte Haskins & Sells, Chartered Accountants,

Ahmedabad, who are the Statutory Auditors of

the Company hold office, in accordance with the

provisions of the Companies Act, 1956 upto the

conclusion of the forthcoming Annual General

Meeting and are eligible for re-appointment.

K. CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPOTION AND FOREIGN EXCHANGE

EARNING AND OUTGO:

The provisions of Section 217(1)(e) of the Companies

Act, 1956 read with Companies (Disclosure of

Particulars in the Report of Board of Directors), Rules

1988, relating to Energy Conservation and Technology

Absorption are not applicable to your Company.

The foreign exchange earnings and outgo position is

as under:

Total foreign exchange:

(1) Outgo : Rs. 36.01 lakhs

(2) Earned : Nil

L. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of

the Companies Act, 1956 the Board of Directors

hereby state that:

(a) in preparation of the annual accounts, the

applicable accounting standards have been

followed and there have been no material

(b) the Directors have selected such accounting

policies and applied them consistently and

made judgments and estimates that are

reasonable and prudent so as to give a true

and fair view of the state of affairs of the

(c) the Directors have taken proper and sufficient

care for the maintenance of adequate

accounting records in accordance with the

provisions of this Act for safeguarding the

assets of the Company and for preventing and

(d) the Directors have prepared the annual

accounts on a going concern basis.

M. PARTICULARS OF EMPLOYEES:

There are no employees of the Company who received

remuneration as prescribed under Section 217(2A) of

the Companies Act, 1956 read with the Companies

(Particulars of Employees) Rules, 1975, as amended.

N. ACKNOWLEDGEMENTS:

Your Directors thank the Financial Institutions and

Banks, Kandla Port Trust, Indian Coast Guards,

other business associates, shareholders and

employees for their continued support and co-

operation.


Capt. Deepak Sachdeva Shailesh Sawa

Mumbai Executive Director Director

August 30, 2012


Auditors’ Report

TO THE MEMBERS OF


VADINAR OIL TERMINAL LIMITED (the Company”) as

at 31st March, 2012, the Statement of Profit and Loss

and the Cash Flow Statement of the Company for

the 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.











for our opinion.

3. Attention is invited to Note 5 (B) (d) of the financial

statements detailing the recognition and measurement

of the borrowings covered by the Corporate Debt

Restructuring Scheme (the CDR”) as per the

accounting policy consistently followed by the

Company in the absence of specific guidance available

under the accounting standards referred to in Section

211(3C) of the Companies Act, 1956. Our opinion is

not qualified in respect of this matter.

4. As required by the Companies (Auditor’s Report)

Order, 2003 (CARO) issued by the Central Government

in terms of Section 227(4A) of the Companies Act,

1956, we enclose in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said

Order.

5. Read with our comments in paragraph 3 and the

Annexure referred to in paragraph 4 above, we report

as follows:

a) we have obtained all the information and



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

c) the Balance Sheet, the Statement of Profit and

Loss and the Cash Flow Statement dealt with by

this report are in agreement with the books of

d) in our opinion, the Balance Sheet, the Statement




e) in our opinion and to the best of our information

and according to the explanations given to us,

the said accounts give the information required

by the Companies Act, 1956 in the manner

so required and give a true and fair view in

conformity with the accounting principles

generally accepted in India:

i. in the case of the Balance Sheet, of the

state of affairs of the Company as at 31st

ii. in the case of the Statement of Profit and

Loss, of the loss of the Company for the

year ended on that date and

iii. in the case of the Cash Flow Statement, of

the cash flows of the Company for the year

ended on that date.


from the Directors as on 31st March, 2012 taken

on record by the Board of Directors, none of the

Directors is disqualified as on 31st March, 2012 from

being appointed as a director in terms of Section 274

(1) (g) of the Companies Act, 1956.



Khurshed Pastakia

Partner


Mumbai

May 29, 2012




(i) Having regard to the nature of the Company’s business / activities / result, clauses (vi), (xii), (xiii), (xiv), (xvi), (xviii), (xix) and (xx) of CARO are not applicable.


(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 explanation given to us, no material discrepancies were noticed on such verification.

(c) No fixed assets has been disposed of during the year, hence clause (i) (c) of the Order is not applicable to the Company.

(iii) In respect of its inventory:

(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 explanation 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.

(iv) In our opinion and according to the information and explanations given to us, 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. Hence, the provisions of clause (iii) (b) to (iii) (g) of the Order are not applicable to the Company.

(v) 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 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.

(vi) In our opinion and according to information and explanation given to us, there are no contracts or arrangements that need to entered into the register maintained in pursuance of Section 301 of the Companies Act, 1956.

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

maintained by the Company pursuant to the

Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records

a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(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, Income-tax, Service Tax, Custom Duty, Cess and other material statutory dues applicable to it with the appropriate authorities, except in case of Professional tax and service tax where certain instances of delay have been observed. As informed to us, the provisions for Investment Education and Protection Fund, Employee’s State Insurance,

not applicable to the Company during the year.

(b) There were no undisputed amounts payable in respect of above statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable, except Professional tax dues of Rs.7,000.

(c) There were no due pending to be deposited on account of any dispute in respect of Income-tax, Service Tax, Custom Duty and Cess as on 31st March, 2012

(x) The accumulated losses of the Company at the end of the financial year are less than fifty percent of its net worth and the Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. The Company has not borrowed any sums through debentures.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

( xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, the Company has not raised any funds on short term basis during the year.

(xiv) 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

Khurshed Pastakia Partner

(Membership No. 31544)Mumbai May 29, 2012



Balance Sheet as at March 31,, 2012

(Rs. in lakhs)

Particulars Note As at As at

No. March 31, 2012 March 31, 2011

(I) EQUITY AND LIABILITIES


(a) Share capital 3 104,614.20 104,614.20

(b) Reserves and surplus 4 (35,906.99) (30,461.77)

68,707.21 74,152.43



(b) Long-term provisions 6 78.81 118.11

222,452.14 204,016.59


(a) Trade payables 7 783.08 1,848.30

(b) Other current liabilities 8 14,933.83 14,169.33

(c) Short-term provisions 9 1.56 9.41

15,718.47 16,027.04

Total 306,877.82 294,196.06

(II) ASSETS


(a) Fixed assets

(i) Tangible assets 10A 236,126.23 242,805.52

(ii) Intangible assets 10B 3.14 5.23

(iii) Capital work-in-progress 11 33.00 269.01

(b) Non-current investments 12 19,148.00 19,148.00

(c) Deferred tax assets (net) 31 12,549.05 –

(c) Long-term loans and advances 13 17,877.78 9,810.20

(d) Other non-current assets 14 201.34 136.26

285,938.54 272,174.22

2 Current assets

(a) Current investments 15 0.54 –

(b) Inventories 16 544.90 2,123.44

(c) Trade receivables 17 8,662.69 3,882.98

(d) Cash and bank balance 18 186.76 3,872.92

(e) Short-term loans and advances 19 10,612.39 10,807.84

(f) Other current assets 20 932.00 1,334.66

20,939.28 22,021.84

Total 306,877.82 294,196.06


In terms of our report attached

For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants

Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa Partner Executive Director Director

Habib Jan Company Secretary

Mumbai Mumbai May 29, 2012 May 29, 2012



(Rs. in lakhs)

Particulars Note For the year ended For the year ended

No. March 31, 2012 March 31, 2011

I. NET REVENUE FROM OPERATIONS 21 51,639.98 46,441.38

II. Other income 22 1,503.63 1,384.20

III. Total revenue (I + II) 53,143.61 47,825.58

IV. EXPENSES:

Operating expenses 23 8,438.41 9,541.53

Administrative, establishment and other expenses 24 749.04 357.91

Employee benefits expenses 25 256.40 1,100.21

Total 9,443.85 10,999.65

V. Earning before exceptional items, extraordinary items,

interest, tax, depreciation and amortisation (III– IV) 43,699.76 36,825.93

VI. Finance cost 26 23,674.24 23,883.10

VII. Depreciation and amortisation expenses 10 14,468.61 14,219.02

VIII. Profit / (Loss) before exceptional and extraordinary

items and tax (V – VI – VII) 5,556.91 (1,276.19)

IX. Extraordinary / exceptional items (refer note 5 (B) (d)) 23,551.18 –

X Loss before tax (VIII– IX) (17,994.27) (1,276.19)

XI Tax expenses:

(1) Current tax – –

(2) Deferred tax credit 31 (12,549.05) –

XII Profit / (loss) for the year (5,445.22) (1,276.19)

XIII Earnings per share of Rs.10/- each fully paid up (in Rs.)

Basic and diluted 32 (0.52) (0.12)



For Deloitte Haskins & Sells For and on behalf of the Board of Directors


Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa

Partner Executive Director Director

Habib Jan

Company Secretary

Mumbai Mumbai

May 29, 2012 May 29, 2012

Statement of Profit and Loss for the year ended March 31, 2012


Notes forming part of financial statementsCash Flow Statement for the year ended March 31, 2012

(Rs. in lakhs)

Particulars For the year For the year

ended ended

March 31, 2012 March 31, 2011

I) CASH FLOW FROM OPERATING ACTIVITIES

Net Profit / (Loss) before taxes, extraordinary and exceptional items 5,556.91 (1,276.19)

Adjustment for:

Depreciation and amortisation 14,468.61 14,219.02

Excess provision of earlier year written back (12.39) (80.61)

Interest and finance expenses 23,674.24 23,883.10

Interest income – inter corporate deposit (809.88) (984.92)

Profit from sale of mutual fund units (327.65) (77.00)

Interest income from fixed deposits (14.35) (37.66)

Cash flow from operation before changes in working capital 42,529.52 35,637.91

Adjustment for (increase) / decrease in operating assets :

Inventories (61.58) (1,511.67)

Trade receivable (4,779.71) 839.96

Loans and advances (11,600.16) (6,260.33)

Adjustment for increase / (decrease) in operating liabilities :

Trade payables (1,141.83) 297.23


Income tax (paid) / refund 1,240.00 (1,226.85)

Net cash flow from operating activities (I) 26,186.24 27,776.25

II) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (5,282.69) (117.80)


Purchase of mutual fund units (43,000.00) (17,306.92)

Sale of mutual fund units 43,327.65 20,383.92

Investment in fixed deposit (65.08) (37.00)

Interest income from fixed deposits 11.47 37.96

Share application money received back 950.00 –

Repayment of loans given 1,776.00 1,537.18

Net cash from / (used in) investing activities (II) (1,305.21) 5,723.44

III) CASH FLOW FROM FINANCING ACTIVITIES


Repayment of term loans (13,396.81) (12,174.89)

Net cash used in financing activities (III) (28,566.66) (31,281.35)

127




Net (decrease) / increase in cash and cash equivalents (I+II+III) (3,685.62) 2,218.34


Cash and cash equivalents at the end of the year ( refer note 1) 187.30 3,872.92


NOTES

1. Reconciliation between closing cash and cash equivalents and

cash and bank balance

Closing cash and cash equivalents as per cash flow statement 187.30 3872.92

Less: mutual fund investments considered as cash

equivalents as per AS-3 (0.54) –

Closing cash and bank balance as per note no. 18 186.76 3872.92

2. Non cash transaction

During the year, the Company has converted inventory of

Rs. 1640.12 lakhs to capital assets.

3. Investment in units of mutual fund are considered as cash and

cash equivalents in the cash flow statement.

4. Cash flow statement has been prepared under the indirect

method as set out in the Accounting Standard 3 – "Cash Flow

Statement" referred to in Section 211 (3C) of the Companies Act, 1956.

See accompanying notes forming part of the financial statements.

Cash Flow Statement for the year ended March 31, 2012

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011




Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa


Habib Jan

Company Secretary

Mumbai Mumbai

May 29, 2012 May 29, 2012



1 CORPORATE INFORMATION

Vadinar Oil Terminal Limited is a company incorporated

under the Companies Act, 1956 and subsidiary of Essar

Ports Limited. The Company has an integrated oil terminal

under the Kandla Port Trust (KPT) waters situated at

Vadinar, Gujarat. It currently has 58 MMTPA of capacity for

handling crude oil and petroleum products. The facilities

consist of an off-shore single point mooring (SPM), one

product berth, crude oil tanks, refined petroleum product

and intermediate tanks and rail and road gantries. These

facilities presently cater to Essar Oil Limited's Oil refinery.

2 SIGNIFICANT ACCOUNTING POLICIES


These financial statements are prepared under the

historical cost convention, on accrual basis of accounting,

and are in accordance with generally accepted accounting

principles and in compliance with the applicable

Accounting Standards referred to in sub-section (3C) of

Section 211 of the Companies Act, 1956.

2.2. Use of Estimates

The preparation of financial statements requires estimates


amount of assets and liabilities on the reporting date and

the reported amounts of revenues and expenses during

the reporting period. Differences between the actual results

and estimates are recognised in the period in which the

results are known / materialised.

2.3 Revenue Recognition

Revenue on sale of products is recognised when the seller

has transferred to the buyer the property in the goods

for a price or when all significant risks and rewards of

ownership have been transferred to the buyer and the

seller retains no effective control of the goods transferred

to a degree usually associated with ownership and no

significant uncertainty exists regarding the amount of

consideration that will be derived from the sale of goods.

Revenue on transactions of rendering services is

recognised under the completed service contract method.

Performance is regarded as achieved when no significant

uncertainty exists regarding the amount of consideration

that will be derived from rendering the services.

2.4 Tangible Assets, Depreciation and Amortisation

Tangible assets are recorded at cost less accumulated

depreciation and impairment loss, if any. Cost is

inclusive of non-refundable duties and taxes, and cost

of construction including erection, installation and

commissioning expenses, borrowing costs, expenditure

during construction, inseparable know how costs, gains

or loss earned / incurred during the trial run and other

incidental costs, where applicable.

Depreciation on plant and machinery, buildings, pipelines

and tankages is provided as per straight line method at

the rates provided under Schedule XIV to the Companies

Act, 1956.

The assets to be handed over to Kandla Port Trust under

concession agreement are amortised over a period of

concession agreement of 30 years from 8 October 1997

or their useful life of assets (20 years, balance period of

concession from date of capitalisation of assets i.e. 1 July

2007) whichever is lower.

All other assets are depreciated under the written down

value method at the rates and in the manner prescribed in

Schedule XIV to the Companies Act, 1956. Assets costing

less than Rs.5,000/- per item are depreciated at 100% in

the year of acquisition.

Depreciation on additions / deductions to fixed assets

made during the period is provided on a pro-rata basis

from / upto the date of such additions / deductions, as the

case may be.

2.5 Intangible Assets and Amortisation

Intangible assets are recognised only when it is probable

that the future economic benefits that are attributable

to the asset will flow to the Company and the cost of

the asset can be measured reliably. Intangible assets

are stated at cost less accumulated amortisation and

impairment loss, if any.

Intangible assets are amortised over the best estimate of

their useful lives, subject to a rebuttable presumption that

such useful lives will not exceed ten years.

2.6 Capital Work in Progress and Expenditure during

Constructions


construction or development is shown under capital work–

in– progress.

Advances on capital account include progress / milestone

based payments made under the contracts for projects,

assets under construction and other capital advances until

the same are allocated to fixed assets and other accounts,

as applicable and the same is shown under long term

loans and advances.

2.7 Borrowing Cost



are amortised over the tenure of the loan and capitalised

as a part of cost of such asset till such time that the

of profit and loss thereafter. A qualifying asset is one that

necessary takes substantial period of time to get ready for

the intended use.

Costs in connection with the borrowing of funds to the

129




extent not directly related to the acquisition of fixed assets

are amortised and charged to the Statement of Profit and

Loss, over the tenure of the loan.


Transactions denominated in foreign currency are

accounted at the rate prevailing on the transaction

date. Monetary items denominated in foreign currency

are translated at the rate prevailing at the balance

sheet date. Gains / losses on conversion / translation /

settlement of foreign currency transactions are recognised

in the statement of profit and loss or expenditure during

construction, as applicable.

2.9 Taxes on Income

Current tax are provided as per the provisions of the

Income tax Act, 1961.

The tax effect of timing differences resulting between

taxable income and accounting income and are capable of

reversal in one or more subsequent periods are recorded

as a deferred tax asset or deferred tax liability. They are

measured using the substantively enacted tax rates and

tax regulations as at the balance sheet date.

Deferred tax assets arising on account of brought forward

losses and unabsorbed depreciation under tax laws are

recognised, only if there is virtual certainty of its realisation,

supported by convincing evidence. Deferred tax assets on

account of other timing differences are recognized only to

the extent there is reasonable certainty of its realisation.


Assets

Provisions are recognised in the accounts for present

obligations arising out of past events and would probably

require an outflow of economic resources, the amount of

which can be reliably estimated.


obligations that arise from past events, the existence

of which will be confirmed by the occurrence or non

occurrence of one or more uncertain future events not

wholly within the control of the Company or a present

obligation that is not recognised because a reliable

estimate of the liability cannot be made or likelihood of an

outflow of resources is remote. Contingent assets are not

recognised or disclosed in the financial statements.


The Company assesses on each balance sheet date

whether there is any indication that an asset may be

impaired. If any such indication exists, the Company

estimates the recoverable amount of the asset. If such

recoverable amount of the asset is less than its carrying

amount, the carrying amount is reduced to its recoverable

amount. The reduction is treated as an impairment loss

and is recognised in the statement of profit and loss. If

at the balance sheet date, there is an indication that a

previously assessed impairment loss no longer exists,

the recoverable amount is reassessed and the asset

is reflected at the recoverable amount but limited to the

carrying amount that would have been determined (net of

depreciation / amortisation) had no impairment loss been

recognised in prior accounting periods.

2.12 Inventories

Stores and Spares: Valued at lower of cost and net

realisable value. Cost is determined on a moving weighted

average basis.

Net realisable value is the estimated current procurement

price in the ordinary course of the business.

2.13 Other Income

Interest income is accounted on accrual basis. Dividend

income is accounted for when the right to receive it is

established.

2.14 Investments

Long term investments are stated at cost. However, in

the opinion of management, when there is an other than

temporary decline in the value of long term investments

with reference to their fair / market value, the carrying

amount is reduced to recognise that decline. Current

investments are carried at lower of cost or market value.


(a) Contribution to recognised provident fund,

which is a fixed percentage of eligible

employees’ salary is charged to the statement

of profit and loss.

(b) The liability for gratuity is actuarially determined

at year end and funded to Life Insurance

Corporation of India to the extent demanded

by them and balance taken to provisions.

(c) The contribution towards superannuation,

funded by payment to Life Insurance

Corporation of India, is a fixed percentage

of the salary of eligible employees under a

defined contribution plan and is charged to

statement of profit and loss.

(d) Provision for all accumulated compensated

absences of eligible employees is based on an

independent actuarial valuation.



3 SHARE CAPITAL

(a) Particulars As at March 31, 2012 As at March 31, 2011

Number Rs. in lakhs Number Rs. in lakhs

Authorised


4,000,000,000 400,000.00 4,000,000,000 400,000.00



1,046,142,000 104,614.20 1,046,142,000 104,614.20

(b) Reconciliation of the shares outstanding

at the beginning and at the end of the

reporting period




At the beginning of the year 1,046,142,000 104,614.20 1,046,142,000 104,614.20


Outstanding at the end of the year 1,046,142,000 104,614.20 1,046,142,000 104,614.20

(c) Terms / rights attached to shares

The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible


shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible

to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their

shareholding.

(d) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the

shareholding more than 5% shares in the Company


Number Rs. in lakhs % Number Rs. in lakhs %

a) Equity shares of Rs.10/-

each Essar Ports

Limited, the holding

company 1,046,142,000 104,614.20 100% 1,046,142,000 104,614.20 100%

1,046,142,000 104,614.20 100% 1,046,142,000 104,614.20 100%

4 RESERVE AND SURPLUS

(Rs. in lakhs)

Particulars As at As at

March 31, 2012 March 31, 2011

Deficit of statement of profit and loss

Opening balance (30,461.77) (29,185.58)

Less : Loss for the year (5,445.22) (1,276.19)

Closing balance (35,906.99) (30,461.77)

131




5 LONG TERM BORROWINGS

(Rs. in lakhs)

Particulars Non current portion Current portion

As at As at As at As at

March 31, March 31, March 31, March 31,

2012 2011 2012 2011

(A) Secured long term borrowings

(i) From Banks

(a) Rupee term loans 62,979.18 69,902.18 6,923.00 6,124.00

(b) Funded interest facilities:

(including funding of interest for the

period October 1998 to December

2003) : 112,225.40 95,126.47 1,795.83 1,561.07

Less:

Amount not payable if relevant funded

interest is paid on or before 31.03.2012 (41,528.20) (42,812.21) – –

Total Funded interest facilities from banks 70,697.20 52,314.26 1,795.83 1,561.07

Total secured borrowings from

banks (a + b) 133,676.38 122,216.44 8,718.83 7,685.07

(ii) From Financial Institutions

(a) Rupee term loans 46,429.47 51,638.97 5,209.50 5,436.00

(b) Funded interest facilities:

(including funding of interest for

the period October 1998 to

December 2003) : 66,875.26 55,425.92 280.79 275.74

Less:

Amount not payable if relevant funded

interest is paid on or before 31.03.2012 (24,607.78) (25,382.85) – –

Total Funded interest facilities from

Financials Institutions 42,267.48 30,043.07 280.79 275.74

Total secured borrowings from

financial institutions (a + b) 88,696.95 81,682.04 5,490.29 5,711.74


Other Current Liabilities” (Note 8) – – (14,209.12) (13,396.81)

Total long term borrowings (I + ii) 222,373.33 203,898.48 – –

(B) Notes:

(a) Term loans and funded interest facilities from banks and financial institutions (other than (b) below) are

secured / to be secured by first ranking security interests on all movable and immovable assets, present and

future, pledge of shares of the Company held by the promoters and persons associated with the promoters/

Company, security interest on rights, titles and interests under each of the project documents, trust and

retention accounts / sub-accounts, insurance policies related to the terminal project, immovable properties

of Essar Oil Ltd (EOL) pertaining to terminal project, guarantee by the promoters and guarantee of holding

company for Rs. 25,000 lakhs (previous year Rs. 25,000 lakhs) and pledge of shares of the Company held by

the holding company.

(b) The facilities provided by a financial institution upto Rs. 20,000 lakhs (previous year Rs. 20,000 lakhs) and

interest and other charges thereon are secured by a guarantee of EOL for Rs. 20,000 lakhs. To secure obligation

of EOL pursuant to the said guarantee, security is created by first mortgage and charge on immovable and

movable properties pertaining to the EOL refinery project, pledge over shares of EOL and an assignment of the

project contracts relating to EOL refinery project, the trust and retention accounts pertaining thereto.



(c) Secured Master Restructuring Agreement (MRA) Rupee Term loan (including funded interest) from bank

carrying average interest cost of 10% to 11.50% per annum with quarterly installments payment upto June

2027.

(d) Recognition of Facility Stoppage and Facility E

The Master Restructuring Agreement (‘MRA’) dated 17 December 2004 entered pursuant to Corporate Debt

Restructuring Scheme, gives an option, subject to consent of its lenders, to the Company to prepay funded

interest loans (FS loan) of Rs. 86,908.16 lakhs (previous year Rs. 86,908.16 lakhs) at any point of time

during their term at a reduced amount computed in accordance with mechanism provided in the MRA or in

full, by one bullet payment in March, 2026. Interest on FS loan was not payable if FS loan was prepaid by

24 April 2012 and therefore considering the plans to prepay FS loan, interest liability on FS loan (Facility E)

was earlier considered as contingent liability and now recognised as loan as the same is funded.

In order to reflect the substance of the above, in terms of presentation in the balance sheet, an amount of

Rs. 66,135.98 lakhs (previous year Rs. 68,195.06 lakhs) being the amount not payable as at balance sheet

date has been presented as deduction from funded interest facilities under secured loans / borrowings to

reflect the present obligation on the balance sheet date. The changes in the present obligation of the said

FS loan subsequent to capitalisation of the Terminal Project till each reporting date is treated as a finance

cost item in the statement of profit and loss.

Facility E of Rs 24,179.58 lakhs is presented in the balance sheet under funded Interest facilities from banks

and financial institutions under long term borrowings, with corresponding recognition of Rs 807.34 lakhs,

being interest attributable to construction period, being added to fixed assets and balance as exceptional

Item in the statement of profit and loss.

6 LONG TERM PROVISIONS

(Rs. in lakhs)




2012 2011 2012 2011

Provision for employee benefits (refer note 37 (C))

(i) Provision for compensate absences 72.09 96.66 1.56 9.41

(ii) Provision for gratuity (refer note 37 (C)) 6.72 21.45 – –

Total 78.81 118.11 1.56 9.41


short term provisions” (refer note 9) – – (1.56) (9.41)

Total long term provisions 78.81 118.11 – –

7 TRADE PAYABLES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Trade payable (refer note 33) 783.08 1,848.30

Total 783.08 1,848.30

133




8 OTHER CURRENT LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Current maturities of long term borrowings (refer note 5 (a), (b), (c)

for details of security, interest and guarantee) 14,209.12 13,396.81

Interest Accrued but not Due on Borrowings 208.58 239.36

Payable for Capital Expense (refer note 33) 418.80 310.47

Other Liabilities (Including Statutory dues for Tax deducted at Source,

Provident Fund and dues to employees) 97.33 222.69

Total 14,933.83 14,169.33

9 SHORT TERM PROVISIONS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Provision for employee benefits (refer note 6)

Provision for compensated absences 1.56 9.41

Total 1.56 9.41



10

FIX

ED

AS

SE

TS

(Rs.

in lakhs)

Sr.

D

escrip

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f A

sset

As a

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Dis

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No.

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during

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/

Marc

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1,

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year

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/

Marc

h 3

1,

Marc

h 3

1,

Marc

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1,

2011

the y

ear

sale

s

2012

2011

sale

s

20

12

2

01

2

20

11

(A)

Tan

gib

le A

ssets

1

Land

4

.52

–

–

4.5

2

–

–

–

–

4.5

2

4.5

2

2

Build

ings

6,3

89.0

1

85.3

5

–

6,4

74.3

6

757.6

7

214.5

7

–

97

2.2

4

5,5

02

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5

,63

1.3

4

3

Pla

nt

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quip

ments

(refe

r note

s b

elo

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286,6

46.7

1

7,8

78.5

2

–

294,5

25.2

3

49,6

19.4

3

14,3

94.7

3

– 6

4,0

14

.16

2

30

,51

1.0

7

23

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4

Furn

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147.6

1

–

–

147.6

1

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0

16.3

2

–

71

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7

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9

92

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5

Offi

ce E

quip

ments

1

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–

106.1

9

54.1

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19.8

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135




11 CAPITAL WORK-IN-PROGRESS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Capital work-in-progress 33.00 269.01

Total 33.00 269.01

12 NON CURRENT INVESTMENT

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Investment (at cost)

Unquoted:

(i) Traded:

Investment in subsidiary:

19,14,80,000 (P.Y. 19,14,80,000) equity shares of Rs. 10/- each

fully paid up of Vadinar Ports & Terminals Ltd. 19,148.00 19,148.00

Total 19,148.00 19,148.00

13 LONG TERM LOANS AND ADVANCES

(Rs. in lakhs)




2012 2011 2012 2011

Unsecured Considered Good

(A) Security deposit 216.00 150.00 – –

(B) Loans & advances to related parties

(refer note 38) 4,571.12 6,955.49 2,675.30 2,768.27

(C) Advance for expenses to related parties

(refer note 38) 12,399.89 2,375.33 2,951.09 2,627.46

(D) Other loans & advances

Prepaid expense 690.77 329.38 1,802.35 548.56

Total 17,877.78 9,810.20 7,428.73 5,944.28


short term loans and advances” (refer note 19) – – (7,428.73) (5,944.28)

Total long term loans and advances 17,877.78 9,810.20 – –



14 OTHER NON CURRENT ASSETS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Balance with Banks:

(i) Margin money

– In Time Deposits (lien marked against guarantee) 102.08 37.00

(ii) Deposits in escrow account** 99.26 99.26

Total 201.34 136.26

** As per the requirement of master restructuring agreement for secured term loans, there is restrictions on

operation of escrow account by the company.

15 CURRENT INVESTMENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Current investment – unquoted – at cost

Investments in mutual funds units 0.54 –

Total 0.54 –

Note:

Current investment in mutual fund units is in nature of cash and cash equivalent” (as defined in as 3 cash flow

statements) considered as part of cash and cash equivalent in the cash flow statement.

16 INVENTORIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Stores & spares (valued at lower of cost or net realisable value) 544.90 2,123.44

Total 544.90 2,123.44

17 TRADE RECEIVABLES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(a) Outstanding for more than six months from its due date 2,139.58 –

(b) Others 6,523.11 3,882.98

Total 8,662.69 3,882.98

137




18 CASH AND BANK BALANCE

(Rs. in lakhs)

Current portion


March 31, 2012 March 31, 2011

Cash and cash equivalent

(i) Cash on hand – 0.08

(ii) in Current accounts 186.76 3,872.84

Total 186.76 3,872.92

19 SHORT TERM LOANS AND ADVANCES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Loans & advances to related parties (refer note 13) 2,675.30 2,768.27

(B) Advance for expenses to related parties (refer note 13) 2,951.09 2,627.46

(C) Other loans and advances

(i) Advances to vendor 393.45 1,067.90

(ii) Balance with excise department 400.75 168.96

(iii) Advance income tax (net of provision) 2,385.86 3,625.86

(iv) Other advance 3.59 0.84

(v) Prepaid expense (refer note 13) 1,802.35 548.56

Total 10,612.39 10,807.84

20 OTHER CURRENT ASSETS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Income receivable 198.59 174.18

(B) Interest accrued on loans and advances given to related parties 167.60 205.86

(C) Interest accrued on bank deposits 4.63 1.76

(D) Share application money – 950.00

(E) Others receivable 561.18 2.86

Total 932.00 1,334.66



21 REVENUE FROM OPERATIONS

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Sale of services (refer note (i) below) 47,948.98 46,441.38

(B) Other operating income (refer note (ii) below) 3,691.00 –

Total 51,639.98 46,441.38

Notes:

(i) Sale of services comprises:

– Crude and petroleum product storage service 34,625.73 –

– Crude and petroleum product handling services 10,556.61 43,648.19

Total 47,948.98 46,441.38

(ii) Other Operating Income

– Technical and facility sharing service income 3,691.00 –

Total 3,691.00 –

Total (i) + (ii) 51,639.98 46,441.38

22 OTHER INCOME

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Interest income – inter corporate deposits 809.88 984.92

(B) Interest income – from banks 14.35 37.66

(C) Interest on income tax refund 181.36 174.18

(D) Profit on sale of mutual fund units (net) 327.65 77.00

(E) Other non-operative Income – 1.63

(F) Excess provision written back 12.39 80.61

(G) Foreign exchange variation gain 5.97 28.20

(H) Insurance claim 152.03 –

Total 1,503.63 1,384.20

139




23 OPERATING EXPENSES

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(B) Hire charges 1,130.93 1,856.03

(C) Lease rent 1,374.12 1,366.42

(D) Operation and maintenance service expense 1,343.13 1,453.15

(E) Consumption of stores and spares 208.65 241.46

(F) Manning – management expense 632.89 1,023.06

(G) Repairs & maintenance 152.62 57.06

(H) Power & fuels 127.59 137.76

(I) Insurance expense 676.47 565.44

(J) Other operating expense 25.38 47.95

Total 8,438.41 9,541.53

24 ADMINISTRATIVE, ESTABLISHMENT AND OTHER EXPENSE

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Remuneration to the statutory auditors:

(i) Auditor 12.50 13.95

(ii) Other Assurance services 16.31 29.40

(iii) Reimbursement of expenses 1.05 0.70

(B) Consultancy and professional charges 446.24 104.32

(C) Travelling expense 129.34 93.67

(D) Communication expense 17.14 42.03

(E) Office rent expense 53.03 –

(F) Rates & taxes 24.22 28.36

(G) Other expense 49.21 45.48

Total 749.04 357.91

25 EMPLOYEE BENEFIT EXPENSE

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Salaries, wages and allowances 242.79 1,031.56

(B) Contribution to provident fund and other funds (refer note 37 ) 10.97 64.91

(C) Staff welfare expense 2.64 3.74

Total 256.40 1,100.21



26 FINANCE COST

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Interest expense 23,652.11 23,874.01

(B) Other borrowing cost 22.13 9.09

Total 23,674.24 23,883.10

27 COMMITTED LIABILITY FOR FUTURE LEASE PAYMENT

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Payable not later than 1 year 308.88 218.36

(B) Payable later than 1 year and not later than 5 years 1,208.30 873.43

(C) Payable later than 5 years 5,063.12 5,230.58

Total 6,580.30 6,322.37

28 CONTINGENT LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Guarantee given by company on behalf of others 10,400.00 10,400.00

(B) Claims against the company not acknowledged as debt 243.74 1,024.59

(C) Interest on facility E on principal amount of facility stoppage

as per master restructuring agreement [refer note 5 (B) (d)] – 18,780.22

(D) Estimated amount of contracts remaining to be executed on

capital account and not provided for 35.88 –

Total 10,679.62 30,204.81

29 CIF VALUE OF IMPORTS (INCLUDING GOODS IN TRANSIT)

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Capital goods 9.92 34.69

(B) Components and spares parts 78.83 1,521.63

Total 88.74 1,556.33

141




30 EXPENDITURE IN FOREIGN CURRENCY

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Traveling expense 8.40 28.78

(B) Repairs and maintenance – 55.27

(C) Insurance expense 23.87 31.83

(D) Agency charges 3.20 –

(E) Fees and subscriptions 0.54 –

Total 36.01 115.88

31 DEFERRED TAX

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011


Depreciation of fixed assets (timing difference) 20,291.10 14,975.02

(A) 20,291.10 14,975.02

Deferred tax assets

On unabsorbed depreciation 32,840.15 14,975.02

(B) 32,840.15 14,975.02

Net deferred tax asset [ (B) – (A) ] 12,549.05 –

The Company has recognized net deferred tax asset of Rs. 12,549.05 lakhs on unabsorbed depreciation on the

basis of estimate of contracted revenue for the period for which agreement has been entered into by it.


(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

Net (loss) for the year (5,445.22) (1,276.19)

Number of equity share at the beginning and end of the year 1,046,142,000 1,046,142,000

Face value per share (in Rs.) 10.00 10.00

Basic and diluted earnings earning per share – (in Rs.) (0.52) (0.12)

33 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT :

The Company has received intimations from certain suppliers regarding status under micro, small and medium

unpaid at the end of the accounting year in respect of such suppliers.

34 SEGNMENTAL REPORTING :

The Company operates in only one business segment of ports and terminals business and only one geographical

segment i.e. India.



35 EXPOSURE IN FOREIGN CURRENCY

The Company has not entered into any forward / option exchange contract to hedge its foreign currency exposure.

The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are

given below:

Amount payable / receivable on account of foreign currency :

Amount Rs. in lakhs Amount in Foreign Currency in lakhs

Particulars As at As at As at As at

March 31, March 31, Currency March 31, March 31,

2012 2011 2012 2011

– 66.13 GBP – 0.84

– 2.74 SGD – 0.08

Total – 121.93 – – 1.77

36 CONSUMPTIONS OF IMPORTED AND INDIGENOUS SPARES PARTS

Particulars For the year ended For the year ended

March 31, 2012 March 31, 2011

Rs. in lakhs % Rs. in lakhs %

Imported 100.39 48.11 231.54 16.95

Indigenous 108.26 51.89 1,134.88 83.05

Total 208.65 100.00 1,366.42 100.00

37 EMPOYEE BENEFITS :

The Company has various employee benefits as under:


a. Provident fund

b. Superannuation fund

During the year, the Company has recognised the following amounts in the statement of profit and loss:

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(i) Employer’s contribution to provident fund 21.80 60.95

(ii) Employer’s contribution to superannuation fund 0.31 5.08

Total 22.11 66.03

The above amounts are included in contribution to staff provident and other funds. (refer note 25 (b) )


a. Contribution to gratuity fund

b. Provision for compensated absences (CA)

143




In accordance with Accounting Standard-15 (Revised 2005), relevant disclosures are as under:

(A) Changes in present value of defined benefit obligation

(Rs. in lakhs)

Particulars Gratuity (funded) CA (non funded)

As at As at As at As at March 31, March 31, March 31, March 31, 2012 2011 2012 2011

(i) Present value of defined benefit obligation at the beginning of the year 64.85 34.64 58.32 70.05

(ii) Current service cost 15.40 14.09 16.39 1.10

(iii) Interest cost 5.12 2.48 4.56 2.52

(iv) Plan amendments – 11.11 – –

(v) Acquisitions / (transfers) (17.73) – (15.41) (34.04)

(vi) Benefits paid (1.69) (5.77) (2.64) (7.43)

(vii) Actuarial (gain) / loss on obligations (35.23) 8.30 (35.34) 26.12

Present value of defined benefit obligation at the end of the year 30.72 64.85 25.88 58.32

(B) Changes in the fair value of plan assets(Rs. in lakhs)



(i) Fair value of plan assets at the beginning of the year 42.67 97.57 – –

(ii) Acquisition adjustment / transfer In / (transfer out) (21.88) (61.87) – –

(iii) Expected return on plan assets 3.56 8.49 – –

(iv) Actuarial gains / (losses) 1.33 (6.17) – –

(v) Contributions by the employer – 10.42 – (7.43)

(vi) Benefits paid (1.69) (5.77) – –

Fair value of plan assets at the end of the year 23.99 42.67 – (7.43)

(C) Amount recognised in the Balance Sheet(Rs. in lakhs)



(i) Present value of defined benefit obligation at the end of the year 30.72 64.85 25.88 58.32

(ii) Fair value of plan assets at the end of the year 24.00 42.67 – –

(iii) Funded status Surplus / (deficit) (6.72) (22.18) (25.88) (58.32)

(Liability) / asset recognised in the balance sheet (6.72) (21.45) (25.88) (58.32) (refer note 7 – long term provisions)



(D) Expenses recognised in the Statement of Profit and Loss

(Rs. in lakhs)



(i) Current service cost 15.40 14.10 16.40 1.09

(ii) Interest cost 5.13 2.48 4.56 2.52

(iii) Expected return on plan assets (3.56) (8.49) – –

(iv) Past service costs 0.73 10.38 – –

(v) Net actuarial (gain) / loss recognised

in the period (36.57) 14.46 (35.34) 26.12

Total expenses recognised in the

statement of profit and loss (18.87) 32.93 (14.38) 29.73

Included in contribution to provident

and other funds (refer note 25 –

employee benefit expense)

(E) Category of plan assets

The Company’s plan assets in respect of gratuity are funded through the group schemes of the Life

Insurance Corporation of India.

(F) Experience History

Gratuity:

(Rs. in lakhs)

Particulars As at As at As at As at As at

March 31, March 31, March 31, March 31, March 31,

2012 2011 2010 2009 2008

(i) Defined benefit obligation (30.72) (64.85) (34.64) (25.16) N.A.

(ii) Plan assets at the end

of the period 24.00 42.67 97.57 62.84 N.A.

(iii) Funded status (6.72) (22.18) 62.93 37.68 N.A.

(iv) Experience gain / (loss)

adjustments on plan liabilities 33.66 (9.37) 1.19 15.11 N.A.

(v) Experience gain / (loss)

adjustments on plan assets 1.33 (6.17) (9.39) 0.17 N.A.

(vi) Actuarial gain / (loss) due to

change on assumptions 1.57 1.07 (3.51) – N.A.

145




Compensated Absences:(Rs. in lakhs)

Particulars As at As at As at As at As at

March 31, March 31, March 31, March 31, March 31,

2012 2011 2010 2009 2008

(i) Defined benefit obligation (25.88) (58.32) (70.05) (51.27) N.A.

(ii) Plan assets at the end of

the period – – – – N.A.

(iii) Funded status (25.88) (58.32) (70.05) (51.27) N.A.

(iv) Experience gain / (loss)

adjustments on plan liabilities 33.92 (27.17) 24.19 – N.A.

(v) Experience gain / (loss)

adjustments on plan assets – – – – N.A.

(vi) Actuarial gain / (loss) due to

change on assumptions 1.42 1.06 (8.00) – N.A.


In accordance with Accounting Standard (AS) 15 (Revised 2005), actuarial valuation as at the year-end was

done in respect of aforesaid defined benefit plans based on the following assumptions:

i) General Assumption(Rs. in lakhs)


For the year For the year For the year For the year

ended ended ended ended


2012 2011 2012 2011

(i) Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%

(ii) Rate of return on plan assets

(for funded scheme) 8.50% 8.50% N.A. N.A

(iii) Expected retirement age of

employees (years) 58 58 58 58

(v) Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality table.

iii) Leave Policy

a) Leave balance as at the valuation date and each subsequent year following the valuation date to the

extent not availed by the employee (maximum to the extent of 120 days) is available for encashment on

separation from the Company.

b) As this is the fourth year of implementation of Accounting Standard (AS 15) (Revised 2005), only

corresponding previous three years figures have been furnished.



38 RELATED PARY TRANSACTIONS :

A Holding Company

Essar Global Limited, Cayman Island, (ultimate holding company)

Essar Shipping & Logistics Limited, Cyprus, (intermediate holding company)

Essar Ports Limited, (immediate holding Company since 30 September 2010) (formerly known as Essar Shipping

Ports & Logistics Limited)

Essar Ports & Terminals Limited (immediate holding company till 30 September,2010)

B Subsidiary company

Vadinar Ports & Terminals Limited

C Other related parties / affiliated where there have been transactions

Aegis Limited

Arkay Holdings Limited

Essar Agrotech Limited

Essar Bulk Terminal (Salaya) Limited

Essar Bulk Terminal Limited

Essar Bulk Terminal Paradip Limited

Essar Energy Services Limited

Essar Engineering Services Limited

Essar House Limited

Essar Information Technology Limited

Essar Infrastructure Services Limited

Essar Investments Limited

Essar Logistics Limited

Essar Oil Limited

Essar Paradip Terminals Limited

Essar Projects (India) Limited

Essar Shipping Limited

Futura Travels Limited

Global Supply FZE

Essar Constructions (India) Limited

Essar Services India Limited

D Key Management Personnel

Capt. Deepak Sachdeva – Executive Director – (w.e.f. 18.10.2011)

147




(Rs. in lakhs)

Nature of Transaction Holding companies Other related Key management

and subsidiary company parties personnel Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

INCOME

Port and terminal and technical service income


Technical service income / administrative charges recovered

Essar Bulk Terminal (Salaya) Limited – – – 759.42 – – – 759.42


Essar Bulk Terminal Limited – – – 502.57 – – – 502.57

Essar Paradip Terminals Limited – – – 200.85 – – – 200.85


Sub Total – 840.66 – 1,865.96 – – – 2,706.62

Lease income


Facility usage income


O & M and technical services recovered


Inter corporate deposit-(I.C.D.) interest income




EXPENSES

Rent / lease charges


Essar House Limited – – 11.04 99.75 – – 11.04 99.75



Sub Total 1,213.09 1,326.57 77.98 452.78 – – 1,291.07 1,779.35

Operational & maintenance charges


Hire charges

Essar Ports Limited * 1,086.30 1,806.75 – – – – 1,086.30 1,806.75

Reimbursement of expense


Essar Ports Limited * 221.67 32.50 – – – – 221.67 32.50

Essar Bulk Terminal Limited – – 16.07 – – – 16.07 –

Sub Total 221.67 32.50 16.07 473.97 – – 237.74 506.47

Professional charges / manning expense


Essar Energy Services Limited – – 283.21 324.24 – – 283.21 324.24


Essar Information Technology Limited – – 3.05 51.09 – – 3.05 51.09

Essar Investments Limited – – 120.01 1,630.00 – – 120.01 1,630.00

Essar Ports Limited * 102.00 – – – – – 102.00 –


Aegis Limited – – 38.56 40.94 – – 38.56 40.94

Sub Total 102.00 – 1,100.58 2,797.94 – – 1,202.57 2,797.94

* formerly known as Essar Shipping Ports & Logistics Limited



(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Travelling expenses


Freight expense


Purchase of fixed assets / CWIP


Essar Constructions (India) Limited – – 435.54 13.16 – – 435.54 13.16


Sub Total 3,358.44 – 468.54 13.16 – – 3,826.98 13.16

Deposit given

Essar Ports Limited * – 150.00 – – – – – 150.00



Sub Total – 150.00 66.00 – – – 66.00 150.00

Loans / advances given



Sub Total 10,696.63 3,710.57 – – – – 10,696.63 3,710.57

Refund of share application money


Remuneration

Mr. K. K. Sinha – – – – 58.08 116.34 58.08 116.34

Capt. Deepak Sachdeva – – – – 17.66 – 17.66 –

Sub Total – – – – 75.74 116.34 75.74 116.34

Outstanding as on March 31, 2012

Trade receivable


Vadinar Ports & Terminals Limited 5,071.11 – – – – – – –

Sub Total 5,071.11 – 3,542.39 3,882.98 – – 3,542.39 3,882.98

Loans & advances including deposits given


Essar Paradip Terminals Limited – – 180.77 180.77 – – 180.77 180.77

Essar Investments Limited – – 37.47 18.80 – – 37.47 18.80

Essar Bulk Terminal (Salaya) Limited – – 3.31 220.00 – – 3.31 220.00

Essar Bulk Terminal Limited – – 0.00 279.04 – – 0.00 279.04




Sub Total – – 7,246.39 9,723.76 – – 7,246.39 9,723.76

Accrued interest receivable


Advances



Sub Total 15,350.97 5,002.78 – – – – 15,350.97 5,002.78


149




(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Deposit given



Essar Shipping Limited – – 150.00 150.00 – – 150.00 150.00

Sub Total – – 216.00 150.00 – – 216.00 150.00


Trade and other payable

Aegis Limited – – 8.16 18.20 – – 8.16 18.20


Essar Projects (India) Limited – – 321.42 268.61 – – 321.42 268.61





Essar Energy Services Limited – – – 242.67 – – – 242.67

Global Supply FZE – – 114.02 114.02 – – 114.02 114.02

Essar Investments Limited – – – 0.01 – – – 0.01

Essar Agrotech Limited – – 0.68 – – – 0.68 –


Sub Total – – 471.34 755.83 – – 471.34 755.83

Advance towards allotment of shares


Guarantees given on behalf of others


Guarantees given by others on behalf of Company




NOTE: 39

The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification as per the

requirement of the revised schedule VI notified under the Companies Act, 1956.


Capt. Deepak Sachdeva Shailesh Sawa

Executive Director Director

Habib Jan

Company Secretary

Mumbai

May 29, 2012


BOARD OF DIRECTORS

Rajiv Agarwal

Director

Capt. Subhas Das

Executive Director & CEO

V. P. Shah

Director

Deepak Kumar Varma

Director

K. K. Sinha

Director

Shailesh Sawa

Director

ESSAR BULK TERMINAL LIMITED

REGISTERED OFFICE

27th KM.

Surat-Hazira Road

Hazira

Gujarat 394 270

AUDIT COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

AUDITORS


CORPORATE OFFICE

Essar House



151



Directors’ Report

The Directors have pleasure in presenting the Eight Annual Report together with the Audited Accounts of the Company for

the year ended March 31, 2012.


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Total Income 43,292.69 24,488.36

Total Expenditure excluding depreciation 13,239.35 9,751.31

Profit before depreciation, interest and tax 30,053.34 14,737.05

Depreciation 2,892.40 2,619.28

Finance cost 6,808.09 5,961.36

Profit before tax 20,352.85 6,156.41

Less : Provision for Tax 4,471.42 1,337.85

Profit After Tax 15,881.43 4,818.56


Your Company owns and operates one of India’s largest dry bulk terminal and has successfully completed two years of

operations at the deep water terminal at Hazira in the State of Gujarat.

During the year, the terminal of your Company has demonstrated high standards of nautical services, safe and smooth

cargo handling and port operations.

Your Company handled 243 deep draft vessels and 469 mini bulk carriers during the year. The cargoes handled at the

terminal included iron ore pellets, coal, project cargoes and finished steel coils. The following throughput was handled

during the year under review:

S. No. Cargo Description Quantity (in MMT)

1 Bulk Cargo 10.13

2 Finished Steel Products 1.81

3 Project Cargo 0.08

Total 12.02

Your Company has conducted business with strong health, safety and environment consciousness. Your Company has

also received ISO certifications from Indian Register of Shipping for Quality, Health, Safety and Environment and there was

ZERO loss time injury during the year.

Your terminal facility is capable of accommodating bigger size vessels of upto 12 mtrs. draft directly alongside the berth

throughout the year, resulting in quicker turnarounds and reduced dependence on lighterage operations.

DIVIDEND

Your Board recommends the Dividend on all the series of Preference shares issued and outstanding as on March 31,

2012. The dividend will be paid at the respective rate for each series of Preference Shares issued by the Company.

Your Board also recommends a dividend of 15.50% on the equity shares and the 0.01% Compulsorily Convertible

Cumulative Participating Preference Shares of the Company.

The above dividend will be paid upon approval by the shareholders.

DIRECTORS

In accordance with the provisions of the Companies Act 1956, and the Articles of Association of the Company,

Shri. K. K. Sinha and Shri. V. P. Shah retire at the ensuing Annual General Meeting of the Company and being eligible,

offer themselves for re-appointment.

Directors’ Report


During the year, Shri. Deepak Kumar Varma was

appointed as an Additional Director of the Company.

Shri. Varma holds office upto the date of the ensuing

Annual General Meeting. The Company has received a

notice from a member proposing the appointment of Shri.

Varma as a Director of the Company.

AUDITORS

Your Company’s Auditors, M/s. Deloitte Haskins & Sells,

Chartered Accountants, Ahmedabad retire at the conclusion

of the ensuing Annual General Meeting. It is proposed

to re-appoint M/s. Deloitte Haskins & Sells, Chartered

Accountants, Ahmedabad as the Auditors of the Company

from the conclusion of this Annual General Meeting until the

conclusion of the next Annual General Meeting.

HOLDING COMPANY

Essar Ports Limited continues to be the holding company

of your Company.

SUBSIDIARY COMPANIES

Essar Bulk Terminal Paradip Limited (EBTPL) became

a subsidiary of your Company during the year. Your

Company holds 95% of the equity share capital of EBTPL.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPOTION AND FOREIGN EXCHANGE EARNING

AND OUTGO

The provisions of Section 217(1)(e) of the Companies Act,

1956 read with Companies (Disclosure of Particulars in

the Report of Board of Directors), Rules 1988, relating to

Energy Conservation and Technology Absorption are not

applicable to your Company.

The foreign exchange earnings and outgo is as under:

PARTICULARS OF EMPLOYEES

Information required in accordance with the provisions of

Section 217(2A) of the Companies Act, 1956, read with

the Companies (Particulars of Employees) Rules, 1975 as

amended is annexed and forms part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the

Companies Act, 1956, the Board of Directors hereby state

that:

(a) in preparation of the annual accounts, the applicable

accounting standards have been followed and there

have been no material departures;

(b) the Directors have selected such accounting policies

and applied them consistently and made judgments

and estimates that are reasonable and prudent so as

to give a true and fair view of the state of affairs of the

Company at the end of the financial year;

(c) the Directors have taken proper and sufficient care

for the maintenance of adequate accounting records

in accordance with the provisions of this Act for

safeguarding the assets of the Company and for

preventing and detecting fraud and other irregularities;

and

(d) the Directors have prepared the annual accounts on a

going concern basis.

ACKNOWLEDGEMENTS

Your Directors express their sincere thanks and

appreciation to all the employees for their commendable

teamwork and contribution to the growth of the Company.

Your Directors also thank the Gujarat Maritime Board,

the Customs Authorities, its Bankers and other business

associates for their continued support and co-operation

during the year.


Capt. Subhas Das Shailesh Sawa


May 29, 2012

Directors’ Report

153



TO THE MEMBERS OF


1. We have audited the attached Balance Sheet of

as at 31st March, 2012, the Statement of Profit

and Loss and the Cash Flow Statement of the

Company for the 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.


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

misstatements. An audit includes examining, on a

test basis, evidence supporting the amounts and the

disclosures in the financial statements. An audit also

includes assessing the accounting principles used and

the 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.


Order, 2003 (CARO) issued by the Central

Government in terms of Section 227(4A) of the

Companies Act, 1956, we give in the Annexure a

statement on the matters specified in paragraphs 4

and 5 of the said Order.

4. Further to our comments in the Annexure referred to

in paragraph 3 above, we report that:

(i) we have obtained all the information and



audit;

(ii) in our opinion, proper books of account as



those books;

(iii) the Balance Sheet, the Statement of Profit and



account;

(iv) in our opinion, the Balance Sheet, the Statement





(v) in our opinion and to the best of our information







(a) in the case of the Balance Sheet, of the


March, 2012;

(b) in the case of the Statement of Profit and

Loss, of the profit of the Company for the

year ended on that date and

(c) in the case of the Cash Flow Statement, of


ended on that date.


from the Directors as on 31st March, 2012 taken on

record by the Board of Directors, we report that none

of the Directors is disqualified as on 31st March, 2012

from being appointed as a director in terms of Section

274(1) (g) of the Companies Act, 1956.



(Registration No. 117365W)

Gaurav J. Shah

Mumbai Partner

May 29, 2012 (Membership No.35701)

Directors’ Report Auditors’ Report



In our opinion and according to the information and

explanations given to us, the nature of the Company’s

business/activities during the year are such that clauses

(vi), (xiii), (xiv), (xviii), (xix) and (xx) of Para 4 of the Order are

not applicable to the Company.

1. In respect of fixed assets:

a. The Company has maintained proper records


details and situation of its fixed assets.

b. The fixed assets of the Company are physically

verified by the management according to a

phased program designed to cover all the items

over a period of three years, which in our opinion,

is largely reasonable having regard to the size of

the Company and the nature of its assets. As per

the information given to us by the management,

no material discrepancies as compared to book

records were noticed in respect of fixed assets

verified during the year.

c. There is no disposal during the year.

2. In respect of inventories:

a. As explained to us, inventories were physically

verified by the management during the year 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 nature of

its business.

c. In our opinion and according to the information


maintained proper records of its inventories. No

material discrepancies were noticed on physical

verification as compared to book records.

3. In our opinion and according to the information and

explanations given to us, there are no companies,

firms or parties required to be entered into the register

maintained under section 301 of the Companies Act,

1956. Accordingly, paragraphs 4(iii) (a) to (g) of the

Order are not applicable to the Company.


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 purchase

of inventory and fixed assets and for sale of services.

During the course of our audit, we have not observed

any continuing failure to correct major weaknesses in

such internal controls. The nature of the Company’s

business does not involve sale of goods.


explanations given to us, there are no contracts or

arrangements that need to be entered into the

register maintained in pursuance of Section 301 of the


6. In our opinion, the internal audit system of the

Company is commensurate with the size of the

Company and the nature of its business.

7. We have broadly reviewed the cost records


Companies (Cost Accounting Records) Rules, 2011

prescribed by the Central Government under Section

209(1)(d) of the Companies Act, 1956 and are of the

opinion that prima facie the prescribed cost records

have been maintained. We have, however, not made

a detailed examination of the cost records with a view

to determine whether they are accurate or complete.

8. According to the information and explanations given

to us, in respect of statutory dues:

a. The Company has been generally regular in

depositing undisputed statutory dues, including

Provident Fund, Income Tax, Service Tax, Custom

Duty, Cess and any other material statutory dues,

as applicable, with the appropriate authorities

during the year. As explained to us, the

provisions for Investor Education and Protection

Fund, Employees’ State Insurance Scheme,

Wealth Tax, Sales Tax, Value Added Tax and

Excise Duty were not applicable to the Company

during the year.

There are no material undisputed amounts payable

in respect of above statutory dues outstanding as

at 31st March, 2012 for a period exceeding six


b. According to the information and explanations

given to us, there were no dues pending to be

deposited on account of any dispute in respect

of Sales Tax, Income Tax, Customs Duty, Wealth

Tax, Service Tax, Excise Duty and Cess as on

31st March, 2012.

9. 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.

10. In our opinion and according to the information


not defaulted in repayment of dues to banks. The

Company has not borrowed any sums from financial

institutions or through issue of debentures.


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.

Annexure to the Auditor’s Report

155




explanations given to us, the Company has not given

any guarantee for loans taken by others from banks

and financial institutions.

13. To the best of our knowledge and belief and

according to the information and explanations given

to us, term loans availed by the Company were, prima

facie, applied by the Company during the year for the

purposes for which the loans were obtained, other

than temporary deployment pending application.


to us, and on an overall examination of the Balance

sheet of the Company, we report that the funds raised

on short-term basis have, prima facie, not been used

during the year for long-term investment.

15. To the best of our knowledge and belief and

according to the information and explanations given

to us, no material fraud on or by the Company was

noticed or reported during the year.



(Registration No. 117365W)

Gaurav J. Shah

Mumbai Partner

May 29, 2012 (Membership No.35701)


Balance Sheet as at 31 March, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011


(1) Shareholders’ funds

(a) Share capital 2 26,150.00 26,150.00


44,786.39 31,339.63

(2) Share application money pending allotment – 1,791.70

(3) Non-current liabilities


(b) Deferred tax liabilities (Net) 37 2,502.66 15.89

(c) Other Long term liabilities 5 20,752.87 30,150.39


132,566.81 107,684.59

(4) Current liabilities


(b) Trade payables 5,786.31 2,539.00



19,720.12 22,187.37

Total 197,073.32 163,003.29

II. ASSETS

(1) Non-current assets

(a) Fixed assets

(i) Tangible assets 10 75,771.77 74,643.31

(ii) Intangible assets 10 3.40 6.80

(iii) a. Capital work-in-progress 11 75,991.22 60,311.48

b. Expenditure during construction 12 21,733.55 9,319.26

173,499.94 144,280.85

(b) Non-current investments 13 163.06 109.88

(c) Long-term loans and advances 14 3,912.58 827.67

(d) Other non-current assets 15 31.03 62.07

4,106.67 999.62

(2) Current assets

(a) Inventories 16 58.08 133.17

(b) Trade receivables 17 9,968.78 4,506.42

(c) Cash and cash equivalents 18 1,035.55 3,600.04

(d) Short-term loans and advances 19 7,600.12 9,294.15

(e) Other current assets 20 804.18 189.04

19,466.71 17,722.82

Total 197,073.32 163,003.29


In terms of our report attached For and on behalf of the board



Gaurav J. Shah Subhas Das Shailesh Sawa


Mumbai Mumbai

May 29, 2012 May 29, 2012

157



(Rs. in lakhs)

Particulars Note Year ended Year ended

No. March 31, 2012 March 31, 2011

I. Revenue from operations 21 42,534.14 24,114.57

II. Other income 22 758.55 373.79

III. Total Revenue (I + II) 43,292.69 24,488.36

IV. Expenses:

a. Operating expenses 23 11,491.50 8,600.96

b. Establishment expenses 24 876.37 443.88

c. Employee benefit expenses 25 816.88 646.55

d. Other expenses 26 54.60 59.93

Total expenses 13,239.35 9,751.31

V. Earnings before finance costs, depreciation and tax 30,053.34 14,737.04

VI. Finance cost 27 6,808.09 5,961.36

VII. Earnings before depreciation and tax (V-VI) 23,245.25 8,775.68

VIII. Depreciation and amortisation expense 2,892.40 2,619.28

IX. Profit/ (Loss) for the year before tax (VII-VIII) 20,352.85 6,156.40

X. Tax expense:

a. Current tax 4,155.00 1,228.43

b. MAT Credit Entitlement (2,200.00) (200.00)

c. Deferred tax charge/(credit) 2,486.77 323.39

d. Short/(Excess) provisions for earlier years 29.65 (13.97)

XI. Profit/ (Loss) for the year (IX-X) 15,881.43 4,818.55

XII. Earnings per equity share:

a. Basic 10.14 3.78

b. Diluted 5.84 1.75


Statement of Profit and Loss for the year ended 31 March 2012






Mumbai Mumbai

May 29, 2012 May 29, 2012



(Rs. in lakhs)

Particulars Year ended Year ended

March 31, 2012 March 31, 2011

I. CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxes 20,352.85 6,156.40

Adjustments for:

a. Preliminary expenditure written off 31.03 31.03

b. Depreciation and amortisation 2,892.40 2,619.28

c. Gratuity 11.63 31.55

d. Compensated absences 51.31 15.51

e. Interest income (2.50) (351.94)

g. Interest expense 6,808.09 5,934.54

Operating profits before working capital changes 30,150.05 14,436.37

Movements in working Capital:

a. Increase in trade and other receivables (7,362.24) (8,656.89)

b. Increase in trade and other payables (4,752.98) 9,291.94

c. Increase in provisions 107.13 (47.70)


Less: Income taxes paid (net of refund) (2,173.03) (444.54)

Net cash generated from operations 15,968.93 14,579.18

II. CASH FLOW FROM INVESTING ACTIVITIES

a. Purchase of fixed assets (4,871.75) (7.16)

b. Capital work in progress / expenditure during construction (18,585.56) (36,120.83)

c. Fixed deposits placed (849.09) (3,349.50)

d. Fixed deposits matured 3,907.00 6,116.00

e. Inter company deposits refunded – 330.00

f. Interest Income received 174.59 173.87

g. Purchase of current investments (58.17) (4,100.00)

h. Proceed from sale of current Investments 5.00 4,225.33

i. Proceed from sale of long term investment – 0.64

Net cash used in investing activities (20,277.98) (32,731.65)

III. CASH FLOW FROM FINANCING ACTIVITIES

a. Proceeds from secured loan 31,682.35 81,810.57

b. Proceeds from unsecured loan – 1,850.00

c. Proceeds from share application money received – 2,808.14

d. Share application money refunded (1,791.70) (46.16)

Cash Flow Statement for the year ended 31 March 2012

159




e. Bills accepted 23,719.43 30,196.10

f. Bills accepted repaid (32,052.66) (33,758.71)

g. Effect of exchange differences on translation of assets and liabilities 9.22 –

h. Repayment of the secured loan – (50,465.74)

i. Repayment of the unsecured loan (1,200.00) (4,530.00)

j. Interest and finance cost paid (15,564.17) (10,601.53)

Net cash flow from financing activities 4,802.47 17,262.67

Net increase / (decrease) in cash and cash equivalents 493.42 (889.80)

Cash and cash equivalents at the beginning of the year 250.16 1,139.96

Cash and cash equivalents at the end of the year 743.58 250.16

Notes:

1. Cash and cash equivalents include :

Cash and bank balances 743.58 250.16

Total cash & cash equivalents 743.58 250.16

Amounts not available for immediate use : -

Balances in Margin money deposits 291.97 3,349.88

Cash and bank balances (as per Note 18) 1,035.55 3,600.04

2. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard 3 – ‘Cash

flow statement’ as notified under the Companies (Accounting Standard) Rules, 2006.

Cash Flow Statement for the year ended 31 March 2012

(Rs. in lakhs)


ended ended

31 March 2012 31 March 2011






Mumbai Mumbai

May 29, 2012 May 29, 2012



1 SIGNIFICANT ACCOUNTING POLICIES:

A. Basis of Accounting





Accounting Standards (AS) referred to in sub-section (3C)

of Section 211 of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements in conformity with

the generally accepted accounting principles requires

estimates and assumptions to be made that affect the

reported amounts of assets, liabilities and disclosures

relating to contingent liabilities as at the reporting date and



and estimates are recognized in the period in which the

results are known / materialized.

C. Fixed Assets

Fixed assets are recorded at cost of acquisition or at

revalued amounts less accumulated depreciation and


Cost of acquisition of fleet includes brokerage, startup

costs and cost of major improvements/ up gradation.

Cost of acquisition is inclusive of cost of construction

including erection, installation and commissioning

expenses, expenditure during construction, inseparable

know how costs, gains or losses earned / incurred during

the trial run, nonrefundable duties and taxes, borrowing

costs and other incidental costs, where applicable.

D. Capital Work-in-Progress and Expenditure during

Construction

Direct expenditure on assets under construction is shown

under capital work in progress.

Project management consultancy/ technical advisory fees

and expenditure incidental to the construction of jetty

that take substantial period of time to get ready for their

intended use are accumulated as expenditure during

construction pending allocation to fixed assets and other

accounts, as applicable on completion of the project.

E. Depreciation

Depreciation on Fleet (Dredger) and Booster Pump is

provided by using the straight line method at the rates

prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on impact hammer, turning plates, clamps

and others included in plant and machinery are provided

by using the straight line method at the rates prescribed in

Schedule XIV to the Companies Act, 1956.

All other assets are depreciated by using the written

down value method at the rates prescribed in Schedule

XIV to the Companies Act, 1956. Assets costing less than

Rs.5,000 per item are depreciated at 100% in the year of

acquisition.

Depreciation on additions to / deductions from fixed

assets made during the year is provided on a pro-rata

basis from / up to the date of such additions / deductions,

as the case may be.

Berth and Jetty that are to be handed over to Gujarat

Maritime Board are depreciated over the concession

period or rates prescribed in Schedule XIV to the

Companies Act, 1956 whichever is higher.

F. Borrowing Costs


acquisition, construction/development of qualifying asset

are capitalized as a part of cost of such asset. A qualifying

asset is one that necessary takes substantial period of

time to get ready for the intended use.



are amortized and charged to the Statement of Profit and


G. Investments

Long term investments are stated at cost. However, in

the opinion of management, when there is an other than

temporary decline in the value of long term investments

with reference to their fair/market value, the carrying

amount is reduced to recognize that decline. Current

investments are carried at lower of cost or fair value.

H. Foreign Currency Transactions

Transactions denominated in foreign currencies are

accounted at standard exchange rates determined

monthly which approximates the actual rates on the date

of transaction. The difference between the standard rate

and the actual rate of settlement is accounted in the


Monetary items denominated in foreign currency are

translated at the rate prevailing exchange rate at the

end of the year. Gains / losses arising on conversion /

translation / settlement of foreign currency transactions are

recognized in the Statement of Profit and Loss.

I. Taxation

Current tax is provided as per the provisions of the Income

Tax Act, 1961.

The tax effect of timing differences occurring between

taxable income and accounting income that are capable of



161








recognized only if there is virtual certainty of realization,


account of other timing differences are recognized only to

the extent there is reasonable certainty of realization.

J. Provisions, Contingent Liabilities and Contingent

Assets

Provisions are recognized for present obligations arising

out of the past events if it is probable that an outflow of

economic resources, the amount of which can be reliably

estimated, will be required to settle the obligations.



of which will be confirmed by the occurrence or

nonoccurrence of one or more uncertain future events

not wholly within the control of the Company, or a present

obligation that is not recognized because a reliable

estimate of the liability cannot be made, or the likelihood

of an outflow of economic resources is remote.

Contingent assets are neither recognized nor disclosed in

the financial statements.

K. Inventory

Stores, spares and consumables are valued at lower of

cost (net of refundable taxes and duties) or net realizable

value. Cost is determined on moving weighted average

price.

L. Revenue Recognition

1. Revenue from operations represents the

revenue from Cargo Handling and Other

Related Services. Revenue is recognized when

the services are rendered and no significant

uncertainty exists as to determination or

realization exists.

2. Revenue in respect of Other Income is

recognized when a reasonable certainty to its

realization exists.

M. Operating Expenses

Operating expenses represents expenses relating to the

operation of cargo handling including hire charges, repairs,

stores, power and fuel charges and other expenses and is

accounted on accrual basis.

N. Impairment of Assets




estimates the recoverable amount of the asset. If

such recoverable amount of the asset is less than its

carrying amount, the carrying amount is reduced to its

recoverable amount. The amount so reduced is treated

as an impairment loss and is recognized in the Statement

of Profit and Loss or expenditure during construction,

as applicable. If at the balance sheet date, there is an

indication that a previously assessed impairment loss no

longer exists, the recoverable amount is reassessed and

the asset is carried at the recoverable amount subject to a

maximum of depreciated historical cost.

O. Employee Benefits

a) Contribution to recognized provident fund,


employees’ salary, is charged to the statement

of Profit and Loss and expenditure during

construction, as the case may be.

b) The liability for gratuity is actuarially determined

and funded to Life Insurance Corporation of

India to the extent demanded by them and

balance taken to provisions.

c) Provision for all accumulated compensated



P. Miscellaneous Expenditure

Share issue expenses are written off over five years.



2 SHARE CAPITAL



(i) Authorised

a. Equity Shares of Rs.10 each 10,000,000 1,000.00 170,000,000 17,000.00

b. 0.01 % Preference Shares of Rs.10 each 290,000,000 29,000.00 130,000,000 13,000.00

300,000,000 30,000.00 300,000,000 30,000.00

(ii) Issued, Subscribed & Paid up

a. Equity Shares of Rs.10 each fully paid 5,000,000 500.00 134,984,850 13,498.48

b. 0.01% Optionally Convertible Redeemable

Cumulative Preference Shares (OCRCPS)

of Rs.10 each 44,500,000 4,450.00 44,500,000 4,450.00

c. 0.01% Fully Convertible Cumulative

Preference Shares (FCCPS) of Rs.10 each 82,015,150 8,201.52 82,015,150 8,201.52

d. 0.01% Compulsory Convertible

Cumulative Participating Preference

Shares (CCCPPS) of Rs.10 each 129,984,850 12,998.48 – –

261,500,000 26,150.00 261,500,000 26,150.00

Notes : -

a. Reconciliation of the number of shares outstanding and the amount of share capital as at March 31, 2012

and March 31, 2011 is set out below:

Equity Shares OCRCPS FCCPS CCCPPS

(i) Shares outstanding at the Rs. in Lakhs 13,498.48 4,450.00 8,201.52 –

beginning of the year Numbers 134,984,850 44,500,000 82,015,150 –

(ii) Shares Issued during Rs. in Lakhs – – – 12,998.48

the year Numbers – – – 129,984,850

(iii) Shares bought back during the Rs. in Lakhs (12,998.48) – – –

year (Refer Note 28) Numbers (129,984,850) – – –

(iv) Shares outstanding at the Rs. in Lakhs 500.00 4,450.00 8,201.52 12,998.48

end of the year Numbers 5,000,000 44,500,000 82,015,150 129,984,850

b. Shares in each class held by holding company / by each shareholder holding more than 5% shares.

Equity Shares OCRCPS



2012 2011 2012 2011

(i) Essar Ports Limited Numbers 3,700,000 99,888,850 32,930,000 32,930,000

(Holding Company) Percentage 74.00% 74.00% 74.00% 74.00%

(ii) Essar Steel India Limited Numbers 1,300,000 35,096,000 10,413,000 10,413,000

Percentage 26.00% 26.00% 23.40% 23.40%

(iii) Essar Investments Limited Numbers – – 1,157,000 1,157,000

Percentage – – 2.60% 2.60%

Total Numbers 5,000,000 134,984,850 44,500,000 44,500,000

Percentage 100.00% 100.00% 100.00% 100.00%

163




FCCPS CCCPPS



2012 2011 2012 2011

(i) Essar Ports Limited Numbers 79,022,903 79,022,903 129,984,850 –

(Holding Company) Percentage 96.35% 96.35% 100.00% –

(ii) Essar Steel India Limited Numbers 2,992,247 2,992,247 – –

Percentage 3.65% 3.65% – –

Total Numbers 82,015,150 82,015,150 129,984,850 –

Percentage 100.00% 100.00% 100.00% –






shareholding.

(d) Terms / rights attached to preference shares

i. Dividend:

Fixed Dividend on Preference Shares: The Company has three classes of preference shares having fixed dividend

of 0.01% p.a. from the allotment on cumulative basis.

ii. Participating Dividend:

CCCPPS holder shall have the same rights to dividend as that of the equity share holder over and above the

fixed dividend.

iii. Conversion:

The holder of OCRCPS have an option to either apply for conversion of preference shares into equity shares of

Rs.10/- each in the ratio of 1:1 at par after one year from the date of issue (i.e. 28th March, 2007) or they will be

redeemed at the end of ten years from the date of allotment.

The holder of FCCPS have an option either to apply for conversion of preference shares into equity shares of

Rs.10/- each in the ratio of 1:1 at par at any time after one year from the date of allotment (i.e. 12th November,

2007) or to compulsorily convert them into equity shares at the end of ten years from the date of allotment.

Each CCCPPS shall be compulsorily convertible into one Equity Share at the end of twenty years from the

date of issue and allotment (i.e. 28th March, 2012). The CCCPPS holder shall have the option to convert the

CCCPPS into Equity Shares any time after the expiry of one year from the date of issue and allotment of the

CCCPPS. Each CCCPPS shall convert into one Equity Share.

Equity Shares issued upon conversion of the preference shares shall rank pari passu with the existing Equity

Shares.



3 RESERVES & SURPLUS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

a. General Reserve

Opening balance – –

(+) Transfer from Surplus in Profit & Loss 1,191.11 –

Closing Balance 1,191.11 –

b. Surplus / (Deficit) in Statement of Profit & Loss

Opening balance 5,189.63 376.37

(+) Net Profit For the current year 15,881.43 4,818.55

(-) Proposed Dividend

on Equity Shares (Rs.1.55 per share) (77.50) –

on Preference Shares (2,017.34) (4.55)

(-) Tax on Dividend (339.83) (0.74)

(-) Transfer to General Reserve (1,191.11) –

Closing Balance 17,445.28 5,189.63

Total 18,636.39 5,189.63


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Secured

Term loans from Banks 109,099.99 77,417.64

Total 109,099.99 77,417.64

Term loans from banks are repayable in quarterly instalments starting from 1st October, 2013 and are secured by

first pari passu charge on all future movable / immovable properties, insurance contracts, accounts receivables and

all other assets of the Company including but not limited good will, trademarks and patents.

5 OTHER LONG TERM LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Other Long Term Liabilities

Acceptances* 20,752.87 30,150.39

Total 20,752.87 30,150.39

* Acceptances facilities are part of loan agreement for rupee term loan from banks. The acceptances get

converted into rupee term loan.

165





(Rs. in lakhs)


March 31, 2012 March 31, 2011

Provision for gratuity 16.14 4.50


Total 211.29 100.67

7 SHORT TERM BORROWINGS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Secured

From Banks

Working Capital Loan 1,503.55 1,673.98

Buyers’ Credit 258.04 –

Total 1,761.59 1,673.98

Unsecured

From related parties

Vadinar Ports & Terminals Limited – 1,200.00

Total 1,761.59 2,873.98

The Working Capital Loan and Buyers’ Credit are secured by first pari passu charge on all the present and future

movable / immovable assets / properties, insurance contracts, accounts, receivables and all other assets of the

Company including but not limited to goodwill, trademarks and patents.


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Acceptances 1,110.00 45.71


Interest accrued and due on borrowings 101.15 300.00

Advance from customer 1,704.02 3,505.53

Sundry Creditors (for capital expenses) 5,725.30 8,811.33

Other payables 715.31 3,457.07

Total 9,385.56 16,231.25


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Provision for employee benefits


Proposed dividend 2,094.83 –

Tax on dividend 339.83 –

Provision for tax (Net) 343.22 530.87

Total 2,786.66 543.14



10

FIX

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(Rs.

in lakhs)

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167




11 CAPITAL WORK IN PROGRESS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Plant and Equipment 92.17 –

Jetty construction expenses 14,379.03 4,518.92

Dredging expenses 61,520.02 55,792.56

Total 75,991.22 60,311.48

12 EXPENDITURE DURING CONSTRUCTION

(Rs. in lakhs)

As at Additions during As at

April 1, 2011 the year March 31, 2012

Certification and survey charges 8.63 200.80 209.43

Salary & manpower expenses 1,448.72 1,449.45 2,898.17

Legal and professional charges 336.38 587.20 923.58

Insurance 55.35 68.53 123.88

Interest and finance cost 6,779.16 8,756.09 15,535.25

Agency fee 57.26 56.58 113.84

Depreciation 683.82 854.29 1,538.11

Taxes and dues 6.75 6.96 13.71

Traveling expenses 8.37 28.31 36.68

Hiring charges 241.73 345.59 587.32

Power and electricity expenses – 218.95 218.95

General expenses 8.30 120.95 129.25

Total (i) 9,634.47 12,693.70 22,328.17

Less :

Interest accrued on term deposits (205.31) (131.61) (336.92)

Gain on redemption of mutual funds (10.89) – (10.89)

Interest on intercompany deposits given (24.52) – (24.52)

Site formation services/scrap income (52.27) (147.80) (200.07)

Vessel and equipment hire income (22.22) – (22.22)

Total (ii) (315.21) (279.41) (594.62)

Total (A-B) 9,319.26 12,414.29 21,733.55



13 NON CURRENT INVESTMENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Trade Investments {Unquoted (At cost)}

(a) Investment in Equity Shares

In Subsidiary Companies

(i) Essar Dredging Limited

Nil (Previous Year: 50,000 equity shares of Rs.10/- each) – 5.00

(ii) Essar Bulk Terminal Paradip Limited

47,500 (Previous Year: 6,630) equity shares of Rs.10/- each 8.84 0.66

In Other Companies

(i) Bhander Power Limited

386,000 (Previous Year: 386,000) equity shares of Rs.10/- each 104.22 104.22

(b) Investment in Preference Shares

(i) Essar Bulk Terminal Paradip Limited

500,000 (Previous Year: Nil) 0.01% compulsory convertible

cumulative preference Shares of Rs.10/- each 50.00 –

Total 163.06 109.88

Value of quoted investments – –

Value of unquoted investments 163.06 109.88

Provision for diminution in the value of investments – –


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Other loans and advances

Minimum alternate tax credit 2,412.07 212.07

Prepaid expenses 1,053.75 609.95

Capital advances 446.76 5.65

Total 3,912.58 827.67


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Share issue expenses to the extent not written off 31.03 62.07

Total 31.03 62.07

169




16 INVENTORIES

(Valued at lower of cost and net realisable value)

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Fuel, oil & lubricants 44.16 127.66

Stores and spares 13.92 5.51

Total 58.08 133.17


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Trade receivables outstanding for a period exceeding six 12.75 372.89

months from the date they are due for payment

Others 9,956.03 4,133.53

Total 9,968.78 4,506.42

18 CASH AND CASH EQUIVALENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Balances with banks

On current accounts 743.58 250.16

Other bank balances

Margin Deposits 291.97 3,349.88

Total 1,035.55 3,600.04

19 SHORT-TERM LOANS AND ADVANCES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Loans & advances to related parties 781.41 165.70

Advances recoverable in cash or in kind 447.13 583.99

Balance with Excise Department 5,407.84 8,162.53

Loans & advances to employees 12.43 0.02

Prepaid expenses 951.31 381.91

Total 7,600.12 9,294.15




(Rs. in lakhs)


March 31, 2012 March 31, 2011

Receivables

– From related parties 662.48 –

– From service tax authorities 15.20 –

– From others 55.00 55.87

732.68 55.87

Interest accrued on deposits with bank 40.47 102.14

Shares issue expenses to the extent not written off 31.03 31.03

Total 804.18 189.04


(Rs. in lakhs)

Year ended Year ended

March 31, 2012 March 31, 2011

Cargo handling income 35,742.77 20,685.91

Wharfage charges recovery 1,832.88 966.70

Port Charges 2,680.40 1,634.35

Berth Hire Charges 136.85 29.75

Piliotage charges 553.73 180.14

Facility Charges 896.02 294.82

Vessel & Equipment hire income 161.74 208.86

Stevedoring Income 529.75 114.04

Total 42,534.14 24,114.57

22 OTHER INCOME

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Interest Income from related parties 2.50 351.94

Ship management services, storage charges, scrap sales, etc. 756.05 21.85

Total 758.55 373.79

171





(Rs. in lakhs)


March 31, 2012 March 31, 2011

Repairs – Plant and Equipment 465.41 282.20

Consumption of stores and spares 569.65 392.51

Power and fuel charges 218.95 137.10

Hire charges 3,973.25 1,688.81

Manning management expenses 1,332.35 1,399.07

Insurance 60.56 50.08

Security maintenance charges 63.35 47.85

Lighterage Cost 1,997.14 3,300.00

Port Charges 978.39 347.24

Wharfage charges 1,832.45 956.10

Total 11,491.50 8,600.96

24 ESTABLISHMENT EXPENSES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Professional fees 589.23 134.43

Rent 24.49 –

Repairs others 124.00 226.36

Travelling and conveyance 91.43 39.64

Vehicle hire and maintenance charges 11.46 10.66

Auditors’ remuneration 7.78 7.43

Rates and taxes 27.98 25.36

Total 876.37 443.88

25 EMPLOYEE BENEFIT EXPENSES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Salaries, wages and related costs 719.61 566.40



Total 816.88 646.55

26 OTHER EXPENSES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Miscellaneous expenses 23.57 28.90

Preliminary expenses written off 31.03 31.03

Total 54.60 59.93



27 FINANCE COST

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Interest expense 6,628.34 5,737.87

Other borrowing costs 134.07 196.67

Bank Charges 45.68 26.82

Total 6,808.09 5,961.36

28 BUY BACK

The Hon’ble High Court of Gujarat at Ahmedabad has vide order No. 2054/11 dated May 3, 2011 approved the Scheme

of Arrangement (the ‘Scheme’) between Essar Bulk Terminal Limited (EBTL) and its shareholders.

Pursuant to the said order the members of the Company have tendered 129,984,850 equity shares. These members have

been issued and allotted 129,984,850 – 0.01% Compulsorily Convertible Cumulative Participating Preference Shares of

Rs.10/- each (the CCCPPS). Each CCCPPS can be converted into one equity share of Rs.10/- each. The equity shares to be

issued upon conversion of the CCCPPS shall rank pari passu in all respects with the existing equity shares of the Company.

Each CCCPPS shall be compulsorily convertible into one Equity Share at the end of twenty years from the date of issue

and allotment. The CCCPPS holder shall have the option to convert the CCCPPS into Equity Shares any time after the

expiry of one year from the date of issue and allotment of the CCCPPS.

The CCCPPS holder shall participate in any dividend or any other distribution by the Company which will be on fully

diluted basis i.e. the CCCPPS holder shall have the same rights to dividend as that of the equity share holder over and

above the fixed dividend.


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Bills discounted from Bank 2,500.00 –

Guarantee given by banks on behalf of the company 905.35 905.35

Total 3,405.35 905.35

30 CAPITAL COMMITMENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Outstanding capital commitments {net of advances paid

Rs.446.76 lakhs (Previous Year Rs.5.65 lakhs) } 1,976.64 2,696.26

31 AUDITORS’ REMUNERATION

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Audit fees 2.50 4.00*

Other assurance services 5.50 2.95

Service tax on above 0.82 0.48

Total 8.82 7.43

(* includes Rs.1.50 lakhs pertaining to previous year)

173





(Rs. in lakhs)


March 31, 2012 March 31, 2011

(i) Basic Earnings per Share

Net Profit for the year (Rs. in lakhs) [A] 15,881.43 4,818.55

Less: Dividend on preference shares including

dividend distribution tax (Rs. in lakhs) 2,344.60 1.44

Earnings for the purpose of basic earnings

per share (Rs. in lakhs) [B] 13,536.83 4,817.11

Equity shares at the beginning of the year(nos.) 134,984,850 100,435,004

Equity shares issued during the year (nos.) – 34,549,846

Equity shares bought back during the year (nos.) (129,984,850) –

Equity shares outstanding at the end of year (nos.) 5,000,000 134,984,850

Weighted average number of Equity shares for purpose

of calculating basic earnings per share (nos.) [C] 133,564,251 127,601,595

Basic Earnings Per Share [B / C] 10.14 3.78

Nominal Value of Equity Share (Rs.) 10.00 10.00

(ii) Diluted Earnings per Share

Dilutive potential equity shares (Including number of

equity shares which would be issued upon conversion of

preference shares) (nos.) [D] 138,411,811 147,144,051

Weighted average number of shares for purpose of calculating

diluted earnings per share (nos.) [E] = [C+D] 271,976,062 274,745,646

Diluted Earnings Per Share [A / E] 5.84 1.75

Nominal Value of Equity Share (Rs.) 10.00 10.00

33 INFORMATION PURSUANT TO REVISED SCHEDULE VI TO THE COMPANIES ACT, 1956 TO THE EXTENT

APPLICABLE IS GIVEN BELOW:

(Rs. in lakhs)


March 31, 2012 March 31, 2011

a) C.I.F. value of imports

Capital goods 1,947.77 379.29

Stores, spares and components 291.71 6.79

Total 2,239.48 386.08

b) Expenditure in foreign currency (on accrual basis)

Interest and finance costs 2.97 –

Insurance charges 26.22 21.50

Professional charges 0.02 0.56

Foreign travel 40.07 –

Freight charges 109.94 –

Total 179.22 22.06



34 EARNING IN FOREIGN CURRENCY

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Port charges, Berth hire charges, Pilotage charges,

Facility charges etc. 1,115.40 388.93

Total 1,115.40 388.93


a) There were no forward /options contract in to by the Company during the financial year to hedge its foreign

currency exposure.

b) The year-end currency exposures that have not been hedged by a derivative instrument or otherwise are given

below:

Amount (Rs. in lakhs) Amount in foreign currency in lakhs


March 31, March 31, Currency March 31, March 31,

2012 2011 2012 2011

– 1.10 GBP – 0.02

b) Amount payable in foreign currency on

on account of Buyers’ credit 48.33 – SEK 6.43 –

36 RELATED PARTY TRANSACTIONS

a) Holding companies:

i) Essar Global Limited, Cayman Island (ultimate holding company)

ii) Essar Shipping & Logistics Limited, Cyprus (holding company of Essar Ports Limited)

iii) Essar Ports Limited (formerly known as Essar Shipping, Ports & Logistics Limited)

b) Key management personnel:

Capt. Subhas Das – Whole time Director & CEO

c) Subsidiary:

i) Essar Bulk Terminal Paradip Limited (with effect from 28th March, 2012)

ii) Essar Dredging Limited (up to 30th June, 2011)

d) Other related parties where there have been transactions:

i) Essar Projects (India) Limited

ii) Futura Travels Limited

iii) Essar Logistics Limited

iv) Essar Steel India Limited (previously known as Essar Steel Limited)

v) Essar House Services Limited

vi) Essar Investments Limited

vii) Essar Engineering Services Limited

175




viii) Essar Heavy Engineering Services

ix) Essar Oil Limited

x) Essar Dredging Limited

xi) Essar Bulk Terminal (Salaya) Limited

xii) Essar Bulk Terminal Paradip Limited

xiii) Essar Information Technology Limited

xiv) Vadinar Oil Terminal Limited

xv) Bhander Power Limited

xvi) Essar Oilfield Services (India) Limited

xvii) Aegis Limited

xviii) Vadinar Ports & Terminals Limited

xix) Essar Shipping Limited

xx) Essar Infrastructure Services Limited

xxi) Essar Shipping (Cyprus) Limited

xxii) Essar Agrotech Limited

xxiii) Arkay Holdings Limited

xxiv) Essar House Limited

xxv) Essar Offshore Subsea Limited

xxvi) Essar Services India Limited



(Rs. in lakhs)

Nature of Transaction Holding and subsidiary Other related Key management

company parties personnel Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Allotment of equity shares

Essar Ports & Terminals Limited – 3,454.98 – – – – – 3,454.98

Share application money received

Essar Ports & Terminals Limited – 2,808.14 – – – – – 2,808.14

Purchase of shares


Essar Ports Limited 4.89 – – – – – 4.89 –



Sale of shares


Essar Ports Limited – 0.64 – – – – – 0.64

Jetty constructions and project management consultancy




Aegis Limited – – 32.35 0.09 – – 32.35 0.09







Vadinar Oil Terminal Limited – – – 214.97 – – – 214.97



Jetty construction expenses – sale


Essar Heavy Engineering Services – – 127.30 43.63 – – 127.30 43.63


Jetty construction expenses – procurement


Essar Heavy Engineering Services – – – 1.27 – – – 1.27


Hazira Pipe Mill Limited – – – 33.58 – – – 33.58

Remuneration

Subhas Das – – – – 84.03 77.86 84.03 77.86

Repairs and maintenance work


Essar Heavy Engineering Services – – 2.50 – – – 2.50 –



Lighterage cost

Essar Logistics Limited – – – 3,300.00 – – – 3,300.00



177




Purchase of fuel (HSD Diesel)


Vadinar Oil Terminal Limited – – 16.07 – – – 16.07 –

Consumption of stores & spares


Essar Heavy Engineering Services – – – 1.01 – – – 1.01

Cargo handling services rendered



Port services rendered & wharfage

charges

Essar Steel India Limited – – 1,571.95 877.38 – – 1,571.95 877.38


Essar Oil Limited – – 8.41 – – – 8.41 –

Essar Shipping Limited – – 1,622.25 1,291.27 – – 1,622.25 1,291.27

Essar Heavy Engineering Services – – 22.64 45.02 – – 22.64 45.02

Essar Shipping & Logistics Limited – – 24.25 – – – 24.25 –





Essar Bulk Terminal (Salaya) Limited – – 348.77 – – – 348.77 –

Essar Bulk Terminal Paradip Limited – – 4.00 – – – 4.00 –



Purchase of power


Consultancy services received





Aegis Limited – – 68.63 1.19 – – 68.63 1.19

Essar Information Technology Limited – – 0.72 – – – 0.72 –


Freight charges


Business promotion expenses


Travel expenses




Essar House Services Limited – – 0.05 – – – 0.05 –


Insurance


(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11



(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Employees accommodation expenses


Hire charges




Rent


Interest on unsecured loan



Vadinar Ports & Terminals Limited – – 146.10 124.01 – – 146.10 124.01

Interest others



Interest earned on inter corporate deposits / delayed payments


Essar Oilfield Services (India) Limited – – – 24.52 – – – 24.52




Essar Investments Limited – – – 0.77 – – – 0.77




Essar Dredging Limited – 1.33 – – – – – 1.33


Subhas Das – – – – 14.58 3.88 14.58 3.88

Printing & stationery

Essar Infrastructure Services limited – – 0.23 – – – 0.23 –

Staff welfare



Bank charges & commitment fees recovered




Advance towards investment in shares


Unsecured loan received


Vadinar Ports & Terminals Limited – – – 1,650.00 – – – 1,650.00

Guarantee given by others on behalf of Company


Essar Ports Limited 17,500.00 25,000.00 – – – – 17,500.00 25,000.00

179




(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Advances received

Essar Bulk Terminal (Salaya) Limited – – – 3,500.00 – – – 3,500.00

The outstanding balance as on

March 31, 2012

Sundry creditors




Essar House Services Limited – – 0.05 – – – 0.05 –






Essar Oil Limited – – 1.76 (0.12) – – 1.76 (0.12)

Aegis Limited – – 8.88 0.09 – – 8.88 0.09




Essar Information Technology Limited – – 0.45 – – – 0.45 –


Total – – 7,751.25 5,810.70 – – 7,751.25 5,810.70

Other current liabilities


Loans and advances given




Essar Group Salary-EIL – – 18.09 – – – 18.09 –

Subhas Das – – – – 0.73 – 0.73 –

Essar Agrotech Limited – – 0.74 – – – 0.74 –

Total 611.58 – 19.10 20.68 0.73 – 631.41 20.68

Other current assets



Total 319.00 – 343.48 – – – 662.48 –

Advances received

Essar Bulk Terminal (Salaya) Limited – – 1,689.67 3,500.00 – – 1,689.67 3,500.00

Deposits given

Essar Shipping Limited – – 150.00 150.00 – – 150.00 150.00

Advances towards share application

money given


Share application money


Total – – – 1,791.70 – – – 1,791.70



(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Unsecured loan

Vadinar Ports & Terminals Limited – – – 1,200.00 – – – 1,200.00

Total – – – 1,200.00 – – – 1,200.00

Interest payable on loan

Vadinar Ports & Terminals Limited – – 29.77 – – – 29.77 –

Total – – 29.77 – – – 29.77 –

Interest accrued but not due on loan

Vadinar Ports & Terminals Limited – – – 111.61 – – – 111.61

Total – – 111.61 – – – 111.61

Capital advances

Essar Dredging Limited – 1.78 – – – – – 1.78

Total – 1.78 – – – – – 1.78

Investments in shares


Essar Dredging Limited – – – 5.00 – – – 5.00

Essar Bulk Terminal Paradip Limited – – 58.84 0.66 – – 58.84 0.66

Total – – 163.06 109.88 – – 163.06 109.88

Sundry debtors


Essar Heavy Engineering Services Limited – – 7.56 7.52 – – 7.56 7.52


Essar Shipping Limited – – 1,693.71 947.90 – – 1,693.71 947.90







Essar Dredging Limited – – 0.99 – – – 0.99 –


Total 214.64 – 9,458.42 4,434.45 – – 9,673.06 4,434.45

Guarantee availed for loan taken

Essar Ports Limited 17,500.00 37,370.00 – – – – 17,500.00 37,370.00


Total 17,500.00 37,370.00 2,500.00 – – – 20,000.00 37,370.00

37 DEFERRED TAX LIABILITY/ (ASSET) (NET) The components of deferred tax asset and liabilities are as follows:

(Rs. in lakhs)


March 31, 2012 March 31, 2011


Depreciation on fixed assets (A) 2,502.65 1,176.86

Deferred tax assets

Net deferred tax liability /(asset) (A-B) 2,502.65 15.88

181




38 EMPLOYEE BENEFITS:

Accounting Standard (AS) 15 ‘Employee Benefits’ has been adopted by the Company effective from 1st April 2007. The

Company has classified the various benefits provided to employees as under:


a. Provident fund

b. Group accident policy cover

During the year, the Company has recognized the following amounts in the statement of Profit and Loss and

Expenditure during construction:

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Employer’s contribution to provident fund 52.34 38.28

Group accident policy cover 1.37 1.03


a. Contribution to Gratuity Fund

b. Provision for Compensated Absences (CA)

(A) Changes in present value of defined benefit obligation(Rs. in lakhs)


For the year ended For the year ended

March 31, March 31, March 31, March 31, 2012 2011 2012 2011

Present value of defined benefit obligation

at the beginning of the year 74.10 42.22 108.44 92.35

Current service cost 10.92 8.23 21.70 1.09

Interest cost 5.92 3.12 8.39 7.07

Planned Amendment – 21.54 – –

Benefits paid (0.19) (4.41) (7.12) (3.46)

Actuarial (gain)/loss on obligations 37.33 3.40 72.53 11.39


at the end of the year 128.08 74.10 203.94 108.44

(B) Changes in the fair value of plan assets(Rs. in lakhs)




Fair value of plan assets at the beginning of the year 69.43 20.99 – –

Expected return on plan assets 7.43 3.69 – –

Actuarial gains / (losses) (0.82) (0.06) – –

Contributions by the employer 36.08 49.22 – 3.46

Benefits paid (0.19) (4.41) – (3.46)

Fair value of plan assets at the end of the year 111.93 69.43 – –



(C) Amount recognized in the Balance Sheet

(Rs. in lakhs)






Fair value of plan assets at the end of the year 111.92 69.43 – –

Funded status [surplus/ (deficit)] (16.13) (4.66) (203.93) (108.44)

Liability/(asset) recognized in the balance sheet 16.14 4.50 203.93 108.44

(Included in note no. 6 & 9 of liability in Balance Sheet)

(D) Expenses recognized in the Statement of Profit and Loss and Expenditure during construction

(Rs. in lakhs)





Interest cost 5.92 3.12 8.39 7.07

Expected return on plan assets (7.43) (3.69) – –

Past service cost 0.16 21.38 – –

Net actuarial (gain)/loss recognized in the period 38.14 3.46 72.53 11.39

Total expenses recognized in the Statement

of Profit and Loss /Expenditure during

construction (Included in Employee benefit

expenses note no. 25) 47.71 32.50 102.62 19.55

(E) Experience history

(Rs. in lakhs)

Particulars Gratuity

Year ended (funded)

March 31, March 31, March 31,

2012 2011 2010

Defined Benefit Obligation at the end of the period (128.06) (74.09) (42.22)

Plan assets at the end of the year 111.92 69.43 20.99

Funded Status (16.14) (4.66) (21.23)

Experience Gain/(Loss) adjustments on plan liabilities (41.53) (4.40) (38.23)

Experience Gain/(Loss) adjustments on plan assets (0.82) (0.06) 0.03

Actuarial Gain/(Loss) due to change in Assumptions 4.21 1.00 (0.66)

183




(Rs. in lakhs)

Particulars CA

Year ended (non-funded)

March 31, March 31, March 31,

2012 2011 2010

Defined Benefit Obligation at the end of the period (203.93) (108.44) (92.35)

Plan assets at the end of the year – – –

Funded Status (203.93) (108.44) (92.35)

Experience Gain/(Loss) adjustments on plan liabilities (76.95) (12.46) (73.48)

Experience Gain/(Loss) adjustments on plan assets – – –

Actuarial Gain/(Loss) due to change on Assumptions 4.42 1.07 (6.54)

(F) Category of plan assets

The Company’s plan assets in respect of gratuity are funded through the group gratuity scheme administered by the

Life Insurance Corporation of India.


In accordance with Accounting Standard (AS)15 (Revised), actuarial valuation as at the year end was done in

respect of the aforesaid defined benefit plans based on the following assumptions:

i) General Assumptions

Particulars Gratuity (Funded) CA (Non Funded)



Discount Rate (per annum) 8.50% 8.00% 8.50% 8.00%

Rate of return on plan assets

(for funded scheme) 8.50% 8.50% N.A. N.A.

Expected Retirement age of


Withdrawal rate of employees 8.00% 8.00% 8.00% 8.00%

Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-1996) Mortality table.

iii) Leave availment pattern

Sick leave balance as at the valuation date and each subsequent year following the valuation date will be availed by the

employee against future sick leave. The sick leave balance is not available for encashment.

Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the

employee is available for encashment on separation from the Company.



39 The Company operates in only one segment of Ports and Terminal business and has only one geographical

segment – India.

40 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and Medium

Enterprises Development Act, 2006 (the Act) and hence the disclosures as required under the said Act have not been furnished.

The Company is making effort to get confirmation from the suppliers as regards their status under the Act.

41 Previous year’s figures have been regrouped / reclassified wherever necessary to confirm to figures of the current year.






Mumbai Mumbai

May 29, 2012 May 29, 2012

185


ESSAR BULK TERMINAL (SALAYA) LIMITED

BOARD OF DIRECTORS

Rajiv Agarwal

Director

K. K. Sinha

Director

Shailesh Sawa

Director

Capt. Rajen Sachar

Executive Director


REGISTERED OFFICE

27th KM.

Surat-Hazira Road

Hazira

Gujarat 394 270

AUDIT COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

AUDITORS


CORPORATE OFFICE

Essar House


Mahalaxmi

Mumbai 400 034


Directors’ Report Directors’ Report

The Directors have pleasure in presenting the Fifth Annual Report together with the Audited Accounts of the Company for

the year ended March 31, 2012.

FINANCIAL RESULTS


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Total Expenditure 36.77 11.64

Net Profit / (Loss) (36.77) (11.64)

PROJECT REVIEW AND OPERATIONAL HIGHLIGHTS

Your Company is setting up a green field port capable of handling 20 million metric tons of cargo per annum. The port is

expected to be completed by September 2013.

The work of construction of the jetty is in progress. Your Company has already commissioned the Emergency Coal

Feeding and Stacker cum Reclaimer in the coal stockyard.

Dredging operations in the 14 km long Salaya Channel is in progress and the conveyor is also in advanced stage of

completion.

DIVIDEND

Since your Company has not commenced operations, your Directors have not recommended any dividend on equity

shares and the 0.01% Compulsorily Convertible Cumulative Preference Shares for the period under review.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,

Shri. K. K. Sinha, retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for

re-appointment.

Capt. Rajen Sachar and Shri. Dipankar have been appointed as Additional Directors in the wholetime employment of

the Company designated as Executive Director and Managing Director respectively. They hold office upto the date of

the ensuing Annual General Meeting. The Company has received a notice from a member proposing the candidature of

Capt. Rajen Sachar and Shri. Dipankar Pal as Directors of the Company.

AUDITORS

Your Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registered

No.117365W retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. It

is proposed to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad as the Auditors of the

Company from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.

HOLDING COMPANY

Your Company is the subsidiary of Essar Ports Limited.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPOTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the

Report of Board of Directors), Rules 1988, relating to Energy Conservation and Technology Absorption are not applicable

to your Company.

Your Company did not earn nor did it spend any foreign exchange during the year.

187











that:




(b) the Directors have selected such accounting

policies and applied them consistently and made

judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the

state of affairs of the Company at the end of the

financial year;






and



ACKNOWLEDGEMENTS




Your Directors also thank Gujarat Maritime Board, its

Bankers and other business associates for their continued

support and co-operation during the year.


Rajen Sachar Shailesh Sawa


August 29, 2012


Auditors’ Report

TO THE MEMBERS OF



ESSAR BULK TERMINAL (SALAYA) LIMITED (“the

Company”) as at 31st March, 2012, the Statement

of Profit and Loss and the Cash Flow Statement of

the Company for the year ended on that date, both





















Companies Act, 1956, we enclose in the Annexure

a statement on the matters specified in paragraphs 4



in paragraph 3 above, we report as follows:




audit;

b. in our opinion, proper books of account as



those books;

c. the Balance Sheet, the Statement of Profit and



account;













(i) in the case of the Balance Sheet, of the


March, 2012;

(ii) in the case of the Statement of Profit and



(iii) in the case of the Cash Flow Statement, of


ended on that date.





being appointed as a director in terms of Section

274(1)(g) of the Companies Act, 1956.




Khurshed Pastakia

Partner

Mumbai (Membership No. 31544)

May 26, 2012

189





(i) Having regard to the nature of the Company’s

business/activities/result, clauses (viii), (xii), (xiii), (xiv),

(xv), (xviii), (xix), (xx) of CARO are not applicable.






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 explanation

given to us, no material discrepancies were

noticed on such verification.

(c) There was no disposal of fixed assets during

the year.

(iii) The Company does not have inventory in the current

financial year; hence, provisions of clause (ii) of the

Order are not applicable.

(iv) 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. Hence, provisions of clauses (iii) (b) to (iii)

(g) of the Order are not applicable to the Company.


explanations give to us, there are adequate internal

control systems commensurate with the size of

the company and the nature of its business with

regard to purchases of fixed assets. The nature

of the Company’s activities is such that it did not

require purchase of inventory or sale of good and

services. During the course of our audit, we have

not observed any major weakness in such internal

control system.

(vi) In our opinion and according to the information and


arrangements that need to entered into the register

maintained in pursuance of Section 301 of the

Companies Act, 1956. Hence the provision of clause

(v) of the Order is not applicable to the company.

(vii) According to the information and explanations given

to us, the Company has not accepted any deposit

from the public during the year. Hence the provision

of clause (vi) of the Order is not applicable to the

company.

(viii) In our opinion, the internal audit system of the



(ix) According to the information and explanations given

to us in respect of statutory dues:

(a) The Company has been regular in depositing

undisputed dues, including Provident Fund,

Income-tax, Service Tax, Custom Duty, Cess

and other material statutory dues applicable

to it with the appropriate authorities. Except

in case of Professional tax and Service tax

where certain instances of delay have been

observed. As informed to us, the provisions

for Investment Education and Protection Fund,

Employee’s State Insurance, Sales Tax, Wealth

Tax and Excise duty were not applicable to

the Company during the year.

(b) There were no undisputed amounts payable

in respect of above statutory dues in arrears

as at 31st March, 2012 for a period of more

than six months from the date they became

payable.

(c) There was no due pending to be deposited on

account of any dispute in respect of Income-

tax, Service Tax, Custom Duty and Cess as

on 31st March, 2012.

(x) The Company has been registered for a period less

than five years. Hence the provision of clause (x) of

the Order is not applicable to the Company.

(xi) In our opinion and according to the information


not defaulted in the repayment of dues to banks

and financial institutions. The Company has not

borrowed any money by way of debentures.


explanations given to us, the term loans have been

applied for the purposes for which they were obtained,

other than temporary deployment pending application.

(xiii) On the basis of an overall examination of the

balance sheet as at 31st March, 2012 and the

cash flow statement of the Company for the year

then ended and according to the information and

explanation given to us, we report that funds raised

on short-term basis amounting to Rs. 170.62 lakhs

have, prima facie, been used for long term purpose.








Khurshed Pastakia

Partner


Mumbai

May 26, 2012


Notes forming part of financial statementsBalance Sheet as at March 31, 2012



Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa Partner Executive Director Director

Mumbai Mumbai May 26, 2012 May 26, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011



(a) Share capital 3 20,807.85 13,000.49

(b) Reserves and surplus 4 (53.45) (16.68)

20,754.40 12,983.81



(b) Other long-term liabilities 6 3,549.27 6,359.76

(c) Long-term provisions 7 23.55 20.17

43,640.61 25,352.81


(a) Other current liabilities 8 1,442.48 5,657.77

(b) Short-term provisions 9 2.17 1.83

1,444.65 5,659.60

Total 65,839.66 43,996.22

II. ASSETS


(a) Fixed assets

(i) Tangible assets 10 48.51 –

(iii) Capital work-in-progress 11 49,067.48 23,902.17

(b) Loans and advances 12 15,319.00 19,163.13

(c) Other non-current assets 13 130.64 73.15

64,565.63 43,138.45

2 Current assets

(a) Cash and bank balance 14 216.52 547.64

(b) Loans and advances 15 569.72 300.99

(c) Other current assets 16 487.79 9.14

1,274.03 857.77

Total 65,839.66 43,996.22


191








Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa


Mumbai Mumbai

May 26, 2012 May 26, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011

I. REVENUE FROM OPERATIONS – –

II. Other income – –

III. Total Revenue (I + II) – –

IV. EXPENSES:

Administration and other expenses 17 36.77 11.64

V. Total Expenses 36.77 11.64

VI. Profit before tax (III-V) (36.77) (11.64)

VII. Tax expenses – –

VIII. Loss for the year (VI - VII) (36.77) (11.64)

IX. Earnings per equity share (face value of Rs.10/- each)

(1) Basic and diluted 21 (1.27) (0.41)




(Rs. in lakhs)


March 31, 2012 March 31, 2011

(I) CASH FLOW FROM OPERATING ACTIVITY

Profit (Loss) before exceptional / extraordinary items for the year (36.77) (11.64)

Adjustment for :

Share issue expense written off 17.47 9.14

Operating loss before working capital changes (19.30) (2.50)

Income tax paid (15.29) (33.74)

Income tax refund 0.23 –

Net cash used in operating activity (I) (34.36) (36.24)

(II) CASH FLOW FROM INVESTING ACTIVITY

Capital work-in-progress and capital advances (14,814.98) (39,203.12)

Purchase of fixed assets (55.69) –


Sale of current investments 2,913.29 19,110.87

Loans and advances to body corporate (55.26) –

(Increase) / decrease in loans and advances and other current assets (1,332.80) (359.66)

Increase / (decrease) in current liabilities and provisions 826.98 821.05

Fixed deposits placed with banks (8.00) –

Interest income on fixed deposits 6.91 11.40

Interest received on deposits given to body corporates 5.84 –

Net cash flow used in investing activity (ii) (15,413.71) (38,632.66)

(III) CASH FLOW FROM FINANCING ACTIVITY

Interest and finance cost (4,061.03) (2,330.77)

Proceeds from issue of preference shares 2,800.00 12,700.00

Share application money received – 5,007.36

Proceeds from unsecured loans – 40.00

Repayment of unsecured loans – (2,165.00)

Acceptance of bills payable 3,655.06 11,622.64

Payment of bills payable on maturity (6,776.21) (5,275.38)

Proceeds from secured loans 19,574.43 18,938.38

Share issue expenses (83.30) (56.70)

Net cash flow from financing activity (iii) 15,108.95 38,480.53

Net increase / (decrease) in cash and cash equivalents (i + ii + iii) (339.12) (188.37)

Opening cash and cash equivalents 547.64 736.01

Closing cash and cash equivalents 208.52 547.64

193







Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa


Mumbai Mumbai

May 26, 2012 May 26, 2012


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Note:

1. Reconciliation between closing cash and cash equivalents and

cash and bank balance

Closing cash and cash equivalents as per cash flow statement 208.52 547.64

Add: bank deposit not considered as cash equivalents as per AS-3 8.00 –

Closing cash and bank balance as per note no. 14 216.52 547.64

2. Closing cash and cash equivalents include bank deposits of Rs. 8.33 lakhs which has lien marked against

guarantee facility provided by the banks.

3. Non - Cash Transaction

During the current year, the Company has issued 5,00,73,630 - 0.01% compulsorily convertible cumulative

participating preference shares of Rs.10/- each for Rs. 5,007.36 lakhs against share application money received in

previous year.





Essar Bulk Terminal (Salaya) Limited (EBTSL), a company

incorporated under the Companies Act, 1956 is setting

up a world class marine infrastructure with state-of-the-art

material handling facility capable of handling 20 MMTPA

cargo. The Jetty will be located in the Salaya harbour near

Jamnagar district in the State of Gujarat. Presently, EBTSL

is developing one berth with associated material handling

facilities to handle imported coal for the upcoming power

plants – Essar Power Gujarat Limited and Vadinar Power

Company Limited and export of Pet Coke for Essar Oil

Limited. In future EBTSL has plans to develop the port

facility to be capable of handling imported Lime Stone,

Fertilizers, Crude and export of Pet Coke, Petrochemicals,

POL products and Bauxite.



The financial statements are prepared under the historical

cost convention, on accrual basis of accounting, and

are in accordance with generally accepted accounting


Accounting Standards referred to in sub-section (3C) of










2.3 Tangible Fixed Assets, Depreciation/Amortisation

Fixed assets are recorded at cost less accumulated


inclusive of non-refundable duties and taxes and cost







made during the year is provided on a pro-rata basis from

/ up to the date of such additions / deductions, as the

case may be.

2.4 Capital Work in Progress and Expenditure During

Constructions

Direct expenditure on asset under construction is shown

under capital work-in-progress.

Project management consultancy, technical fees and other

expenditure incidental to the construction of jetty that take

substantial period of time to get ready for their intended

use are accumulated as expenditure during construction

pending allocation to fixed assets and other accounts, as

applicable on completion of the project.






loans and advances.

2.5 Borrowing Cost





asset is not capitalised; and is charged to the statement



the intended use.



are amortised and charged to the statement of profit and

loss, over the tenure of the loan.










2.7 Taxes on Income

The provision for current taxation is computed in

accordance with the relevant tax regulations. Deferred

tax is recognised on timing differences between the

accounting and the taxable income for the period

and quantified using the tax rates and laws enacted or

substantively enacted as on the balance sheet date.

Deferred tax assets are recognised and carried forward

to the extent that there is a reasonable certainty that

sufficient future taxable income will be available against

which such deferred tax assets can be realised in future.

Deferred tax assets relating to unabsorbed business

losses on unabsorbed depreciation are recognised when

195




there is a virtual certainty supported by the convincing

evidence that there will sufficient taxable profit to utilise

them.


Assets








occurrence of one or more uncertain future events

not wholly within the control of the Company or a

present obligation that is not recognised because

a reliable estimate of the liability cannot be made

or likelihood of an outflow of resources is remote.

Contingent assets are not recognised or disclosed in the

financial statements.


















(a) The Company (employer) and the employees


employees’ salary- currently 12%, to the












(b) Provision for gratuity for staff is made on

actuarial valuation. Contribution in respect

of gratuity for staff is made to Life Insurance

Corporation of India based on demands

made. The Company also accounts for

gratuity liability based on an independent

actuarial valuation carried out at every

statutory year end.

(c) Contribution towards superannuation, funded




Contribution plan, and is charged to the


(d) Provision for all compensated absences

of eligible employees is based on an




3 SHARE CAPITAL


No. of shares Rs. in lakhs No. of shares Rs. in lakhs

(a) Authorised

Equity shares of Rs. 10/- each 4,000,000 400.00 4,000,000 400.00

Preference shares of Rs 10/- each 246,000,000 24,600.00 127,000,000 12,700.00

25,000.00 13,100.00


Equity shares of Rs. 10/- each 3,004,875 300.49 3,004,875 300.49

0.01% Compulsorily convertible cumulative

participating preference shares of Rs.10/- each 205,073,630 20,507.36 127,000,000 12,700.00

20,807.85 13,000.49

(b) Reconciliation of the shares outstanding

at the beginning and at the end of the

reporting period




At the beginning of the year 3,004,875 300.49 3,004,875 300.49


Outstanding at the end of the year 3,004,875 300.49 3,004,875 300.49

b) 0.01% Compulsorily convertible cumulative

participating preference shares of Rs.10/- each

At the beginning of the year 127,000,000 12,700.00 3,004,875 300.49

Add: Issue of shares 78,073,630 7,807.36 127,000,000 12,700.00



The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder

is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the

approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity

shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential

amounts, in proportion to their shareholding.

(d) Terms / rights attached to Preference shares

(i) Fixed dividend on preference shares : the CCCPPS have fixed dividend of 0.01% p.a. from the date of

allotment on cumulative basis.

(ii) Participating Dividend : CCCPPS holders have the same rights to dividend as that of the equity share holder

over and above the fixed dividend.

(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs.10/- each at par at the

end of twenty years from the 28th March 2012. The CCCPPS holders shall have the option to convert

the CCCPPS into equity shares any time after the expiry of one year from the date of allotment of the

CCCPPS.

(iv) Equity shares issued upon conversion of the CCCPPS shall rank pari passu with the existing equity shares.

197




(e) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the

shareholding more than 5% shares in the company


No. of shares Rs. in lakhs % No. of shares Rs. in lakhs %


Essar Ports Limited (formerly

known as Essar Shipping

Ports & Logistics Limited),

the holding company 3,004,875 300.49 100.00% 3,004,875 300.49 100.00%

3,004,875 300.49 100.00% 3,004,875 300.49 100.00%

b) 0.01% Compulsorily convertible

cumulative participating preference

shares of Rs. 10/- each

Essar Ports Limited (formerly known

as Essar Shipping Ports & Logistics

Limited), the holding company 205,073,630 20,507.36 100.00% 127,000,000 12,700.00 100.00%

205,073,630 20,507.36 100.00% 127,000,000 12,700.00 100.00%


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Deficit in statement of profit and loss

Opening balance (16.68) (5.04)

Add: loss for the year (36.77) (11.64)

Closing balance (53.45) (16.68)

5 LONG - TERM BORROWINGS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Secured long term borrowings

(i) Term loans from banks 27,836.00 12,275.38

(ii) Foreign currency buyers credit 12,231.79 6,697.50

Total 40,067.79 18,972.88

Note :

(a) Secured rupee term loan from bank carrying interest rates ranging from 14% to 17% (base rate +/- spread) per

annum. Repayment of term loan is in 36 quarterly installments from quarter ending June, 2014 to quarter ending

March, 2023.

(b) Foreign currency buyers credit carrying interest rate ranging from 2.62% to 3.62% (LIBOR plus spread) per annum.

Buyers credit facility are part of the consortium agreement will get converted into rupee term loan. Repayment

schedule is as per note (a) above

(c) Term loan and foreign currency buyers credit are secured by first mortgage and charge of all present and

future movable and immovable assets / properties of the Company. The loan is further secured by corporate

guarantee of Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited) for Rs. 67,960

lakhs.



6 OTHER LONG - TERM LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Others

(i) Acceptances (issued under letters of credit issued in favour of the

company by lender banks and to be converted into term loans) 3,536.77 6,347.26

(ii) Retention money - capital creditors 12.50 12.50

Total 3,549.27 6,359.76

7 LONG - TERM PROVISIONS

(Rs. in lakhs)




2012 2011 2012 2011

(A) Provision for employee benefits

(i) Provision for compensated absences

(refer note 25 ( B ) ) 11.12 9.56 1.27 1.01

(ii) Provision for gratuity (refer note 25 ( B ) ) 10.61 7.48 0.90 0.82

(B) Other provisions

(i) Provision for taxation (net of advance tax) 1.82 3.13 – –

Total 23.55 20.17 2.17 1.83

Less : amount disclosed under the head

“short term provisions” (refer note 9) – – 2.17 1.83

Total 23.55 20.17 – –


(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Interest accrued but not due on borrowings

Foreign currency buyers credit 109.82 17.96

(B) Share Application money received pending allotment of securities** – 5,007.36

(C) Other payables

(i) Payable (refer note 23)

(a) For expense 398.95 453.83

(b) Payable on purchase of fixed assets 838.70 33.48

(ii) Other liabilities (statutory dues for tax deducted at source,

provident fund and reimbursement expenses dues to employees) 95.01 145.14

Total 1,442.48 5,657.77

** During the previous year, share application money received in excess of authorised share capital which is classified

as part other current liabilities.

9 SHORT TERM PROVISIONS (Rs. in lakhs)


March 31, 2012 March 31, 2011

Provision for employee benefits (refer note 7) 2.17 1.83

Total 2.17 1.83

199




10

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(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Capital work-in-progress 38,224.41 20,680.98

(B) Expenditure during the construction (see below) 10,843.07 3,221.19

Total 49,067.48 23,902.17

Expenditure During Construction As at March Incurred As at

31, 2011 During the Year March 31, 2012

Survey charges 21.56 – 21.56

Consultancy and professional fees 309.55 651.35 960.90

Travelling and courier expenses 14.81 91.01 105.82

Insurance expenses 38.67 0.05 38.72

Finance cost 1,903.88 4,287.98 6,191.86

Employee cost 208.03 338.21 546.24

Loss on foreign currency transaction and translation 34.50 1,520.48 1,554.98

Other expenses 764.07 1,040.81 1,804.89

Depreciation – 7.18 7.18

3,295.07 7,937.07 11,232.15

Less: Other income (interest on fixed deposit,

profit on sale of unit of mutual fund and support

services (net of tax) (73.88) (315.20) (389.08)

Total expenditure during the construction 3,221.19 7,621.87 10,843.07

12 LOANS AND ADVANCES

(Rs. in lakhs)




2012 2011 2012 2011

Unsecured, considered good

(A) Capital advance

– To related parties (refer note 26) 12,810.83 18,319.75 – –

– To others 957.20 – – –

(B) Security deposit 134.51 1.51 – –

(C) Loans & advances to related parties

(refer note 26)

(i) For expense 556.05 – 307.73 5.32

(D) Prepaid expense - unamortised borrowing cost 381.13 467.07 176.88 293.31

(E) Balance with excise authorities 474.53 374.80 – –

(F) Advance tax (net of provision) 4.75 – – –

Total 15,319.00 19,163.13 484.61 298.63


“loans and advances” (refer note 15) – – 484.61 298.63

Total 15,319.00 19,163.13 – –

201





(Rs. in lakhs)



2012 2011 2012 2011

Others

(i) Share issue expenses

(pending for amortisation) 130.64 73.15 17.47 9.14

Total 130.64 73.15 17.47 9.14

Less : Amount disclosed under the head

“other current assets” (refer note 16) 17.47 9.14

Total 130.64 73.15 – –

14 CASH & BANK BALANCE

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Cash and cash equivalents

(i) Bank balances in current Accounts 200.36 303.50

(iii) Margin money

– In time deposits (lien against facility of bank guarantee)

with maturity of less than 3 months 8.16 244.14

208.52 547.64

(B) Other cash and bank balances

(i) Margin money

– In time deposits (lien against facility of bank guarantee)

with maturity of more than 3 months and less than 12 months. 8.00 –

Total 216.52 547.64


(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Loans and advances to related parties (refer note 26)

(i) Inter corporate deposits (including interest accrued but not due) 55.26 –

(ii) Advances for expense (refer note 12) 307.73 5.32

(B) Other loans and advances

(i) Advances to vendor 29.85 2.36

(ii) Prepaid expense (refer note 12) 176.88 293.31

Total 569.72 300.99


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Others

(i) Other receivables 469.94 –

(ii) Share issue expenses (refer note 13) 17.47 9.14

(iii) Interest accrued on time deposits 0.38 –

Total 487.79 9.14



17 ADMINISTRATION & OTHER EXPENSE

(Rs. in lakhs)

Particulars For the For the


March 31, 2012 March 31, 2011

1) Remuneration to statutory auditors

(i) for audit fees 1.00 1.00

(ii) for other assurance services 18.00 1.50

(iii) for reimbursement of expenses 0.30 –

2) Share issue expenses written off 17.47 9.14

Total 36.77 11.64

18 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Unpaid dividend on preference shares issued 1.77 0.56

(B) Estimated amount of contract remaining to be executed on

capital account and not provided for tangible fixed assets 38,566.18 34,732.01

Total 38,567.95 34,732.57


(Rs. in lakhs)



March 31, 2012 March 31, 2011

Travelling expenses 0.08 –

Total 0.08 –


The Company has not entered into any forward / option exchange contract to hedge its foreign currency exposure.


given below:

Amount payable on account of foreign currency :


March 31, 2012 March 31, 2011

Amount in lakhs Amount in lakhs

INR USD INR USD

(A) Buyers credit 12,231.79 239.11 6,697.50 150.00

(B) Interest payable on buyers credit 109.82 2.15 17.96 0.40

(C) Import of equipment 45.77 0.89 – –

Total 12,387.38 242.15 6,715.46 150.40

203







March 31, 2012 March 31, 2011

Earnings / (loss) for the year for the purpose of earning per share

(Rs. in lakhs) (net loss for the year) (36.77) (11.64)

Unpaid dividend on compulsorily convertible cumulative participating

preference shares (Rs. in lakhs) 1.28 0.56

Loss attributable to equity shareholders in (Rs. in lakhs) (38.05) (12.20)

No. of equity shares at the beginning of the year 3,004,875 3,004,875

No. equity shares issued during the year – –

No. of equity shares at the end of the year 3,004,875 3,004,875

Weighted average number of equity shares outstanding during the year 3,004,875 3,004,875

Earnings per share - basic (Rs.) (1.27) (0.41)

Face value per share (Rs.) 10.00 10.00

Note: 0.01% CCCPPS have not been considered for purpose of calculation of the weighted average number of

equity shares for dilution purposes as they are anti-dilutive.

22 SEGMENT REPORTING

The Company operates in only one segment of ports and terminals business and only one geographical segment

i.e. India.

23 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT

The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and

Medium Enterprise Development Act, 2006 and hence disclosures relating to amount unpaid as at the end of the

year, together with interest paid / payable as required under the said Act has not been furnished and provision for

interest, if any, on delayed payments, is not ascertainable at this stage.

24 CIF VALUE OF IMPORTED GOODS

(Rs. in lakhs)



March 31, 2012 March 31, 2011

CIF value of imports - capital goods 5,001.82 –

Total 5,001.82 –




a. Provident fund


During the year, the Company has recognised the following amounts in the statement of profit and loss /

expenditure during construction.

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(i) Employer’s contribution to provident fund 11.74 8.47

(ii) Employer’s contribution to superannuation fund – 0.25

(iii) Premium paid in respect of group life insurance cover 3.21 8.30

Total 14.95 17.02




a. Gratuity

b. Compensated absences (CA)



(Rs. in lakhs)

Particulars Gratuity (Non-funded) CA (non funded)



2012 2011 2012 2011

(i) Present value of defined benefit

obligation at the beginning of the year 8.30 – 10.57 –

(ii) Current service cost 2.19 8.30 2.62 10.57

(iii) Interest cost 0.66 – 0.80 –

(iv) Plan amendments – – –

(v) Acquisitions / (transfers) – – – –

(vi) Benefits paid – – (1.22) (0.02)

(vii) Actuarial (gain) / loss on obligations 0.36 – (0.37) 0.02



(B) Amount recognised in the Balance Sheet(Rs. in lakhs)

Particulars Gratuity (Non-funded) CA (Non-funded)



2012 2011 2012 2011

(i) Present value of defined benefit

obligation at the end of the year 11.51 8.30 12.39 –

(ii) Fair value of plan assets at the

end of the year – – – –

(iii) Funded status surplus / (deficit) (11.51) (8.30) (12.39) (10.57)

Of which :

Current 0.90 0.82 1.27 1.00

Non Current 10.61 7.48 11.12 9.57

11.51 8.30 12.39 10.57

Refer note 6 - long term provisions

(C) Expenses recognised in the statement of profit and loss / expenditure during the construction

(Rs. in lakhs)




2012 2011 2012 2011

(i) Current service cost 2.19 8.30 2.62 1.09

(ii) Interest cost 0.66 – 0.80 –

(iii) Net actuarial (gain) / loss recognised

in the period 0.36 – (0.37) 9.50

Total 3.21 8.30 3.05 10.59

205




(D) Experience History

(Rs. in lakhs)




2012 2011 2012 2011

(i) Defined benefit obligation (11.51) (8.30) (12.39) (10.57)

(ii) Funded status (11.51) (8.30) (12.39) (10.57)

(iii) Experience gain / (loss)

adjustments on plan liabilities (0.76) – (0.08) (9.50)

(iv) Actuarial gain / (loss) due to

change on assumptions 0.40 – 0.45 –

(E) Actuarial assumptions

i) General Assumption

(Rs. in lakhs)




2012 2011 2012 2011

(i) Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%

(ii) Rate of return on plan assets

(for funded scheme) 8.50% N.A. N.A. N.A

(iii) Expected retirement age of


(iv) Withdrawal rate of employees 8.00% 8.00% 8.00% 8.00%

(v) Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality

table.

iii) Leave Policy

Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not

availed by the employee (maximum to the extent of 120 days) is available for encashment on separation from

the Company.

26 RELATED PARTY DISCLOSURE

A Holding Company:

Essar Global Limited, Cayman Islands (ultimate holding company)

Essar Shipping & Logistics Limited, Cyprus (intermediate holding company )

Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited), (immediate holding company)

B Fellow subsidiaries / other related parties / affiliated / where there have been transactions:

Aegis Limited






Essar House Limited




Essar Paradip Terminals Limited

Essar Power Gujarat Limited


Essar Projects Management Consultants Limited



Global Supply FZE

The Mobile Store Limited

Vadinar Oil Terminal Limited

C Key management personnel:

Capt. Rajen Sachar - Executive Director (w.e.f. 17.10.2011)

(Rs. in lakhs)

Nature of Transaction Holding company Other related Key management

parties personnel Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Allotment of 0.01% CCCPPS shares


Advance received towards share

application money

Essar Ports Limited * – 5,007.36 – – – – – 5,007.36

Repayment of loan

Essar Ports Limited * – 2,125.00 – – – – – 2,125.00

Deposit given



Total – – – – – – 133.00 –

Purchase of fixed assets / C.W.I.P.

Essar projects (India) Limited – – 10,508.67 11,984.74 – – 10,508.67 11,984.74



Global Supply FZE – – 4,499.99 – – – 4,499.99 –

Total – – 15,948.48 12,705.45 – – 15,948.48 12,705.45

* formerly known as Essar Shipping Ports & Logistics Ltd.

207




(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Recovery of expenses


Interest Income on ICD

Essar Paradip Terminals Limited – – 5.84 – – – 5.84 –

Interest expense

Essar Ports Limited * – 31.60 – – – – – 31.60

Expenditure incurred during construction

Vadinar Oil Terminal Limited

(Administrative expenses) – – – 759.42 – – – 759.42

Aegis Limited – – 27.46 10.10 – – 27.46 10.10



Essar Bulk Terminal Limited – – 348.77 – – – 348.77 –



Essar Infrastructure Limited – – 83.85 – – – 83.85 –

Futura Aviation – – 77.00 – – – 77.00 –



Essar Power (Gujarat) Limited – – 19.65 – – – 19.65 –


Essar Service India Limited – – 47.66 – – – 47.66 –

Total 450.00 – 1,439.95 775.16 – – 1,889.95 775.16

Deposit given


Remuneration

Capt. Rajen Sachar # – – – – 22.12 – 22.12 –


# figure does not include the amount payable gratuity and compensated absence by the Company as the same is calculated for the Company as a

whole on actuarial basis.


(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Capital advances (including

consultancy charges)

Essar Projects Management Consultants

Limited – – 38.88 38.88 – – 38.88 38.88


Essar Bulk Terminal Limited – – 1,689.67 3,500.00 – – 1,689.67 3,500.00

Global Supplies FZE – – – 432.30 – – – 432.30

Total – – 12,810.12 18,319.76 – – 12,810.12 18,319.76



(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Loans and advances including

deposits given


Essar House Limited - Deposit – – 28.00 – – – 28.00 –

Essar Infrastructure Services Limited - Deposit – – 105.00 – – – 105.00 –


The Mobile Store Limited – – 0.35 – – – 0.35 –

Essar Paradip Terminal Limited – – 55.26 – – – 55.26 –

Total 754.05 – 288.61 – – – 1,042.66 –

Receivable


Retention money

Essar Projects Management Consultants

Limited – – 12.50 12.50 – – 12.50 12.50

Sundry creditors

Aegis Limited – – 4.75 9.09 – – 4.75 9.09


Essar Logistics Limiyed – – 599.63 518.49 – – 599.63 518.49



Global Supply FZE – – 45.77 – – – 45.77 –



Vadinar Oil Terminal Limited – – 3.31 220.00 – – 3.31 220.00


Essar Service India Limited – – 40.95 – – – 40.95 –

Total – – 848.06 754.29 – – 848.06 754.29

Advance towards share

application money

Essar Ports Limited* – 5,007.36 – – – – – 5,007.36

Guarantees given by on behalf of

Company



27 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year

classification as per the requirement of the revised schedule VI notified under the Companies Act, 1956.


Capt. Rajen Sachar Shailesh Sawa


Mumbai

May 26, 2012

209


ESSAR BULK TERMINAL PARADIP LIMITED


Rajiv Agarwal

Director

K. K. Sinha

Director

Shailesh Sawa

Director

Capt. Rajesh Beri

Executive Director

REGISTERED OFFICE

Essar House

Opp. Gujarat College

Near Hotel Inder Residency

Ellisbridge

Ahmedabad

Gujarat - 380 006

AUDIT COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

AUDITORS


CORPORATE OFFICE

Essar House


Mahalaxmi

Mumbai - 400 034


Directors’ Report

Your Directors have pleasure in presenting the third Annual Report together with the Audited Accounts of the Company

for the year ended March 31, 2012.

FINANCIAL RESULTS


(Rs. in lakhs)

Particulars For the year ended For the yearended

March 31, 2012 March 31, 2011


Gross Profit/(Loss) (19.50) (5.95)

Add: Balance in the Profit and Loss Account as per last Balance Sheet (7.38) (1.43)

Balance carried forward to Balance Sheet (26.88) (7.38)

PROJECT REVIEW AND OPERATIONAL HIGHLIGHTS

Your Company has undertaken a project of mechanisation of an existing berth on the central dock at the Paradip Port in

Odisha to handle dry bulk cargo, including iron ore with a capacity to handle upto 16 million metric tons per annum of

bulk cargo (the Project).

Paradip Port Trust (PPT) has granted your Company a licence for the mechanisation and operation of the berth. The

Project was awarded to the Company pursuant to a tender process by the PPT. The licence is valid for a period for 10

years and may be extended for a further period of five years. PPT has allocated approximately 230 metres of waterfront to

your Company for the mechanisation of the berth and operation of its facilities.

The berth has a length of 230 metres and a draft of 12.5 metres. The following facilities are being constructed:

bins with a capacity of 5,000 TPH is also being erected. Conveyor of about 7 kilometre has been erected.

under erection.

Your Company has entered into a long-term cargo handling agreement with Essar Steel India Limited for the entire period

of its licence for the mechanised berth at Paradip, under which your Company will handle the export of iron ore pellets

from Essar Steel’s pelletisation plant at Paradip.

Paradip port is connected to the four lane National Highway 5A and the East Coast Railway is 5 kilometres from the

port boundary. An additional railway link between Paradip to Haridaspur is being developed by Indian Railways, which

is expected to improve the competitiveness of the terminals at Paradip port as compared to other nearby ports. The

additional railway link is expected to be complete in 2015.

The Project is expected to be fully operational shortly.

DIVIDEND

Since your Company is yet to commence operations, your Directors have not recommended any dividend on the equity

shares and the 0.01% Compulsorily Convertible Cumulative Participating Preference Shares for the year under review.

FIXED DEPOSITS


Directors’ Report

211



DIRECTORS

In accordance with the provisions of the Companies Act,

1956 and the Articles of Association of the Company, Shri.

K. K. Sinha retires at the ensuing Annual General Meeting

of the Company and being eligible, offers himself for re-

appointment.

During the year under review Capt. Rajesh Beri

has been appointed as a Director in the wholetime

employment of the Company designated as Executive

Director.

The Company has received a notice from a member under

Section 257 of the Companies Act, 1956, with requisite

deposit proposing the name of Capt. Beri as a candidate

for the office of Director of the Company.

AUDITORS

Your Company’s Auditors, M/s. Deloitte Haskins & Sells,

Chartered Accountants, Ahmedabad having Registered

No.117365W retire at the conclusion of ensuing Annual

General Meeting and are eligible for re-appointment. It

is proposed to re-appoint M/s. Deloitte Haskins & Sells,

Chartered Accountants, Ahmedabad as the Auditors of

the Company from the conclusion of this Annual General

Meeting until the conclusion of next Annual General

Meeting.

HOLDING COMPANY




AND OUTGO






As regards foreign exchange earnings and outgo, your

Company did not earn nor did it spend any foreign

exchange during the year.









that:











and



ACKNOWLEDGEMENTS



teamwork and contribution to the development of the

Project.

Your Directors also thank the Paradip Port Trust, its




K. K. Sinha Shailesh Sawa

Mumbai Director Director

May 26, 2012


Auditors’ Report

AUDITORS’ REPORT

TO THE MEMBERS OF



ESSAR BULK TERMINAL PARADIP LIMITED (“the
























Companies Act, 1956, we enclose in the Annexure

a statement on the matters specified in paragraphs 4






























ended on that date.










Khurshed Pastakia

Partner


Mumbai

May 26, 2012

213





business/activities/result, clauses (viii), (xii), (xiii), (xiv),

(xv), (xviii), (xix) and (xx) of CARO are not applicable.




details and situation of the fixed assets other

than assets under construction.


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 explanation given to us,

no material discrepancies were noticed on such

verification.

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

year.


The Company does not have inventory in the current

Order are not applicable.



firms or other parties listed in the Register maintained

under Section 301 of the Companies Act, 1956.

Hence, the provisions of clause (iii) (b) to (iii) (g) of the

Order are not applicable to the Company.


explanations given to us, there are adequate internal

control systems commensurate with the size of the

company and the nature of its business with regard

to purchase of fixed assets. The nature of the

Company’s activities is such that it did not require

purchase of inventory or sale of good and services.

During the course of our audit, we have not observed

any major weakness in such internal control system.





Companies Act, 1956. Hence the provision of clause

(v) of the Order is not applicable to the company.



from the public during the year. Hence the provision


company.




(ix) According to the information and explanations given


(a) The Company has been regular in depositing

undisputed dues, including Provident Fund,

Income-tax, Service Tax, Custom Duty, Cess

and other material statutory dues applicable to it

with the appropriate authorities, except in case of

Professional tax and Works Contract Tax where

certain instances of delays have been observed.

As informed to us, the provisions for Investment

Education and Protection Fund, Employee’s State

Insurance, Sales Tax, Wealth Tax and Excise duty

were not applicable to the Company during the

year.


respect of above statutory dues in arrears as at

31st March, 2012 for a period of more than six



account of any dispute in respect of Income-tax,

Service Tax, Custom Duty and Cess as on 31st

March, 2012.

(x) The Company has been registered for a period less



(xi) In our opinion and according to the information and

explanations given to us, the Company has not

defaulted in the repayment of dues to banks and

financial institutions. The Company has not borrowed

any money by way of debentures.


explanations given to us, the term loans have been

applied for the purposes for which they were obtained,

other than temporary deployment pending application.

(xiii) On the basis of an overall examination of the balance

sheet as at 31st March, 2012 and the cash flow

statement of the Company for the year then ended

and according to the information and explanation

given to us, we report that funds raised on short-term

basis amounting to Rs.2,249.43 lakhs have, prima

facie, been used for long term purpose.








Khurshed Pastakia

Partner


Mumbai

May 26, 2012



Balance Sheet as at March 31, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011

(I) EQUITY AND LIABILITIES


(a) Share capital 3 11,605.00 6,605.00


11,578.12 6,597.62



(b) Other long-term liabilities 6 73.62 5,814.30

(c) Long-term provisions 7 16.42 1.97

31,063.23 15,261.45


(a) Short-term borrowings 8 – 20.00


(c) Short-term provisions 7 0.90 8.96

6,600.54 3,485.82

Total 49,241.89 25,344.89

(II) ASSETS


(a) Fixed assets

(i) Tangible assets 10 150.56 11.99

(ii) Capital work-in-progress 11 43,968.87 15,436.44

(b) Loans and advances 12 2,367.38 6,319.47

(c) Other non-current assets 13 44.07 31.24

46,530.88 21,799.14

2 Current assets

(a) Cash and bank balances 14 584.42 3,329.26

(b) Loans and advances 12 1,924.01 197.30

(c) Other current assets 13 202.58 19.19

2,711.01 3,545.75

Total 49,241.89 25,344.89

See accompanying notes forming part of financial statements




Khurshed Pastakia Capt. Rajesh Beri Shailesh Sawa


Mumbai Mumbai

May 26, 2012 May 26, 2012

215



(Rs. in lakhs)


No. March 31, 2012 March 31, 2011



III. Total Revenue (I + II) – –

IV. EXPENSES:

Establishment and other expenses 15 19.50 5.95

V. Total Expenses 19.50 5.95

VI. Loss for the Year (III-V) (19.50) (5.95)

VII. Earnings per share: 18

(1) Basic and diluted (40.34) (12.31)








Mumbai Mumbai

May 26, 2012 May 26, 2012



(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

CASH FLOW FROM OPERATING ACTIVITIES

Net loss as per statement of profit and loss (19.50) (5.95)

Adjustments for:

Share issue expenses 9.18 3.63

Cash generated from / (used in) operating activities (10.32) (2.32)

Income taxes refund / (paid) net (23.46) (2.76)

Net cash used in operating activities (33.78) (5.08)

CASH FLOW FROM INVESTING ACTIVITIES

Capital work in progress and capital advances (22,216.64) (18,878.87)

Purchase of fixed assets (139.59) (11.99)



Investment in bank deposit (250.00) (2,280.00)

Realisation of bank deposit 2,280.00 –

Interest received 14.75 1.29

Increase in loans and advances and other current assets (985.43) (834.11)

Increase / (decrease) in current liabilities and provision 4,017.93 1,113.53

Net cash flow from / (used in) investing activities (17,243.44) (20,864.26)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital 2,500.00 6,600.00

Proceeds from share application money 1,000.00 4,787.80

Share application money refunded (1,000.00) (2,287.80)



Interest and finance expenses (3,086.07) (1,743.17)

Proceeds from secured loan 22,936.63 9,443.40

Proceeds from unsecured loan – 228.97

Repayment of unsecured loan (20.00) (691.63)

Share issue expenses (27.50) (43.60)

Net cash flow from / (used in) financing activities 16,562.38 21,913.29


217




Net increase / (decrease) in cash and cash equivalents (714.84) 1,043.95

Cash and cash equivalents at the beginning of the year 1,049.26 5.31

Cash and cash equivalents at the end of the year

(refer reconciliation below) 334.42 1,049.26

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Note:

1 Reconciliation between closing cash and cash equivalents and cash

and bank balance as per cash flow statement.

Cash and cash equivalents as per cash flow statement 334.42 1,049.26

Less: Deposits with original maturity of more than 3 months but less

than 12 months not considered as cash equivalents as per AS-3 250.00 2,280.00

Cash and bank balances as per note 14 584.42 3,329.26

2 During the year, the Company has issued 25,000,000 0.01% compulsorily convertible cumulative participating

preference shares of Rs.10/- each for Rs.2500 lakhs against Share application money received.

3 Cash flow statement has been prepared under the indirect method as set out in Accounting Standard – 3 “Cash

Flow Statement” as notified under the Companies (Accounting Standards) Rules, 2006.



(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011






Mumbai Mumbai

May 26, 2012 May 26, 2012




Essar Bulk Terminal Paradip Limited (the Company) is a

public company domiciled in India and incorporated

under provision of Companies Act, 1956 with the

purpose of providing port and terminal handling services

and is running through pre-operation phase wherein it is

constructing jetty at Paradip.







Accounting Standards (AS) referred to in Sub-section (3C)










2.3 Tangible Fixed Assets, Depreciation/Amortisation

Fixed assets are recorded at cost less accumulated






or loss earned/incurred during the trial run and other



made during the year is provided on a pro-rata basis from/

up to the date of such additions / deductions, as the case

may be.

2.4 Capital Work-in-progress and expenditure during

constructions









Advance on capital account include progress based

payments made under the contracts for assets under

construction and other capital advances until the same are

allocated to fixed assets and other accounts as applicable.

2.5 Borrowing Cost



are amortised over the tenure of the loan and capitalized


asset is not capitalised and is charged to the statement



the intended use.



are amortized and charged to the statement of profit and











2.7 Taxation

The provision for current taxation is computed in

accordance with the relevant tax regulations. Deferred tax

is recognised on timing differences between the accounting

and the taxable income for the period and quantified using

the tax rates and laws enacted or substantively enacted

as on the balance sheet date. Deferred tax assets are

recognised and carried forward to the extent that there is

a reasonable certainty that sufficient future taxable income

will be available against which such deferred tax assets

can be realised in future. Deferred tax assets relating to

unabsorbed business losses on unabsorbed depreciation

are recognised when there is a virtual certainty supported

by the convincing evidence that there will sufficient taxable

profit to utilise them.


Assets







of which will be confirmed by the occurrence or non-


wholly within the control of the Company, or a present


estimate of the liability cannot be made, or likelihood of an

outflow of resources is remote.

Contingent assets are not recognised in the financial

statements.

219




2.9 IMPAIRMENT OF ASSETS














depreciation / amortization) had no impairment loss been


2.10 EMPLOYEE BENEFITS



employees’ salary- currently 12%, to the












b) Provision for gratuity for staff is made on

actuarial valuation. Contribution in respect

of gratuity for staff is made to Life Insurance

Corporation of India based on demands

made. The Company also accounts for

gratuity liability based on an independent

actuarial valuation carried out at every

statutory year end.

c) Contribution towards superannuation, funded




contribution plan, and is charged to the

statement of profit and loss.

d) Provision for all compensated absences

of eligible employees is based on an




3 SHARE CAPITAL



Authorised

Equity shares of Rs.10/- each 50,000 5.00 50,000 5.00

Preference shares of Rs.10/- each 129,950,000 12,995.00 74,950,000 7,495.00

13,000.00 7,500.00


Equity shares of Rs.10/- each 50,000 5.00 50,000 5.00

0.01% compulsorily convertible cumulative

participating preference shares (the “CCCPPS”)

of Rs.10/- each 116,000,000 11,600.00 66,000,000 6,600.00

11,605.00 6,605.00




i) Equity shares of Rs.10/- each

At the beginning of the year 50,000 5.00 50,000 5.00


Outstanding at the end of the year 50,000 5.00 50,000 5.00

ii) 0.01% CCCPPS of Rs.10/- each

At the beginning of the year 66,000,000 6,600.00 – –

Add: Issue of shares 50,000,000 5,000.00 66,000,000 6,600.00

Less: extinguishment under the scheme

of arrangement




for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the



shareholding.

(d) Terms / rights attached to CCCPPS

(i) Fixed dividend on preference shares : The CCCPPS have fixed dividend of 0.01% p.a. from the date of

allotment on cumulative basis.

(ii) Participating dividend: CCCPPS holder have the same rights to dividend as that of the equity share holder


(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs.10/- each at par at the end of

twenty years from the March 28, 2012. The CCCPPS holder shall have the option to convert the CCCPPS

into equity shares any time after the expiry of one year from the date of allotment of the CCCPPS.


221




(e) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the



Number Rs. in lakhs % Number Rs. in lakhs %

i) Equity shares of Rs.10/- each


known as Essar Shipping Ports

& Logistics Limited) – – – 24,440 2.44 48.88%

Essar Steel India Limited (formerly

known as Essar Steel Limited) 2,000 0.20 4.00% 14,280 1.43 28.56%

Essar Bulk Terminal Limited 47,500 4.75 95.00% 6,630 0.66 13.26%

Essar Logistics Limited 500 0.05 1.00% 4,650 0.47 9.30%

ii) CCCPPS of Rs.10/- each 50,000 5.00 100.00% 50,000 5.00 100.00%


known as Essar Shipping Ports

& Logistics Limited) 115,500,000 11,550.00 99.57% 66,000,000 6,600.00 100.00%

Essar Bulk Terminal Limited 500,000 50.00 0.43% – – –

116,000,000 11,600.00 100.00% 66,000,000 6,600.00 100.00%

4 RESERVE AND SURPLUS(Rs. in lakhs)


March 31, 2012 March 31, 2011

a. Deficit in the statement of profit and loss


Add: Net loss for the current year (19.50) (5.95)

Closing balance (26.88) (7.38)

Total reserves and surplus (26.88) (7.38)

5 LONG TERM BORROWINGS(Rs. in lakhs)

Particulars Non current portion Current Maturity



2012 2011 2012 2011

Secured

(a) Rupee term loan from banks 23,394.84 7,856.69 1,341.90 –

(b) Rupee term loan from financial institutions 5,758.38 – 298.20 –

(c) Foreign currency buyers credit 1,819.97 1,588.49 – –

Total secured loan 30,973.19 9,445.18 1,640.10 –

Total 30,973.19 9,445.18 1,640.10 –


‘other current liabilities’ (refer note 9) – – (1,640.10) –




Notes:

(i) Loans are secured by first charge on Company’s movable and immovable properties and backed by jointly

and several corporate guarantee of Rs.41,000 lakhs from the holding company Essar Ports Limited (formerly

known as Essar Shipping Ports & Logistics Limited) and Essar Shipping Limited.

(ii) Secured rupee term loans from banks and financial institutions are part of consortium loan agreement and

carry interest rate of 13% to 14.5% (base rate + spread 2% to 4%) p.a with repayment starting from June

2012 to March 2021.

(iii) Foreign currency buyers credit loan carrying interest rate of LIBOR plus 285 bps. Buyers credit facilities are

part of the consortium loan agreement and get converted into rupee term loan. Repayment schedule is as per

note (ii) above

6 OTHER LONG-TERM LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Acceptances in respect of capital goods (refer note (a) below) 73.62 5,814.30

Total 73.62 5,814.30

Note:

(a) Acceptance facilities are part of consortium loan agreement for rupee term loan from banks and financial

institutions disclosed under note 5 above. The acceptances get converted into rupee term loan.

7 PROVISIONS

(Rs. in lakhs)

Particulars Long term provisions Short term provisions



2012 2011 2012 2011


Gratuity (refer note 21) 8.82 0.97 0.35 0.00 *

Compensated absences (refer note 21) 7.60 1.00 0.55 0.09

(b) Others

Provisions for taxation (net of advance tax) – – – 8.87

Total 16.42 1.97 0.90 8.96

* figure is less than Rs.1000/-


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Unsecured

12.5% loans repayable on demand-from related parties (refer note 22) – 20.00

Total – 20.00

223





(Rs. in lakhs)


March 31, 2012 March 31, 2011

Capital creditors (refer note 23) 4,591.14 606.40

Current maturities of long-term borrowings (refer note (i) below) 1,640.10 –

Application money received for allotment of securities – 2,500.00

(Share application money received in excess of authorised

share capital is classified as part other current liabilities.)

Other liabilities

(i) Creditors for expenditure (refer note 23) 329.35 237.03

(ii) Statutory dues (withholding taxes) 39.05 113.43

Total 6,599.64 3,456.86

Note:

(i) Refer note (i) & (ii) in note-5 long term borrowings for details of security and guarantee.



10.

FIX

ED

AS

SE

TS

(Rs.

in lakhs)

G

RO

SS

BLO

CK

A

CC

UM

ULA

TE

D D

EP

RE

CIA

TIO

N

NE

T B

LO

CK

A

s a

t A

dd

itio

ns

As a

t A

s a

t

As a

t A

s a

t A

s a

t

A

pril 1,

d

uring

Marc

h 3

1,

Ap

ril 1,

For

the

Marc

h 3

1,

M

arc

h 3

1,

Marc

h 3

1,

2011

the y

ear

2012

2011

year

20

12

2

01

2

20

11

Tan

gib

le a

ssets

Fre

ehold

land

11.9

9

115.1

0

127.0

9

–

–

–

12

7.0

9

11

.99

Furn

iture

and

fixtu

res

–

24.4

9

24.4

9

–

1.0

2

1.0

2

23

.47

–

Tota

l 11.9

9

139.5

9

151.5

8

–

1.0

2

1.0

2

15

0.5

6

11

.99

Pre

vious y

ear

–

11.9

9

11.9

9

–

–

–

11

.99

–

225





(Rs. in lakhs)


March 31, 2012 March 31, 2011

(a) Capital work in progress 33,818.57 12,537.84

Sub - total (a) 33,818.57 12,537.84

(b) Expenditure during construction

Opening balance 2,898.61 7.46

Add: Additions during the year

Interest and finance cost 3,086.07 506.98

Foreign exchange loss / (gain) on borrowings 231.48 (22.88)

Insurance expenses 15.28 29.42

Consulting expenses 508.04 151.56

General expenses 219.49 1,286.83

Salary and wages 197.96 13.74

Rental expenses 3,025.99 951.51

Less: Income from sale of mutual fund and

interest of fixed deposit (net of tax) (32.64) (26.01)

Sub - total (b) 10,150.30 2,898.61

Total (a + b) 43,968.87 15,436.44


(Rs. in lakhs)

Particulars Long term loans and advances Short term loans and advances



2012 2011 2012 2011


Capital advances to related party (refer note 22) 1,349.54 4,379.39 – –

Security deposits 30.76 20.58 2.30 –

Advance income-tax and tax deducted at source

(net of provision for taxation) – – 0.01 –

Capital advance to related party

Prepaid expenses 987.08 1,110.47 123.67 192.80

Balance with excise authorities – 809.03 1,770.32 –

Staff advance – – 0.66 –

Excess tax paid under 194-C – – 27.05 –

Other receivable – – – 4.50

Total 2,367.38 6,319.47 1,924.01 197.30



13 OTHER ASSETS

(Rs. in lakhs)

Particulars Other non-current assets Other current assets



2012 2011 2012 2011

Others (unsecured and considered good)

Share issued expenses 44.07 31.24 14.22 8.73

Interest accrued on fixed deposits – – 7.42 10.46

Other receivables from related parties

(refer note 22) – – 180.94 –

Total other non current assets 44.07 31.24 202.58 19.19

14 CASH AND BANK BALANCE

(Rs. in lakhs)

Current balances


March 31, 2012 March 31, 2011


Balances with banks 334.42 1,049.26

– On current accounts 334.42 1,049.26


Deposits with original maturity of more than

3 months but less than 12 months 250.00 2,280.00

Total 584.42 3,329.26

15 ESTABLISHMENT AND OTHER EXPENSES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Auditors’ remuneration (refer note below) 10.30 1.43

Other expenses 9.20 4.52

Total 19.50 5.95

(Rs. in lakhs)

Auditor’s remunerations includes For the year ended For the year ended

March 31, 2012 March 31, 2011

As auditor 1.00 1.00


Out of pocket expenses 0.30 –

Total 10.30 1.43

227





(Rs. in lakhs)


March 31, 2012 March 31, 2011

Dividend on 0.01% compulsorily convertible cumulative

participating preference shares 0.84 0.18

17 CAPITAL COMMITMENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Estimated amount of contract remaining to be executed on capital

account and not provided for 5,642.59 23,870.49

18 EARNINGS PER SHARE:

The calculation of the basic and diluted earnings per share is based on the following data:


March 31, 2012 March 31, 2011

Earnings/(loss) for the year for the purpose of earning per share (Rs. in lakhs) (19.50) (5.95)

Unpaid dividend on compulsorily convertible cumulative

participating preference shares (Rs. in lakhs) 0.67 0.21

Loss attributable to equity shareholders (Rs. in lakhs) (20.17) (6.16)

No. of equity shares at the beginning of the year 50,000 50,000


No. of equity shares at the end of the year 50,000 50,000

Weighted average number of equity shares outstanding during the year 50,000 50,000

Earnings per share - basic (Rs.) (40.34) (12.31)

Face value per share (Rs.) 10 10

Note : 0.01% CCCPPS have not been considered for purpose of calculation of the weighted average number of

equity shares for dilution purposes as they are anti-dilutive.


(a) There were no forward / options contracts entered in to by the Company during the financials year to hedge

its foreign currency exposures.

(b) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise

are given below.

As at Amount in As at Amount in Particulars March 31, foreign March 31, foreign 2012 currency 2011 currency

Rs. in lakhs Currency As at Rs. in lakhs Currency As at March 31, March 31, 2012 2012

Secured loan – buyer’s Credit 1,819.97 USD 3,557,647 1,588.49 USD 3,557,647

Interest on buyer’s credit 20.67 USD 40,400 5.68 USD 12,718



20 CIF VALUE OF IMPORT (INCLUDING GOODS IN TRANSIT)

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Capital goods – 2,273.12

Total – 2,273.12



I. Defined contribution plans:

During the year, the Company has recognised the following amounts in the statement of profit and loss

expenditure during construction :

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(a) Employer’s contribution to provident fund 7.21 0.83

7.21 0.83


(a) Gratuity

(b) Compensated absences (CA)

In accordance with AS-15, relevant disclosures are as under:

(A) Changes in present value of defined benefit obligation:

(Rs. in lakhs)

Particulars Gratuity (non-funded) CA-paid leave (non- funded)



2012 2011 2012 2011


as at the beginning of the year 0.97 – 1.09 –


Interest cost 0.08 – 0.09 –

Actuarial (gain) / loss on obligations 6.82 – 5.98 –

Plan amendment – – – –


as at the end of the year 9.18 0.97 8.14 1.09

229




(B) Amount recognised in balance sheet:

(Rs. in lakhs)

Particulars Gratuity-off shore officers CA- paid leave

(non-funded) (non- funded)



2012 2011 2012 2011


as at the end of the year 9.17 0.97 8.14 1.09

Fair value of plan assets as at end of the period – – – –

Funded status (surplus / (deficit)) (9.17) (0.97) (8.14) (1.09)

Of which :-

Current 0.35 0.00 * 0.55 0.09

Non Current 8.82 0.97 7.59 1.00

* amount is less than Rs.1000/-

(C) Expenses recognised in the statement of profit and loss / expenditure during construction period:

(Rs. in lakhs)





2012 2011 2012 2011


Interest cost 0.08 – 0.09 –

Net actuarial (gain) / loss recognised in the period 6.82 – 5.98 –

Total expenses recognised in the statement

of profit and loss / edc 8.21 0.97 7.05 1.09

(D) Experience history:

(Rs. in lakhs)





2012 2011 2012 2011

Defined benefit obligation at the end of the year (9.17) (0.97) (8.14) (1.09)

Funded status (9.17) (0.97) (8.14) (1.09)

Experience gain / (loss) adjustments

on plan liabilities (7.16) – (6.29) –

Actuarial gain / (loss) due to change

on assumptions 0.34 – 0.31 –

As this is the second year of implementation of Accounting Standard (AS)-15 (Revised 2005) only corresponding

previous year figure have been furnished.



(E) Actuarial assumptions

Actuarial valuations were done in respect of the aforesaid defined benefit plans based on the following

assumptions:

(i) General assumptions:

(Rs. in lakhs)

Particulars Gratuity-off shore officers CA-paid leave

(non-funded) (non-funded)



2012 2011 2012 2011

Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%

Rate of return on plan assets (for funded scheme) N.A N.A N.A N.A

Expected retirement age of employees (years) 58 58 58 58

Separation rate of employees 5.00% 5.00% 5.00% 5.00%

Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%

(ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) Mortality table.

(iii) Leave policy:

(a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be

(b) Leave balance as at the valuation date and each subsequent year following the valuation date to the

extent not availed by the employee is available for encashment on separation from the Company up to a

maximum of 120 days.

22 RELATED PARTY TRANSACTIONS

(a) Holding companies

(i) Essar Global Limited, Cayman Island, ultimate holding company

(ii) Essar Shipping & Logistics Limited, Cyprus. (intermediate holding company)

(iii) Essar Ports Limited, (formerly known as Essar Shipping Ports & Logistics Ltd.) (intermediate holding

company from March 31, 2012)

(iv) Essar Bulk Terminal Limited (immediate holding company with effect from March 31, 2012)

(b) Key management personnel

Capt. Rajesh Beri – Whole time Director (with effect from October 17, 2011)

(c) Fellow subsidiaries and other related parties where there have been transactions

(i) Vadinar Oil Terminal Limited

(ii) Aarkay Holdings Limited

(iii) Essar Bulk Terminal (Salaya) Limited

(iv) Essar Steel India Limited (formerly known as Essar Steel Limited)

(v) Aegis Limited

(vi) Essar Paradip Terminals Limited

(vii) Vadinar Ports & Terminals Limited

(viii) Essar House Limited

(ix) Essar Projects (India) Limited

(x) Futura Travels Limited

(xi) Essar Investments Limited

(xii) Essar Infrastructure Services Limited

(xiii) India Securities Limited

(xiv) Essar Logistics Limited

(xv) Essar Services India Limited

231




The details of transactions with related parties during the year are as under:(Rs. in lakhs)

Nature of transactions Holding Fellow subsidiaries and Key management

companies other related parties personnel Total

31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011

Expenditure during construction period

Management fees

Essar Ports Limited (formerly known as

Essar Shipping Ports & Logistics Ltd.) 102.00 – – – – – 102.00 –





Total 102.00 37.06 240.01 403.12 – – 342.01 440.18

Business support expenses



Aegis Limited – – 42.34 – – – 42.34 –


Total 4.00 – 170.90 – – – 174.90 –

Remuneration

Capt. Rajesh Beri * – – – – 39.81 – 39.81 –

Interest expenses

Vadinar Ports & Terminals Limited – – 1.19 1.53 – – 1.19 1.53


Essar Shipping Ports & Logistics Ltd.) – 79.60 – – – – – 79.60

Total – 79.60 1.19 1.53 – – 1.19 81.13

Travelling expenses


CWIP


Unsecured loans taken


Essar Shipping Ports & Logistics Ltd.) – 3,497.30 – – – – – 3,497.30

Vadinar Port & Terminal Limited – – – 20.00 – – – 20.00

Essar Bulk Terminal Limited – – – – – – – –

Total – 3,497.30 – 20.00 – – – 3,517.30

Repayment of unsecured loan




Vadinar Ports & Terminals Limited – – 20.00 – – – 20.00 –

Total – 1,406.00 20.00 – – – 20.00 1,406.00



Loans & advances


Transfer of loan into share application money



Transfer of share application money into loan



Share application money given


Refund of share application money given


Advance received towards shares


Essar Shipping Ports & Logistics Ltd.) 3,500.00 9,747.30 – – – – 3,500.00 9,747.30



Essar Shipping Ports & Logistics Ltd.) 1,000.00 – – – – – 1,000.00 –

Essar Logistics Limited – – – 2,287.80 – – – 2,287.80







Essar Steel India Ltd. – – 4.67 – – – 4.67 –

Essar Bulk Terminal Limited 0.10 20.68 – – – – 0.10 20.68

Total 0.10 235.31 4.67 1,028.05 – – 4.76 1,263.36

Allotment of preference shares


Essar Shipping Ports & Logistics Ltd.) 4,950.00 6,600.00 – – – – 4,950.00 6,600.00


Total 5,000.00 6,600.00 – – – – 5,000.00 6,600.00

Guarantee received (jointly & severally) – –


Essar Shipping Ports & Logistics Ltd.) and

Essar Shipping Limited – 41,000.00 – – – – – 41,000.00

* figure does not include the amount payable gratuity and compensated absence by the company as the same is calculated for the company as whole

on actuarial basis.

(Rs. in lakhs)



31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011

233




Outstanding as at March 31, 2012(Rs. in lakhs)



31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011

Unsecured loan

Vadinar Ports & Terminals Limited – – – 21.53 – – – 21.53

Advance towards share application money




Capital creditors

Essar Projects (India) Limited – – 4,591.14 – – – 4,591.14 –

Other current liabilities – – – –


Essar Shipping Ports & Logistics Ltd.) 51.26 37.06 – – – – 51.26 37.06


Essar Bulk Terminal (Salaya) Limited – – 100.00 – – – 100.00 –




Aegis Limited – – 25.77 – – – 25.77 –




Total 55.23 57.74 188.87 100.12 – – 244.09 157.86

Interest accrued on loan



Advance to creditors


Other receivable


Loans & advances


Guarantee received (jointly & severally)


Essar Shipping Ports & Logistics Ltd.) and

Essar Shipping Limited 41,000.00 41,000.00 – – – – 41,000.00 41,000.00




Capt. Rajesh Beri Shailesh Sawa


Mumbai

May 26, 2012

23 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and


year, together with interest paid / payable as required under the said Act has not been furnished and provision for


24 Business segment & geographic data

The Company has one business segment of jetty operation, which is in project stage and only one geographical

segment i.e. India.


classification as per the requirement of the revised Schedule VI notified under the Companies Act, 1956.

235


ESSAR PARADIP TERMINALS LIMITED

BOARD OF DIRECTORS

Rajiv Agarwal

Director

K. K. Sinha

Director

Shailesh Sawa

Director

U. Venkat Rao

Executive Director

Capt. Rajesh Beri

Director


REGISTERED & CORPORATE OFFICE

Essar House


Mahalaxmi

Mumbai 400 034

AUDIT COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

AUDITORS



Directors’ Report

Your Directors have pleasure in presenting the Third Annual Report together with the Audited Accounts of the Company


FINANCIAL RESULTS


(Rs. in lakhs)


March 31, 2012 March 31, 2011


Gross Profit/(Loss) (3.28) (3.57)

Add: Balance in the Profit and Loss Account as per last Balance Sheet (5.30) (1.73)

Balance carried forward to Balance Sheet (8.58) (5.30)

PROJECT REVIEW

Your Company has been awarded a tender for the development of a deep draft coal berth at Paradip in the State of

Odisha by the Paradip Port Trust (PPT) on a built, operate and transfer basis for a period of 30 years.

The terminal will have a 370 mtrs. berth, storage yard of 1,47,000 sq. mtrs area and mechanised rail loading systems.

The berths will be equipped with ultra modern ship-unloaders that are capable of handling Cape Size vessels of 1,25,000

DWT initially with a draft of 17.1 mtrs. and will be upgraded to accommodate 1,85,000 DWT vessels with draft of 19.0

mtrs. The cargo will be moved to stockyard with high-capacity conveyors and stacked with modern stackers. The cargo

will be reclaimed with bucket wheel re-claimers for loading wagons with rapid wagon loading systems. The facility is being

built to enable handling of upto 18 million tons of cargo per annum.

PPT is building a bulb-shaped railway network for connecting to your Company’s terminal. The rail network construction

work has already started after several land surveys.

Dredging near berth and channel area will also be done by PPT. PPT is planning to tender the work soon.

The project is expected to be completed in 2 years time.

DIVIDEND

Since your Company is yet to commence operations, your Directors have not recommended any dividend on the equity

shares and the 0.01% Compulsorily Convertible Cumulative Participating Preference Shares for the year under review.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits during the year under review.

DIRECTORS


Shri. K. K. Sinha retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-

appointment.

During the year under review Capt. Rajesh Beri has been appointed as an Additional Director. Shri. U. Venkat Rao has also

been appointed as an Additional Director in the wholetime employment of the Company designated as Executive Director.

The Company has received notices from members proposing the appointment of Capt. Rajesh Beri and Shri. U. Venkat

Rao as Directors of the Company.

AUDITORS


No.117365W retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. It


Company from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.

Directors’ Report

237



HOLDING COMPANY




AND OUTGO






As regards foreign exchange earnings and outgo, your

Company did not earn nor did it spend any foreign

exchange during the year.









that:














and



ACKNOWLEDGEMENTS




Your Directors thank the Paradip Port Trust, its Bankers

and other business associates for their continued support

and co-operation during the year.


U. Venkat Rao Shailesh Sawa


May 26, 2012


Auditors’ Report

TO THE MEMBERS OF


1. We have audited the attached Balance Sheet

of ESSAR PARADIP TERMINALS LIMITED (“the



















We believe that our audit provides a reasonable basis

for our opinion.


Order, 2003 (CARO) issued by the Central Government

in terms of Section 227(4A) of the Companies Act,

1956, we give in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said

Order.






audit;



so far as it appears from our examination of those

books;




account;













(i) in the case of the Balance Sheet, of the


March, 2012;

(ii) in the case of the Statement of Profit and



(iii) in the case of the Cash Flow Statement, of


ended on that date.










Khurshed Pastakia

Partner

(Membership No.31544)

Mumbai

May 26, 2012

239






business/activities/result, clauses (vi), (vii), (viii), (xi),

(xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) and (xx) of

the order are not applicable.


The Company is in project stage, and hence the

requirement for maintenance of records showing

full particulars, including quantitative details and

situation of the fixed assets are not applicable to the

Company. Hence the provision of clause (i)(a) to (i)(c)

of the Order is not applicable to the Company.

(iii) The reporting requirements on inventory are not

applicable as the Company does not have any

inventory. Hence the provision of clause (ii) (a) to (ii)

(c) of the Order is not applicable to the company.





Act, 1956. Hence, the provision of clause (iii)(b) to (iii)

(g) of the Order is not applicable to the Company.

(v) In our opinion and according to the information

and explanations given to us, there are adequate

internal control systems commensurate with the

size of the Company and the nature of its business

with regard to purchases fixed assets. The nature

of the Company’s activities is such that it did not

require purchase of inventory or sale of good and

services. During the course of our audit, we have

not observed any major weakness in such internal

control system.


explanations given to us, there are no contracts

or arrangements that need to be entered into the

register maintained in pursuance of Section 301

of the Companies Act, 1956. Hence the provision

of clause (v) of the Order is not applicable to the

company.



(a) The Company has generally been regular in

depositing undisputed dues relating to Income-tax,

Cess and other material statutory dues applicable

to it with the appropriate authorities. As informed

to us, the provisions for Investment Education and

Protection Fund, Employee’s State Insurance, Sales

Tax, Wealth Tax Service Tax, Custom Duty and

Excise duty were not applicable to the Company

during the year.


respect of above statutory dues in arrears as at 31st

March, 2012 for a period of more than six months

from the date they became payable.


account of any dispute in respect of Income-tax and

Cess as on 31st March, 2012.

(viii) The Company has been registered for a period less



(ix) 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.




Khurshed Pastakia

Partner

(Membership No.31544)

Mumbai

May 26, 2012


Balance Sheet as at March 31, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011


Shareholders’ funds

(a) Share capital 3 905.00 5.00


896.42 (0.30)

2 Share application money pending allotment 5 95.00 –


(a) Short-term borrowings 6 50.00 –

(b) Other current liabilities 7 233.13 720.03

(c) Short-term provisions 8 0.47 –

283.60 720.03

Total 1,275.02 719.73

II. ASSETS


(a) Fixed assets

(i) Capital work-in-progress 9 274.83 183.00

(b) Long-term loans and advances 10 526.91 526.14

(c) Other non-current assets 11 6.18 –

807.92 709.14

2 Current assets

(a) Cash and bank balances 12 458.93 10.59

(b) Other current assets 11 8.17 –

467.10 10.59

Total 1,275.02 719.73





Khurshed Pastakia U. Venkat Rao Shailesh Sawa


Mumbai Mumbai

May 26, 2012 May 26, 2012

241



(Rs. in lakhs)


No. March 31, 2012 March 31, 2011



III. Total revenue (I + II) – –

IV. EXPENSES:

Other expenses 13 3.28 3.57

V. Total expenses 3.28 3.57

VI Loss for the year (III-V) (3.28) (3.57)

VII Earnings per share ( face value of Rs. 10/- Each): 16

Basic and diluted (6.55) (7.15)







Mumbai Mumbai

May 26, 2012 May 26, 2012




(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

I. CASH FLOW FROM OPERATING ACTIVITIES

Net loss as per Statement of Profit and Loss (3.28) (3.57)

Adjustment for:

Share issue expenses written off 0.13 –

Trade and other payables 1.00 2.22

Cash generated from / (used in) operating activities (2.15) (1.35)

Income taxes refund / (paid) net (7.17) –

Net cash used in operating activities (9.32) (1.35)

II. CASH FLOW FROM INVESTING ACTIVITIES

Capital work in progress and capital advances (98.21) (183.00)

Investment in bank fixed deposit (416.33) –

Interest income 18.15 –

Increase in loans and advances and other current assets (0.78) (18.76)

Increase in current liabilities and provision 32.11 191.43

Net cash used in investing activities (465.06) (10.33)

III. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital 375.00 –

Proceeds from short term loan 50.00 –

Share application money received 170.00 525.00

Refund of share application money (70.00) –

Interest & finance cost (loan arrangement fees & Interest) (10.72) (507.38)

Share issue expenses (7.89) –

Net cash flow from financing activities 506.39 17.62

Net increase in cash and cash equivalents 32.01 5.94

Cash and cash equivalents at the beginning of the year 10.59 4.65

Cash and cash equivalents at the end of the year

(refer reconciliation below) 42.60 10.59


243




(Rs. in lakhs)


March 31, 2012 March 31, 2011

NOTE:

1. Reconciliation between closing cash & bank balance and cash &

cash equivalents as per cash flow statement.

Cash and cash equivalents as per cash flow statement 42.60 10.59

Add: margin money deposits not considered as cash & cash

equivalents as per AS-3 416.33 –

Cash and bank balances as per note 12 458.93 10.59

2. Non-Cash Transaction

During the year, the Company has issued 525,000 - 0.01% compulsorily convertible cumulative participating

preference shares of Rs. 10/- each for Rs.525 lakhs against share application money received in previous year.

3. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 “Cash

Flow Statement” as notified under the Companies (Accounting Standards) Rules, 2006.

See accompanying notes forming part of financial statement







Mumbai Mumbai

May 26, 2012 May 26, 2012




Essar Paradip Terminals Limited (the Company) is a public

company domiciled in India and incorporated under

provisions of Companies Act, 1956 with the purpose

of providing port and terminal handling services and is

constructing jetty at Paradip.




historical cost convention, on accrual basis of accounting



Accounting Standards (AS) referred to in sub-section (3C)










2.3 Capital Work-In-Progress and Expenditure

during Constructions









Advance on capital account include progress based

payments made under the contracts for assets under

construction and other capital advances until the same are

allocated to fixed assets and other accounts as applicable.

2.4 Borrowing Costs


acquisition, construction/development of qualifying asset


as a part of cost of such asset till such time that the asset

is not capitalised; and is charged to the Statement of

Profit and Loss thereafter. A qualifying asset is one that


the intended use.



are amortised and charged to the Statement of Profit and


2.5 Taxation

The provision for current taxation is computed in accordance

with the relevant tax regulations. Deferred tax is recognised

on timing differences between the accounting and the taxable

income for the period and quantified using the tax rates and

laws enacted or substantively enacted as on the balance

sheet date. Deferred tax assets are recognised and carried

forward to the extent that there is a reasonable certainty

that sufficient future taxable income will be available against

which such deferred tax assets can be realised in future.

Deferred tax assets relating to unabsorbed business losses

on unabsorbed depreciation are recognised when there is a

virtual certainty supported by the convincing evidence that

there will sufficient taxable profit to utilise them.


Assets







of which will be confirmed by the occurrence or non-


wholly within the control of the Company, or a present


estimate of the liability cannot be made, or likelihood of an

outflow of resources is remote.

Contingent assets are not recognised in the financial

statements.












the recoverable amount is re-assessed and the asset is

reflected at the recoverable amount but limited to the




245




3 SHARE CAPITAL



Authorised

Equity shares of Rs. 10/- each 50,000 5.00 50,000 5.00

Preference shares of Rs. 10/- each 9,950,000 995.00 – –

1,000.00 5.00


Equity shares of Rs. 10/- each 50,000 5.00 50,000 5.00

0.01% Compulsorily convertible cumulative

participating preference shares (the “CCCPPS”)

of Rs. 10/- each 9,000,000 900.00 – –

905.00 5.00




i) Equity shares of Rs. 10/- each

At the beginning of the year 50,000 5.00 50,000 5.00


Outstanding at the end of the year 50,000 5.00 50,000 5.00

ii) 0.01%CCCPPS of Rs. 10/- each

At the beginning of the year – – – –


Add: Issue of shares 9,000,000 900 – –

Outstanding at the end of the year 9,000,000 900.00 – –






shareholding.

(d) Terms / rights attached to CCCPPS

(i) Fixed Dividend : The CCCPPS have fixed dividend of 0.01% p.a. from the date of allotment on cumulative

basis.

(ii) Participating Dividend : CCCPPS holders have the same rights to dividend as that of the equity share holders


(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs 10/- each at par at the end of

twenty years from 28th March 2012.The CCCPPS holders shall have the option to convert the CCCPPS into

equity shares any time after the expiry of one year from the date of allotment of the CCCPPS.




(e) Shares held by holding/ultimate holding company and/or their subsidiaries/associates and details of the



Number Rs. in % Number Rs. in %

lakhs lakhs

i) Equity shares of Rs. 10/- each


known as Essar Shipping Ports &

Logistics Limited) 45,000 4.50 90.00 37,500 3.75 75.00

Essar Shipping & Logistics Limited,

Cyprus 5,000 0.50 10.00 12,500 1.25 25.00

50,000 5.00 100.00 50,000 5.00 100.00

ii) 0.01% CCCPPS of Rs. 10/- each

Essar Ports Limited (formerly known

as Essar Shipping Ports &

Logistics Limited) 9,000,000 900.00 100.00 – – 0.00

9,000,000 900.00 100.00 – – 0.00

4 RESERVES AND SURPLUS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Surplus / (deficit) in the statement of profit and loss


Add: loss for the current year (3.28) (3.57)

Net deficit in the statement of profit and loss (8.58) (5.30)

5 SHARE APPLICATION MONEY

The Company has received Rs. 95 lakhs (P.Y. Rs. Nil) towards share application money. The Company proposes to

issue, 9,50,000 (P.Y. Rs. Nil) number of CCCPPS of par value of Rs.10/- before March 31, 2013.


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Unsecured

12.5% Loans repayable on demand-from related parties

(refer note 17) 50.00 –

Total 50.00 –

247





(Rs. in lakhs)


March 31, 2012 March 31, 2011

(a) Application money received for allotment of securities 5.00 525.00

(Share application money received in excess of the authorised

capital has been classified as other current liabilities)

(b) Capital creditors 221.71 195.03

(c) Other liabilities

(i) Statutory dues (withholding taxes) 0.58 –

(ii) Interest accrued but not due on borrowings 5.84 –

Total 233.13 720.03


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Others

Provisions for taxation (net of advance tax) 0.47 –

Total 0.47 –


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Expenditure during construction

Opening Balance 183.00 –

Add: Additions during the year

Interest and finance Cost 10.72 –

Professional and consultancy expenses 95.27 2.76

General expenses 2.94 180.24

Less: Income (Interest & profit on sale of mutual fund,

net of tax provision) (17.10) –

Total 274.83 183.00


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Other loans and advances (unsecured and considered good)

Prepaid expenses 507.38 507.38

Cenvat receivable 19.53 18.76

Total 526.91 526.14



11 OTHER ASSETS

(Rs. in lakhs)

Particulars Non current Current



2012 2011 2012 2011

Others (unsecured and considered good)

Interest accrued on fixed deposits – – 6.59 –

Share issue expenses 6.18 – 1.58 –

Total 6.18 – 8.17 –

12 CASH AND BANK BALANCES

(Rs. in lakhs)


March 31, 2012 March 31, 2011


Balances with banks

– On current accounts 42.60 10.59

[A] 42.60 10.59


Margin deposits with original maturity

of less than 12 months (lien against

bank guarantee) 416.33 –

[B] 416.33 –

Total cash and bank balances [A+B] 458.93 10.59

13 OTHER EXPENSES

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011



Total 3.28 3.57

Auditors remuneration includes

As auditor 1.00 1.00


For reimbursement of expenses 0.10 –

Total 3.10 1.16

249





(Rs. in lakhs)


March 31, 2012 March 31, 2011

Dividend on compulsorily convertible cumulative participating

preference shares* 0.00* –

* amount is less than Rs.1,000/-

15 CAPITAL COMMITMENTS AND OTHER COMMITMENTS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Estimated amount of contract remaining to be executed on

capital account and not provided for tangible fixed assets 43,500.00 –

16 EARNINGS PER SHARE:

The calculation of the basic and diluted earnings per share is based on the following data:


March 31, 2012 March 31, 2011

Earnings/(loss) for the year for the purpose of earning

per share (Rs. in lakhs) (net loss for the year) (3.28) (3.57)

Unpaid dividend on compulsorily convertible cumulative

participating preference shares (Rs. in lakhs) (0.00)* –

Loss attributable to equity shareholders (Rs. in lakhs) (3.28) (3.57)

No. of equity shares at the beginning of the year 50,000 50,000


No. of equity shares at the end of the year 50,000 50,000

Weighted average number of equity shares outstanding during the year 50,000 50,000

Earnings per share - basic and diluted (Rs.) (6.55) (7.15)

Face value per share (Rs.) 10 10

* amount is less than Rs.1,000/-

Note:- 0.01% CCCPPS and share application money have not been considered for purpose of calculation of the

weighted average number of equity shares for dilution purposes as they are anti-dilutive.

17 RELATED PARTY TRANSACTIONS:

a) Holding companies :

(i) Essar Global Limited, Cayman Islands (ultimate holding company)

(ii) Essar Shipping & Logistics Limited, Cyprus (intermediate holding company)

(iii) Essar Ports Limited, immediate holding company (formerly known as Essar Shipping Ports & Logistics Ltd.)

b) Fellow subsidiary and other related parties where there have been transactions:

(i) Vadinar Oil Terminal Limited

(ii) Aarkay Holdings Limited

(iii) Essar Bulk Terminal (Salaya) Limited

(iv) Essar Steel India Limited

(v) Aegis Limited

(vi) Essar Bulk Terminal Paradip Limited



The details of transactions with related parties

(Rs. in lakhs)

Nature of transactions Holding companies

Fellow subsidiary and Total

other related parties

March 31, March 31, March 31, March 31, March 31, March 31,

2012 2011 2012 2011 2012 2011

Share application money received


Essar Shipping Ports & Logistics Ltd.) 100.00 525.00 – – 100.00 525.00

Essar Bulk Terminal Paradip Limited – – 70.00 – 70.00 –


Essar Bulk Terminal Paradip Limited – – 70.00 – 70.00 –

Issue of preference share


Essar Shipping Ports & Logistics Ltd.) 900.00 – – – 900.00 –

Administration expenses*

Vadinar Oil Terminal Limited – – – 180.77 – 180.77

Reimbursement of expenses*

Essar Steel India Ltd. – – 8.78 – 8.78 –

Consultancy charges*

Aegis Limited – – 5.52 – 5.52 –

Interest expenses*

Essar Bulk Terminal (Salaya) Limited – – 5.84 – 5.84 –

Travelling expenses* –

Aarkay Holdings Limited – – – 0.37 – 0.37

Unsecured loans taken –



Share application money


Essar Shipping Ports & Logistics Ltd.) 100.00 525.00 – – 100.00 525.00

Unsecured loans


Other current liabilities


Aegis Limited – – 4.96 – 4.96 –

Aarkay Holdings limited – – – 0.58 – 0.58

Vadinar Oil Terminal Limited – – 180.77 180.77 180.77 180.77

Guarantee received


Essar Shipping Ports & Logistics Ltd.) 46,700.00 46,700.00 – – 46,700.00 46,700.00

* includes expenditure during construction period.

251





There were no forward / options contracts entered in to by the Company during the financials year to hedge its

foreign currency exposures.

19 BUSINESS SEGMENT AND GEOGRAPHICAL SEGMENT

The Company has one business segment of Jetty Operation, which is in feasibility-assessment stage and only one

geographical segment i.e. India.

20 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and


year, together with interest paid/payable as required under the said Act has not been furnished and provision for



classification as per the requirement of the Revised schedule VI notified under the Companies Act, 1956.


U. Venkat Rao Shailesh Sawa


Mumbai

May 26, 2012


BOARD OF DIRECTORS

Rajiv Agarwal

Director

K. K. Sinha

Director

Shailesh Sawa

Director

R. N. Bansal

Director

Capt. Deepak Sachdeva

Director

VADINAR PORTS & TERMINALS LIMITED

REGISTERED OFFICE

Essar Refinery Site

39 KM Stone


Khambalia

Dist. Jamnagar

Gujarat 361 305

AUDIT COMMITTEE

Rajiv Agarwal

K. K. Sinha

Shailesh Sawa

AUDITORS


CORPORATE OFFICE

Essar House



253



Directors’ Report Directors’ Report

Your Directors have pleasure in presenting the third Annual Report together with the Audited Accounts of the Company


FINANCIAL RESULTS


(Amount in lakhs)


March 31, 2012 March 31, 2011

Total Revenue 21,611.19 –

Total Expenses 5,691.55 4.10

Profit/(Loss) for the year before interest, depreciation and tax 15,919.64 (4.10)

Finance cost 6,428.69 –

Depreciation and amortisation expenses 3,836.36 –

Profit / (Loss) before tax 5,654.59 (4.10)

Tax expenses 1,834.63 –

Profit / (Loss) after tax 3,819.95 (4.10)


Your Company commenced operations with effect from April 1, 2011 and this is the first full year of operations of your

Company. Your Company has successfully handled 1.5 million metric tons (MMT) of product cargo and 3.3 MMT of

intermediate cargo during the year under review.

DIVIDEND

Ports & terminals sector is a highly capital intensive sector. With the view to conserve resources for future expansions,

your Directors have not recommended any dividend for the year under review.

FIXED DEPOSITS


DIRECTORS


Shri. K. K. Sinha retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for

re-appointment.

Capt. Deepak Sachdeva and Shri. Dipankar Pal have been appointed as Additional Directors of the Company. They

hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice from a member

proposing the candidature of Capt. Deepak Sachdeva and Shri. Dipankar Pal as Directors of the Company.

AUDITORS


No.117365W retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. It


Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting.

HOLDING COMPANY

Your Company continues to be a subsidiary of Vadinar Oil Terminal Limited and indirect subsidiary of Essar Ports Limited.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPOTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the

Report of Board of Directors), Rules 1988, relating to Energy Conservation and Technology Absorption are not applicable

to your Company.


The company has not earned any foreign exchange and

foreign exchange expenditure amounted to Rs. 0.65 lakhs










that:

(a) in the preparation of the annual accounts, the

applicable accounting standards have been followed

and there have been no material departures;











and



ACKNOWLEDGEMENTS




Your Directors also thank Gujarat Maritime Board, its




Shailesh Sawa Capt. Deepak Sachdeva

Mumbai Director Director

August 29, 2012

Directors’ Report

255



Auditors’ Report

TO THE MEMBERS OF

VADINAR PORTS & TERMINAL LIMITED


VADINAR PORTS & TERMINAL LIMITED (“the













misstatements. An audit includes examining, on

a test basis, evidence supporting the amounts

and the disclosures in the financial statements.

An audit also includes assessing the accounting

principles used and the 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.




Companies Act, 1956, we enclose in the Annexure a

statement on the matters specified in paragraphs 4





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;


Loss 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

Statement of Profit and Loss and the Cash

Flow Statement dealt with by this report are

in compliance with the Accounting Standards

referred to in Section 211(3C) of the Companies

Act, 1956;










March, 2012;


Loss, of the Profit of the Company for the




ended on that date.




Directors is disqualified as on 31st March, 2012

from being appointed as a director in terms of

Section 274(1)(g) of the Companies Act, 1956.




Khurshed Pastakia

Partner


Mumbai

May 26, 2012





business/activities/result, clauses (xii), (xiii), (xiv), (xv),

(xviii), (xix) and (xx) of CARO are not applicable.






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 explanation

given to us, no material discrepancies were

noticed on such verification.

(c) There was no disposal of fixed assets during

the year.


(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 explanation 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.





Act, 1956. Hence, the provision of clause (iii)(b) to (iii)

(g) of the Order is not applicable to the Company.

(v) 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 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.








from the public during the year. Hence, the provision


Company.


Company commensurate with the size of the


(ix) We have broadly reviewed the cost records


Companies (Cost Accounting Records) Rules,

2011 prescribed by the Central Government under

Section 209(1)(d) of the Companies Act, 1956 and

are of the opinion that prima facie the prescribed

cost records have been maintained. We have,

however, not made a detailed examination of the

cost records with a view to determine whether they

are accurate or complete.

(x) According to the information and explanations given


(a) The Company is generally regular in depositing

of undisputed dues, including Provident Fund,

Income-tax, Service Tax, Custom Duty, Cess,

and other material statutory dues applicable to

it with the appropriate authorities. As informed

to us, the provisions for Investment Education

and Protection Fund, Employee’s State

Insurance, Sales Tax, Wealth Tax and Excise

duty were not applicable to the Company

during the year.


respect of above statutory dues in arrears as at

31st March, 2012 for a period of more than six


(c) There were no dues pending to be deposited

on account of any dispute in respect of Income-

tax, Service Tax, Custom Duty and Cess as on

31st March, 2012.

(xi) The Company has been registered for a period less



(xii) In our opinion and according to the information


not defaulted in the repayment of dues to banks,

financial institutions.

(xiii) In our opinion and according to the information

257



and explanations given to us, the term loans have

been applied for the purposes for which they were

obtained, other than temporary deployment pending

application.

(xiv) In our opinion and according to the information and

explanation given to us, on the basis of review of

utilisation of funds, which is based on an overall

examination of the Balance Sheet of the Company

as at 31st March, 2012, we report that funds of Rs

16,598.75 raised on short-term basis have been

used during the year for long- term purpose.

(xv) To the best of our knowledge and according to the







Khurshed Pastakia

Partner


Mumbai

May 26, 2012


Notes forming part of financial statementsBalance Sheet as at March 31, 2012



Khurshed Pastakia Rajiv Agarwal Shailesh Sawa Partner Director Director

Mumbai Mumbai

May 26, 2012 May 26, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011



(a) Share capital 3 27,013.45 24,613.45

(b) Reserves and surplus 4 3,811.85 (8.10)

30,825.30 24,605.35

2 Share application money pending allotment 5 – 2,400.00



(b) Deferred tax liabilities (Net) 31 1,834.63 –

(c) Other long-term liabilities 7 681.11 7,152.48

(d) Long-term provisions 8 22.80 –

55,963.96 54,712.80


(a) Trade payables 9 7,171.04 660.91


(c) Short-term provisions 11 1.21 –

31,537.81 7,834.47

Total 118,327.07 89,552.62

II. ASSETS


(a) Fixed assets

(i) Tangible assets 12 92,084.44 –

(ii) Capital work-in-progress 13 13,058.53 76,215.09

(b) Long-term loans and advances 14 2,026.70 3,613.39

(c) Other non-current assets 15 2,718.33 –

109,888.00 79,828.48

2 Current assets

(a) Inventories 16 85.59 –

(b) Trade receivables 17 982.83 –

(c) Cash and bank balance 18 54.84 325.69

(d) Short-term loans and advances 19 7,063.81 9,297.44

(e) Other current assets 20 252.00 101.01

8,439.07 9,724.14

Total 118,327.07 89,552.62


259









Partner Director Director

Mumbai Mumbai

May 26, 2012 May 26, 2012

(Rs. in lakhs)


No. March 31, 2012 March 31, 2011

I. NET REVENUE FROM OPERATIONS 21 20,738.16 –

II. Other income 22 873.03 –

III. Total revenue (I + II) 21,611.19 –

IV. EXPENSES:

Operating expenses 23 4,808.80 –

Administrative, establishment and other expenses 24 684.83 4.10

Employee benefit expenses 25 197.92 –

Total 5,691.55 4.10

V. Profit / (loss) before interest, depreciation,

amortisation and tax (III - IV) 15,919.64 (4.10)

VI. Finance Cost 26 6,428.69 –

VII. Depreciation and amortisation expenses 12 3,836.36 –

VIII. Profit / (loss) before tax (V - VI - VII) 5,654.59 (4.10)

IX. Tax expense:

(1) Current tax - MAT 1,131.36 –

(2) MAT Credit (1,131.36)

(3) Deferred tax 31 1,834.63 –

X. Profit / (loss) for the year 3,819.95 (4.10)

XI. Earnings per equity share of

Rs. 10/- each fully paid up (in Rs.)

Basic EPS 30 1.55 (0.00)

Diluted EPS 30 1.42 (0.00)




(Rs. in lakhs)


March 31, 2012 March 31, 2011

(I) CASH FLOW FROM OPERATING ACTIVITIES

Profit (loss) before exceptional / extraordinary items for the year 5,654.59 (4.10)

Adjustment for:

Profit on sale of investments (7.38) –

Interest income - inter corporate deposits (585.99) –

Interest income - bank deposits (34.10) –

Interest and finance expenses 6,428.69 –

Depreciation 3,836.36 –

Cash flow from operation before changes in working capital 15,292.17 (4.10)

Adjustment for (increase) / decrease in operating assets :

Inventories Other long-term liabilities (85.59) –

Trade and other receivables (16.61) –

Adjustment for increase / (decrease) in operating liabilities :

Trade and other payables 23,485.29 –

Cash flow from operations 38,675.26 (4.10)

Income tax (paid) / refund (1,212.07) (257.53)

Net cash flow from / (used in) operating activities (I) 37,463.19 (261.63)

(II) CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure on fixed assets including capital advances (27,961.58) (16,450.17)

Interest income - inter corporate deposits 585.99 –

Interest income - bank deposits 34.10 –

Interest received - others – 25.21

Loans and advances given to other body corporates – (4,970.00)

Loans and advances repaid by body corporates 908.53 250.00

Investment in bank deposits (2,718.33) –

Increase / decrease in loans and advances and other current assets – (1,499.17)

Increase / decrease in current liabilities and provisions – (1,005.54)



Net cash flow from investing activities (II) (29,143.81) (22,934.56)

(III) CASH FLOW FROM FINANCING ACTIVITIES


Share application money received / (refunded) (950.00) 3,350.00



Proceeds from term loans 12,365.12 27,435.32

Repayments of term loans (4,875.00) –

Net cash flow from financing activities (III) (8,590.13) 23,469.65

261








Partner Director Director

Mumbai Mumbai

May 26, 2012 May 26, 2012


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Net cash flow for the year (I + II + III) (270.85) (273.46)

Opening cash and cash equivalents 325.69 52.23

Closing cash and cash equivalents 54.84 325.69

Note:

A. Non- cash transaction

During the current year, the Company has issued 2,40,00,000 equity shares of Rs. 10/- each for 2,400.00 lakhs

against share application money received in previous year.

B. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 - “Cash

Flow Statement” referred to in Section 211 (3C) of the Companies Act, 1956.

See accompanying notes forming part of the financial statements.



1 PARTICULARS

Vadinar Ports & Terminals Limited, a company

incorporated under the Companies Act, 1956 and

subsidiary of Vadinar Oil Terminal Limited started

commercial operations in April, 2011 to provide storage

and handling facilities to Essar Oil Limited required for

its refinery operations. The facilities include a marine

jetty, crude oil tanks, refined petroleum product and

intermediate tanks, a road gantry and interconnected

pipelines.



The financial statements are prepared under the historical

cost convention, on accrual basis of accounting, and

are in accordance with generally accepted accounting


Accounting Standards referred to in Sub-section (3C) of










2.3 Revenue Recognition

Revenue on sale of products is recognised when the seller

has transferred to the buyer the property in the goods

for a price or when all significant risks and rewards of

ownership have been transferred to the buyer and the

seller retains no effective control of the goods transferred

to a degree usually associated with ownership and no

significant uncertainty exists regarding the amount of

consideration that will be derived from the sale of goods.

Revenue on transactions of rendering services is

recognised either under the completed service contract

method or under the proportionate completion method, as

appropriate. Performance is regarded as achieved when

no significant uncertainty exists regarding the amount

of consideration that will be derived from rendering the

services.

2.4 Tangible Assets, Depreciation and Amortisation

Tangible assets are recorded at cost less accumulated








Depreciation on plant and machinery and buildings is

provided as per straight line method at the rates provided

under Schedule XIV to the Companies Act, 1956. These

assets need to be handed over to Kandla Port Trust under

the concession agreement entered into by the holding

company, Vadinar Oil Terminal Ltd. and are amortised

over a period of concession agreement of 30 years from

October 8, 1997 or their useful life of assets whichever is

lower. Assets costing less than Rs. 5,000/- per item are

depreciated at 100% in the year of acquisition.

Depreciation on additions / deductions to tangible assets

made during the year is provided on a pro-rata basis

from/up to the date of such additions / deductions, as the

case may be.

2.5 Intangible Assets and Amortisation

Intangible assets are recognised only when it is probable

that the future economic benefits that are attributable

to the asset will flow to the Company and the cost of

the asset can be measured reliably. Intangible assets

are stated at cost less accumulated amortisation and


Intangible assets are amortised over the best estimate of

their useful lives, subject to a rebuttable presumption that

such useful lives will not exceed ten years.

2.6 Capital Work in Progress and Expenditure During

Constructions


construction or development is shown under capital work-

in-progress.






loans and advances.

Expenditure incidental to the construction of projects

that take substantial period of time to get ready for their

intended use is accumulated as expenditure during

construction pending allocation to fixed assets and other

accounts, as applicable, on completion of the projects.

2.7 Borrowing Cost


acquisition, construction/ development of qualifying asset



asset is not capitalised; and is charged to the statement


necessarily takes substantial period of time to get ready

for the intended use.

263






are amortised and charged to the statement of profit and











2.9 Taxes on Income

Current tax are provided as per the provisions of the

Income Tax Act, 1961.

The tax effect of timing differences resulting between

taxable income and accounting income and are capable of







recognised, only if there is virtual certainty of its realisation,


account of other timing differences are recognised only to

the extent there is reasonable certainty of its realisation.


Assets









wholly within the control of the Company or a present


estimate of the liability cannot be made or likelihood of an

outflow of resources is remote. Contingent assets are not

recognised or disclosed in the financial statements.

















2.12 Inventories

Stores and Spares: valued at lower of cost and net

realisable value. Cost is determined on a moving weighted

average basis. Net realisable value is the estimated current

procurement price in the ordinary course of the business.

2.13 Other Income

Interest income is accounted on time proportionate basis.

Dividend income is accounted for when the right to receive

it is established.

2.14 Investments

Long-term investments (excluding investment properties),

are carried individually at cost less provision for diminution,

other than temporary, in the value of such investments.

Current investments are carried individually, at the lower of

cost and fair value. Cost of investments include acquisition

charges such as brokerage, fees and duties.


(a) Contribution to recognised provident fund,


employees’ salary is charged to the statement

of profit and loss.

(b) The liability for gratuity is actuarially

determined at year end and funded to Life

Insurance Corporation of India to the extent

demanded by them and balance taken to

provisions.

(c) The contribution towards superannuation,

funded by payment to Life Insurance

Corporation of India, is a fixed percentage

of the salary of eligible employees under a

defined contribution plan and is charged to


(d) Provision for all accumulated compensated





3 SHARE CAPITAL



(a) Authorised


280,000,000 28,000.00 280,000,000 28,000.00



Other long-term liabilities 270,134,457 27,013.45 246,134,457 24,613.45




Equity shares of Rs. 10/- each


Add: issue of shares 24,000,000 2,400.00 – –


(c) Terms / rights attached to shares





shareholding.

(d) Shares held by holding/ultimate holding company and/or their subsidiaries/associates and details of the



No. of shares Rs. in lakhs % No. of shares Rs. in lakhs %

Equity shares of Rs. 10/- each

Vadinar Oil Terminal Limited, the

holding company 191,480,000 19,148.00 70.9% 191,480,000 19,148.00 77.8%

Essar Ports Limited, the ultimate

holding company 78,654,457 7,865.45 29.1% 54,654,457 5,465.45 22.2%

270,134,457 27,013.45 100.0% 246,134,457 24,613.45 100.0%

(e) In the year 2009-10, the Company issued 19,14,80,000 equity shares of Rs. 10/- each, as fully paid up to Vadinar

Oil Terminal Limited, the immediate holding company, for a consideration other than cash.


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Surplus / (deficit) in statement of profit and loss


Add (less) : Profit (loss) for the year 3,819.95 (4.10)

Closing balance 3,811.85 (8.10)

265




5 SHARE APPLICATION MONEY

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Share application money pending allotment – 2,400.00

Total – 2,400.00

During the previous year, the Company received Rs. 3,350.00 lakhs towards share application money, out of

which the Company refunded Rs. 950.00 lakhs and issued 2,40,00,000 number of equity shares of Rs.10/- each,

amounting to Rs. 2,400.00 lakhs, during the current year.


(Rs. in lakhs)



March 31, 2012 March 31, 2012 March 31, 2012 March 31, 2012

Secured long term borrowings

Term loans

– Rupee term loans from banks 53,425.42 47,560.32 6,500.00 4,875.00

Total 53,425.42 47,560.32 6,500.00 4,875.00

Less : Amount disclosed under the head

“Other Current Liabilities” (refer note 10) – – 6,500.00 4,875.00

Total long term borrowings 53,425.42 47,560.32 – –

(a) Secured rupee term loan from banks carry interest rates ranging from 12% to 14% (base rate +/- spread) per

annum. Repayment of term loan is in 40 quarterly instalments from quarter ending September, 2011 to quarter

ending June, 2021.

(b) Term loans are secured by first mortgage and charge of all present and future movable and immovable

assets/properties of the Company. The loan is further secured by Corporate Guarantee of Essar Ports Limited

(formerly known as Essar Shipping Ports & Logistics Limited ) of Rs. 15,000 lakhs.

7 OTHER LONG TERM LIABILITIES

(Rs. in lakhs)




(i) Lease rent received in advance 434.16 – 1,213.09 1,111.11

(ii) Acceptances 246.95 7,152.48 – –

(Issued under letter of credit in favour of

the Company by lending banks and to be

converted into term loans)

Total 681.11 7,152.48 1,213.09 1,111.11

Less: Amount disclosed under the head “Other

Current Liabilities” (refer note 10) – – 1,213.09 1,111.11

Total Other Long Term Liabilities 681.11 7,152.48 – –




(Rs. in lakhs)




Provision for employee benefits

(i) Provision for compensated absences

(refer note 36(C) ) 17.04 – 1.21 –

(ii) Provision for gratuity (refer note 36(C)) 5.76 – – –

Total 22.80 – 1.21 –


“Short Term Provisions” (refer note-11) – – 1.21 –

Total long term provisions 22.80 – – –

9 TRADE PAYABLE

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Trade payable (refer note 32) 7,171.04 660.91

Total 7,171.04 660.91


(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Current maturities of long term borrowing (refer note 6 (a) & (b)

for details of interest rates, security and guarantees.) 6,500.00 4,875.00

(B) Lease rent received in advance (refer note 7) 1,213.09 1,111.11

(C) Share application money pending allotments and due for refund

or in excess of issued capital. – 950.00

(D) (i) Creditors for capital expense (refer note 32) 16,358.32 37.00

(ii) Other liabilities (statutory dues for tax deducted as source,

professional tax, book overdraft and others) 294.15 200.45

Total 24,365.56 7,173.56


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Provision for employee benefits (refer note 8)

– Provision for compensated absences 1.21 –

Total 1.21 –

267




12

FIX

ED

AS

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(Rs.

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A

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as a

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mb

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1,

2011).




(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Capital work-in-progress 12,877.60 67,338.70

(B) Expenditure during construction (see below) 180.93 8,876.39

Total 13,058.53 76,215.09

Expenditure During Construction As at Incurred Capitalised As at

March 31, During During March 31,

2011 the Year the Year 2012

Stores and consumables 60.04 100.67 160.71 –

Consultancy and professional fees 1,259.00 103.48 1,313.97 48.51

Hire charges - equipment 46.20 – 46.20 –

Customs duty and clearing expenses 612.19 – 612.19 –

Travelling and courier expenses 1.19 0.04 1.23 –

Insurance expenses 56.61 52.66 83.13 26.14

Stamp duty and registration charges 2,525.31 – 2,525.31 –

Lease rent expenses 358.31 54.18 412.49 –

Finance charges and bank Interest 6,099.35 1,818.97 7,894.53 23.78

Employee cost – 219.37 136.87 82.50

Manning management / commitment fees 8.52 – 8.52 –

11,026.72 2,349.37 13,195.15 180.93

Less: Income from lease rent 1,212.12 – 1,212.12 –

Less: Income from operations during trial run 759.48 – 759.48 –

Less : Interest and profit on sale of mutual fund

(net of tax) 178.73 – 178.73 –

Total expenditure during construction 8,876.39 2,349.37 11,044.82 180.93


(Rs. in lakhs)





(A) Capital advance 143.33 3,126.99 – –

(B) Security deposit 216.15 0.15 – –

(C) Other loans and advances

(i) Prepaid expense 287.61 318.72 287.33 412.39

(ii) Balance with excise authorities – – 2,397.22 3,782.54

(iii) Advance income tax (net of provision) 248.25 167.53

(iv) MAT credit available 1,131.36 – – –

Total 2,026.70 3,613.39 2,684.55 4,194.93


“short term loans and advances” (refer note 19) 2,684.55 4,194.93

Total long term loans and advances 2,026.70 3,613.39 – –

269




15 OTHER NON-CURRENT ASSETS

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Balance with banks

(i) Margin money

– In time deposits (debt service reserve account as per the term

loan agreement) with maturity of more than 12 months 1,354.00 –

– In time deposits (lien marked against facility of letter of credit)

with maturity of more than 12 months 1,364.33 –

Total non-current assets 2,718.33 –

16 INVENTORIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Stores and spares (lower of cost or net realisable value) 85.59 –

Total 85.59 –


(Rs. in lakhs)


March 31, 2012 March 31, 2011

Trade receivables - unsecured, considered good

(i) Outstanding for more than 6 months from its due date – –

(ii) Others 982.83 –

Total 982.83 –

18 CASH & BANK BALANCE

(Rs. in lakhs)


March 31, 2012 March 31, 2011

Cash and cash equivalents

Balance with bank in current accounts 54.84 325.69

Total cash and bank balance 54.84 325.69

19 SHORT TERM LOANS AND ADVANCES(Rs. in lakhs)


March 31, 2012 March 31, 2011


(A) Loans and advances to related parties (including accrued interest) (refer note 37) 4,039.88 5,098.41 (B) Advance to related parties for expense (refer note 37) 326.57 – (C) Other loans and advances (i) Advances to vendor 3.68 3.90 (ii) Balance with excise authorities (refer note 14) 2,397.22 3,782.54 (iii) Prepaid expense (refer note 14) 287.33 412.39 (iv) Advance to staff 9.13 0.20

Total 7,063.81 9,297.44




(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Income receivable – 101.01

(B) Other receivables 225.64 –

(C) Interest accrued on bank deposits 26.36 –

Total 252.00 101.01


(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Sale of services (refer note (i) below) 19,525.07 –

(B) Other operating revenue (refer note (ii) below) 1,213.09 –

Total 20,738.16 –

Notes:

(i) Sale of services comprises:

Crude and petroleum products storage revenue 18,773.64 –

Petroleum products handling revenue 751.43 –

Total 19,525.07 –

(ii) Other operating revenue

Berth hire charges 1,213.09 –

Total 1,213.09 –

Total (i) + (ii) 20,738.16 –

22 OTHER INCOME

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Interest income

(i) Interest on bank deposit 34.10 –

(ii) Interest on loans and advances 585.99 –

(B) Profit on sale of units of mutual fund 7.38 –

(C) Other income 245.56 –

Total 873.03 –

271





(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Hire charges 3,650.00 –

(B) Lease rent 212.53 –

(C) Operation and maintenance service expenses 497.59 –

(D) Consumption of stores and spares 16.60 –

(E) Manning - management expenses 330.14 –

(F) Repairs and maintenance 0.44 –

(G) Agency expenses 0.81 –

(H) Insurance expense 100.69 –

Total 4,808.80 –

24 ADMINISTRATIVE, ESTABLISHMENT AND OTHER EXPENSE

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Consultancy and professional charges 530.89 –

(B) Auditors’ remuneration – –

(i) As auditor 4.00 4.00

(ii) Other assurance services 5.00 –

(iii) Reimbursement of expenses 0.20 0.10

(C) Travelling expenses 3.76 –

(D) Communication expenses 0.18 –

(E) Office rent expenses 112.90 –

(F) Other expenses 27.90 –

Total 684.83 4.10

25 EMPLOYEE BENEFIT EXPENSES(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Salaries, wages and allowances 182.97 –

(B) Contribution to provident fund and other funds (refer note 36) 13.35 –

(C) Staff welfare expenses 1.60 –

Total 197.92 –

26 FINANCE COST(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

(A) Interest expenses 6,277.55 –

(B) Other borrowing cost 151.14 –

Total 6,428.69 –



27 COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Committed liability for future lease rental charges in respect

of land taken on lease

a. Payable not later than 1 year 141.10 115.15

b. Payable later than 1 year and not later than 5 years 623.03 460.59

c. Payable later than 5 years 4,541.15 4,849.63

5,305.27 5,425.37

(B) Claims against the company not acknowledged as debt 78.85 –

(C) Estimated amount of contracts remaining to be executed

on capital account and not provided for 10,221.86 4,922.63

Total 15,605.98 10,348.00


(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

Travelling expenses 0.65 –

Total 0.65 –


The Company has not entered into any forward/ option exchange contract to hedge its foreign currency exposure


given below:

Amount payable/ receivable on account of foreign currency :


March 31, 2012 March 31, 2011

Amount in Lakhs Amount in Lakhs

INR USD INR USD

(A) Capital advance – – 418.59 9.38

(B) Advance to vendors * 0.09 0.00 – –

Total 0.09 0.00 418.59 9.38

* Amount of advance to vendor is less than USD 1000

273





(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

BASIC EARNING PER SHARE:

Net profit / (loss) for the year (Rs. in lakhs) 3,819.95 (4.10)

Weighted average number of equity shares outstanding during the year 246,396,752 246,134,457

Basic earnings per share (in Rs.) 1.55 (0.00)

DILUTED EARNING PER SHARE:

(I) Net profit / (loss) for the year 3,819.95 (4.10)

(II) Weighted number of equity shares

Weighted average number of equity shares outstanding at the

beginning of the year 246,134,457 246,134,457

Weighted average number of equity shares equivalent to the

advance share application money received (considered to be

issued at par) 23,737,705 –

Total weighted number of equity shares 269,872,162 246,134,457

Diluted earnings per share (in Rs.) (I / II)** 1.42 (0.00)

** In previous year, share application money was not considered for calculating diluted earnings per share as they

were anti-dilutive.

31 DEFERRED TAX LIABILITIES

(Rs. in lakhs)


March 31, 2012 March 31, 2011

(A) Deferred tax liability

– Due to timing difference related to depreciation 2,644.90 –

2,644.90 –

(B) Deferred tax asset

– Due to unabsorbed depreciation 810.27 –

810.27 –

Net deferred tax liability (A - B) 1,834.63 –

32 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT :

The Company has not received any intimation from its supplier’s regarding their status under the Micro, Small and


year, together with interest paid/ payable as required under the said Act has not been furnished and provision for


33 CIF VALUE OF IMPORTS

(Rs. in lakhs)


ended ended

March 31, 2012 March 31, 2011

– Capital goods 3,684.42 –

– Components and spare parts 78.22 –

Total 3,762.64 –



34 CONSUMPTION OF IMPORTED AND INDIGENOUS COMPONENT AND SPARE PARTS


March 31, 2012 March 31, 2011

Rs. in lakhs % of total Rs. in lakhs % of total

Imported – 0% – –

Indigenous 16.60 100% – –

Total 16.60 100% – –

35 SEGNMENTAL REPORTING :

The Company operates in only one segment of ports and terminals business and only one geographical segment

i.e. India.

36 EMPOYEE BENEFITS :



a. Provident fund


During the year, the Company has recognised the following amounts in the statement of profit and loss:

(Rs. in lakhs)

Particulars As at

March 31, 2012

(i) Employer’s contribution to provident fund 7.40

(ii) Employer’s contribution to superannuation fund 0.63

Total 8.03


a. Contribution to gratuity fund

b. Provision for compensated absences (CA)



(Rs. in lakhs)

Particulars Gratuity CA

(funded) (non funded)

As at As at

March 31, 2012 March 31, 2012

(i) Present value of defined benefit obligation at the

beginning of the year – –

(ii) Current service cost 5.88 5.22

(iii) Interest cost 1.23 1.23

(iv) Plan amendments – –

(v) Acquisitions / (transfers) 17.73 15.41

(vi) Benefits paid ** (1.33) (1.33)

(vii) Actuarial (gain) / loss on obligations 2.79 (2.28)


at the end of the year 26.30 18.25

275




(B) Changes in the fair value of plan assets

(Rs. in lakhs)



As at As at

March 31, 2012 March 31, 2011

(i) Fair value of plan assets at the beginning of the year – –

(ii) Acquisition adjustment / transfer in / (transfer out) 21.88 –

(iii) Expected return on plan assets – –

(iv) Actuarial gains / (losses) – –

(v) Contributions by the employer – –

(vi) Benefits paid (1.33) –

Fair value of plan assets at the end of the year 20.55 –

(C) Amount recognized in the Balance Sheet

(Rs. in lakhs)



As at As at

March 31, 2012 March 31, 2012

(i) Present value of defined benefit obligation at the

end of the year 26.31 18.25

(ii) Fair value of plan assets at the end of the year 20.55 –

(Liability) / asset recognised in the balance sheet (5.76) (18.25)

(refer note 8 - long term provisions)

(D) Expenses recognised in the statement of profit and loss / expenditure during construction

(Rs. in lakhs)



For the year For the year

ended March ended March

31, 2012 31, 2011

(i) Current service cost 5.88 5.22

(ii) Interest cost 1.23 1.23

(iii) Expected return on plan assets – –

(iv) Past service costs – –

(v) Net actuarial (gain) / loss recognised in the period 2.79 (2.28)

Total expenses recognised in the statement of

profit and loss / (EDC) 9.90 4.17

(E) Category of plan assets

The Company’s plan assets in respect of gratuity are funded through the group schemes of the Life

Insurance Corporation of India



(F) Experience History

(Rs. in lakhs)





31, 2012 31, 2011

(i) Defined benefit obligation (26.30) (18.25)

(ii) Plan assets at the end of the period 20.55 –

(iii) Funded status (5.76) (18.25)

(iv) Experience gain / (loss) adjustments on plan liabilities (4.10) 1.30

(v) Experience gain / (loss) adjustments on plan assets – –

(vi) Actuarial gain / (loss) due to change on assumptions 1.32 0.98


i) General Assumption





31, 2012 31, 2012

(i) Discount rate (per annum) 8.00% 8.50%

(ii) Rate of return on plan assets (for funded scheme) 0.00% N.A.

(iii) Expected retirement age of employees (years) 58 58

(iv) Withdrawal rate of employees 5.00% 5.00%

(v) Rate of increase in compensation 9.00% 9.00%

Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality table

ii) Leave Policy

Leave balance as at the valuation date and each subsequent year following the valuation date to the

extent not availed by the employee (maximum to the extent of 120 days) is available for encashment on

separation from the Company.

(H) The Company did not have any employees in the previous year and hence comparative information is not

provided.

37 RELATED PARTY DISCLOSURE

A Holding Company:

Vadinar Oil Terminal Limited (immediate holding company)

Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited) (intermediate holding

company)

Essar Shipping & Logistic Limited, Cyprus (intermediate holding company)

Essar Global Limited (ultimate holding company)

B Other related parties / affiliated where there have been transactions:

Aegis Limited

Arkay Holdings Limited

277







Essar House Limited

Essar Information Technology Limited




Essar Oil Limited


Essar Project Management Consultants Limited


Essar Shipping Limited


C Key management personnel:

Mr. Girish Joshi - Manager (w.e.f. 18.10.2011)

(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Port and terminal and technical service income

Essar Oil Limited – – 19,525.07 – – – 19,525.07 –

Berth hire charges


Interest income

Essar Bulk Terminal Paradip Limited – – 1.19 1.53 – – 1.19 1.53

Essar Ports Limited* 438.70 128.08 – – – – 438.70 128.08

Essar Bulk Terminal Limited – – 146.10 124.01 – – 146.10 124.01

Sub total 438.70 128.08 147.29 125.54 – – 585.99 253.62

Sale of SPM


Recovery of expenses

Essar Ports Limited* 49.07 – – – – – 49.07 –

Lease rent expenses



Sub total – 0.83 104.25 67.87 – – 104.25 68.70

Rent expenses




Sub total – – 124.21 – – – 124.21 –

* formerly known as Essar Shipping Ports & Logistics Limited.



(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Hire charges


Operation and maintenance expenses


Professional / consultancy charges

Essar Engineering Services Limited – – – 16.55 – – – 16.55




Aegis Limited – – 25.83 10.07 – – 25.83 10.07


Vadinar Oil Terminal Limited 314.08 840.66 – – – – 314.08 840.66

Sub total 713.08 840.66 105.97 28.44 – – 819.05 869.10

Other miscellaneous expenses



Sub total 26.49 – 3.65 – – – 30.14 –

Purchase of fixed asset (CWIP /

EDC during the year)


Essar Project (India) Limited – – 31,400.72 12,484.99 – – 31,400.72 12,484.99

Essar Project Management Consultants

Limited – – 121.97 110.69 – – 121.97 110.69

Essar Engineering Services Limited – – – 1,411.24 – – – 1,411.24





Sub total 116.93 – 31,915.12 14,014.19 – – 32,032.05 14,014.19

Loans / advances / security deposit

received back


Essar Bulk Terminal Limited – – 1,200.00 – – – 1,200.00 –

Sub total – – 1,220.00 – – – 1,220.00 –

Loans / advances / security deposit given



Essar Shipping Limited – – – 150.00 – – – 150.00

Essar Bulk Terminal Limited – – – 1,311.61 – – – 1,311.61



Sub total – 3,615.27 66.00 1,483.14 – – 66.00 5,098.41


279




(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Issue of equity shares

Essar Ports Limited* 2,400.00 – – – – – 2,400.00 –


application money



Sub total – 3,350.00 – – – – – 3,350.00

Remuneration to key managerial person

Mr. Girish Joshi # – – – – 11.43 – 11.43 –


# figure does not include the amount payable towards gratuity and compensated absence by the Company as the same is calculated for the

company as a whole on actuarial basis

Outstanding as on year end

(Rs. in lakhs)

Nature of balances Holding company Other related Key management


2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Debtors


Sundry creditors / capital creditors

Essar Project (India) Limited – – 14,865.43 – – – 14,865.43 –

Essar Project Management Consultants

Limited – – 121.07 – – – 121.07 –


Aegis Limited – – 3.72 9.06 – – 3.72 9.06



Essar Engineering Services Limited – – – 33.88 – – – 33.88





Sub total 6,999.18 1,584.36 15,002.86 193.27 – – 22,002.04 1,777.63

Loans and advances


Essar Projects (India) Limited – – – 2,501.97 – – – 2,501.97



Sub total 326.57 – 115.68 2,501.97 – – 442.25 2,501.97

Income received in advance


Security deposit




Sub total – – 216.00 – – – 216.00 –




(Rs. in lakhs)



2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11

Inter corporate deposit given

(including accrued interest)

Essar Shipping Limited – – – 150.00 – – – 150.00

Essar Bulk Terminal Limited – – 29.78 1,311.61 – – 29.78 1,311.61

Essar Ports Limited* 4,010.10 3,615.27 – – – – 4,010.10 3,615.27


Sub total 4,010.10 3,615.27 29.78 1,483.13 – – 4,039.89 5,098.41


application money



Sub total – 3,350.00 – – – – – 3,350.00

Other receivable



behalf of company

Essar Ports Limited* 15,000.00 15,000.00 – – – – 15,000.00 15,000.00


38 As on March 31, 2012, the Company’s current liabilities exceeded its current assets by Rs. 23,098.73 lakhs due to

inclusion of capital creditors of Rs. 16,358.32 lakhs and current maturity of long term debts (repayable within the

next one year) amounting to Rs. 6,500.00 lakhs. The Company is in discussions with banks for raising long term

debt for repayment of capital creditors, which along with the operating cash profits during FY 2013 will be available

for meeting the current liabilities falling due during the year and also providing liquidity to the Company. Accordingly,

the Company has presented these financial statements on a going concern basis.

39 Previous year’s figures have been regrouped / reclassified wherever necessary, to conform to current year

classification as per the requirement of the Revised Schedule VI notified under the Companies Act, 1956.



Director Director

Mumbai

May 26, 2012

Essar Ports Limited,

Equinox Business Park,

LBS Marg, Kurla (W),

Mumbai - 400070

www.essarports.com

Documents

ESSAR PORTS LIMITED 36th Annual Report 2011-12 · Essar Ports Limited (EPL) is part of the multinational Essar Group, one of India’s largest conglomerates with a presence across