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NOTICE DIRECTORS’ REPORT GOVERNANCE FINANCIAL STATEMENTS

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CORPORATE INFORMATION

BOARD OF DIRECTORS

P. K. Srivastava Chairman

Dilip J. ThakkarIndependent Director

Deepak Kumar VarmaIndependent Director T. S. NarayanasamiIndependent Director

N. C. SinghalIndependent Director

Dr. Jose PaulIndependent Director

Michael PintoIndependent Director

Jesper KjaedegaardIndependent Director

Jan Joris Karel Adam Director Rajiv AgarwalCEO & Managing Director

K. K. SinhaWholetime Director

A. S. Bali Director Finance(w.e.f. May 15, 2014)

Shailesh Sawa Director Finance(upto May 15, 2014)

COMPANY SECRETARY Manoj Contractor

AUDITORSDeloitte Haskins & Sells

AUDIT COMMITTEET. S. NarayanasamiDeepak Kumar VarmaMichael PintoDr. Jose Paul

STAKEHOLDERS’ RELATIONSHIP COMMITTEEDeepak Kumar Varma Dr. Jose PaulRajiv Agarwal

NOMINATION AND REMUNERATION COMMITTEEMichael PintoDilip J. ThakkarDeepak Kumar VarmaP. K. Srivastava

CORPORATE SOCIAL RESPONSIBILITY COMMITTEEN. C. SinghalP. K. SrivastavaRajiv Agarwal

REGISTRARS & TRANSFER AGENTS Data Software Research Company Private Limited19, Pycrofts Garden RoadOff Haddows RoadNungambakkamChennai 600006Tel: + 91 44 2821 3738, 2821 4487 Fax: +91 44 2821 4636e-mail: [email protected]

REGISTERED OFFICE Administration Building Essar Refinery Complex Okha Highway (SH-25) Taluka KhambhaliaDistrict Jamnagar, Gujarat 361 305Tel: +91 2833 661449 - Fax: +91 2833 662929e-mail: [email protected]

CORPORATE OFFICEEssar House11, K. K. MargMahalaxmiMumbai 400 034 Tel: +91 22 6660 1100 / 4001 1100 Fax: +91 22 2354 4330e-mail: [email protected]

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NOTICE TO MEMBERSNotice is hereby given that the Thirty-Eighth Annual General Meeting of Essar Ports Limited will be held at the Registered Office of the Company at Administration Building, Essar Refinery Complex, Okha Highway (SH – 25), Taluka Khambhalia, Distt. - Jamnagar, Gujarat 361305 on Friday, September 26, 2014 at 2.00 p.m. to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Profit and Loss Account for the year ended March 31, 2014 and the Audited Balance Sheet as on that date and the Reports of the Board of Directors and Auditors thereon.

2. To declare a dividend on equity shares.

3. To appoint a Director in the place of Shri. Deepak Kumar Varma (DIN No. 00213394), who retires by rotation and being eligible, offers himself for re-appointment.

4. To appoint a Director in the place of Shri. Rajiv Agarwal (DIN No. 00903635), who retires by rotation and being eligible, offers himself for re-appointment.

5. To appoint a Director in the place of Shri. Jan Adam (DIN No. 05287357), who retires by rotation and being eligible, offers himself for re-appointment.

6. To consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules framed thereunder, as amended from time to time, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registration No. 117365W, be and is hereby re-appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the next AGM at such remuneration plus out-of-pocket, travelling and other expenses, as may be mutually agreed to between the Board of Directors of the Company and the Auditors.”

SPECIAL BUSINESS

7. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to Section 149, 152 and other applicable provisions of Companies Act, 2013 (‘Act’) and the Rules made thereunder read with Schedule IV of the Act, Shri. Jesper Kjaedegaard (DIN No. 00529039) who was appointed as an Additional Director of the Company by the Board of Directors with effect from October 31, 2013 and who holds office up to the date of this Annual General Meeting in terms of Section 161(1) of the Act and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company liable to retire by rotation.”

“RESOLVED FURTHER THAT the Board of Directors be and are hereby authorised to take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

8. To consider and if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 196, 197, Schedule V and other applicable provisions of the Companies Act, 2013 and subject to the approval of the Central Government, if required, approval of the Company be and is hereby accorded for the re-appointment of Shri. Kamla Kant Sinha (DIN No. 00009113), as a Wholetime Director of the Company for a period of three years with effect from July 4, 2014 on a remuneration and such other terms and conditions as set out in the Explanatory Statement annexed to the notice convening this meeting with liberty to the Board of Directors (hereinafter referred to as “Board” which term shall be deemed to include the Nomination and Remuneration Committee or any other Committees of the Board formed for the purpose).”

“RESOLVED FURTHER THAT notwithstanding anything hereinabove stated where in any financial year during the tenure of Shri. Sinha as a Wholetime Director of the Company, the Company incurs a loss or its profits are inadequate, the Company shall pay to Shri. Sinha the remuneration as set out in the Explanatory Statement by way of salary, bonus and other allowances as minimum remuneration.”



“RESOLVED THAT pursuant to Section 149, 152 and other applicable provisions of Companies Act, 2013 (‘Act’) and the Rules made thereunder read with Schedule IV of the Act, Shri. Amardeep Singh Bali (DIN No. 02207863) who was appointed as an Additional Director of the Company by the Board of Directors with effect from May 15, 2014 and who holds office up to the date of this Annual General Meeting in terms of Section 161(1) of the Act and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company liable to retire by rotation.”

“RESOLVED FURTHER THAT pursuant to the provisions of Section 196, 197, Schedule V and other applicable provisions of the Companies Act, 2013 and subject to the approval of the Central Government, if required the approval of the Company be and is hereby accorded for the appointment of Shri. Bali, as a Wholetime Director of the Company designated as Director Finance for a period of three years with effect from May 15, 2014 on a remuneration and such other terms and conditions as set out in the Explanatory Statement annexed to the notice convening this meeting with liberty to the Board of Directors (hereinafter referred to as “Board” which term shall be deemed to include the Nomination and Remuneration Committee or any other Committees of the Board formed for the purpose.”

“RESOLVED FURTHER THAT notwithstanding anything hereinabove stated where in any financial year during the tenure of Shri. Bali as a Wholetime Director of the Company, the Company incurs a loss or its profits are inadequate, the Company shall pay to Shri. Bali the remuneration as set out in the Explanatory


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Statement by way of salary, bonus and other allowances as a minimum remuneration.”



“RESOLVED THAT pursuant to the provisions of Sections 41, 42, 62, 71 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof, for the time being in force), enabling provisions of the Memorandum and Articles of Association of the Company, the Listing Agreements entered into by the Company with the Stock Exchanges where the shares of the Company are listed and in accordance with the guidelines issued by the Government of India (GOI), the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and/or any other competent authorities and clarifications thereof, issued from time to time, the applicable provisions of Foreign Exchange Management Act, 1999 (“FEMA”), Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000, Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993, Companies (Issue of Global Depository Receipts) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and subject to such approvals, permissions, consents and sanctions, as may be necessary from the GOI, RBI, SEBI and / or other competent authorities and subject to such conditions and modifications as may be prescribed or imposed by any of them while granting such approvals, permissions, consents and sanctions, which may be agreed to by the Board of Directors of the Company (hereinafter referred to as the ‘Board’, which term shall include any committee constituted / to be constituted by the Board for exercising the powers conferred on the Board by this Resolution), the consent of the Company be and is hereby accorded to the Board to create, offer, issue and allot (including with provisions for reservation on firm and / or competitive basis, for such part of issue and for such categories of persons including employees of the Company as may be permitted), in one or more tranches, Equity Shares and / or Equity Shares through Global Depository Securities (GDSs) / Receipts (GDRs) and / or American Depository Receipts (ADRs) and / or Optionally / Compulsorily Convertible / Foreign Currency Convertible Bonds (FCCBs) and / or Convertible Bonds, Convertible Debentures, fully or partly and / or any other instruments / securities, convertible into or exchangeable with Equity Shares and / or securities convertible into Equity Shares at the option of the Company and / or the holder(s) of such securities and / or securities linked to Equity Shares and / or securities with or without detachable / non detachable warrants and / or warrants with a right exercisable by the warrant holders to subscribe to Equity Shares and / or any instruments (hereinafter referred to as ‘Securities’ which terms shall inter alia include Equity Shares) or combination of Securities, with or without premium as the Board may, at its sole discretion decide by way of one or more public and / or private offerings in domestic and / or one or more international markets(s), with or without green shoe option, and / or private placement or issue through Prospectus, Institutional Placement Programme, Qualified Institutions Placement in accordance with the Guidelines for Qualified Institutions Placement prescribed under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended

or by anyone or more or a combination of the above modes / methods or otherwise and at such time or kinds, with or without an over allotment offer, and in one or more tranches, aggregating to an amount not exceeding US$ 1,000,000,000.00 (United States Dollar One Billion only) or in equivalent Indian Rupees or any other currency to Domestic / Foreign Investors / Qualified Institutional Buyers / Institutional Investors / Foreign Institutional Investors / Members / Employees / Non-Resident Indians / Companies / Bodies Corporate / Trusts / Mutual Funds / Banks / Financial Institutions / Insurance Companies / Pension Funds / Individuals or otherwise, whether shareholders of the Company or not and on such terms and conditions, as the Board may, at its sole discretion, at any time hereinafter decide.”

“RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board, in consultation with Lead Managers, Underwriters, Advisors, Merchant Bankers and / or other persons as appointed by the Company be and is hereby authorised to finalise the timing of the issue(s) / offering(s), including the investors to whom the Securities are to be allotted and accept any modifications to the terms of the issue as may be required and any other matter in connection with or incidental to the issue.”

“RESOLVED FURTHER THAT the Company and / or any entity, agency or body, authorised and / or appointed by the Company, may issue depository receipts representing the underlying Securities issued by the Company in negotiable, registered or bearer form with such features and attributes as are prevalent in domestic / international capital markets for instruments of this nature and to provide for the tradability and free transferability thereof as per practices and regulations (including listing on one or more stock exchange(s) inside or outside India) and under the forms and practices prevalent in the domestic / international markets.”

“RESOLVED FURTHER THAT:

i. The equity shares issued and allotted directly or upon conversion, exchange, redemption or cancellation of other Securities when fully paid up, shall rank pari-passu with the existing equity shares of the Company;

ii. The Relevant Date for determining the pricing of the Securities (whether on Qualified Institutions Placement to QIBs as per provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended or issue of equity shares underlying the GDSs / GDRs / ADRs or securities issued on conversion of FCCB(s) shall be the date of the meeting in which the Board decides to open the proposed issue or such date as may be notified by the SEBI or the RBI or any other authority from time to time; and

iii. For the purpose of giving effect to this resolution the Board be and is hereby authorised to do all such acts, deeds, matters and things as the Board may in its absolute discretion consider necessary, proper, expedient, desirable or appropriate for making the said issue as aforesaid and to settle any question, query, doubt or difficulty that may arise in this regard including the power to allot under subscribed portion, if any, in such manner and to such person(s) as the Board, may deem fit and proper in its absolute discretion to be most beneficial to the Company.”

“RESOLVED FURTHER THAT such of these Securities to be issued, which are not subscribed, may be disposed off by the Board in such manner and on such terms including offering / placing them with Banks / Financial Institutions / Mutual Funds or

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otherwise as the Board may deem fit and proper in its absolute discretion.”

“RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred by this resolution on it, to any Committee or Directors or any person or persons, as it may in its absolute discretion deem fit in order to give effect to this resolution.”


“RESOLVED THAT pursuant to the provisions of Section 14 and any other applicable provisions of the Companies Act, 2013 read with the relevent Rules (including any statutory modifications and re-enactments thereof for the time being in force) the Articles of Association of the Company be replaced with the new set of Articles of Association.”“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper and expedient to give effect to this resolution.”

12. To consider and if thought fit, to pass with or without modification, the following resolution as a Special resolution:“RESOLVED THAT in supersession of the earlier resolution passed under the erstwhile Section 293(1)(d) of the Companies Act, 1956, consent of the Company be and is hereby accorded in terms of Sections 180(1)(c) and 180(2) and all other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof for the time being in force), to the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include any Committee thereof or any person(s) authorised by the Board to exercise the powers conferred on the Board of Directors by this resolution) to raise or borrow, for and on behalf of the Company, any sum or sums of money from time to time from State or Central Government or one or more bodies corporate or Banks or Financial Institutions or Overseas Corporate Bodies or Foreign Financial Institutions or any other agency, either domestic or foreign or the public either Resident/Non-resident by way of cash credit, advances, deposits or bridge loans, term loans or any other loans either in Indian Currency or in foreign currency, whether unsecured or secured by mortgage, charge, hypothecation or pledge of the Company’s assets and properties whether movable and/or immovable or stock-in-trade (including book debts, bills, raw materials, stores and spare parts and components in stock or in transit) and debts and advances, notwithstanding that the sum or sums so borrowed together with the sums, if any, already borrowed by the Company (apart from the temporary loans obtained from the Company’s bankers in the ordinary course of business) may exceed in the aggregate of the paid-up capital of the Company and its free reserves, that is to say, Reserves not set apart for any specific purposes so that the total amount upto which the moneys may be so borrowed in excess of the paid up capital and free reserves shall not at any one time exceed Rs.8,000 crore (Rupees Eight Thousand crore only)”.“RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to negotiate with the lending entities and to finalise and execute the documents and deeds as may be applicable for creating the appropriate mortgages and/or charges on such of the immovable and/or movable properties of the Company on such terms and conditions as may be decided by the Board and to perform all such acts, deeds and things as may be necessary in this regard.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby empowered to do all necessary acts and things, as it may in its absolute discretion deemed fit in order to give effect to this resolution.”

Mumbai By Order of the BoardJuly 23, 2014

Manoj Contractor Company Secretary

Registered Office:Administration Building, Essar Refinery ComplexOkha Highway (SH – 25), Taluka KhambhaliaDistrict Jamnagar, Gujarat 361 305

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF ON A POLL ONLY. THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. Proxy forms in order to be effective should be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for the meeting.

3. Members / Proxies should bring the attendance slip duly filled in for attending the meeting.

4. The Register of Members and Share Transfer Books of the Company shall remain closed from Monday, September 22, 2014 to Friday, September 26, 2014 (both days inclusive).

5. The Explanatory Statement pursuant to section 102(1) of the Companies Act, 2013 relating to the Special Business at item Nos. 7 to 12 of the accompanying Notice is annexed.

6. Members desiring any information regarding the accounts are requested to write to the Company at “Essar House”, 11, K. K. Marg, Mahalaxmi, Mumbai 400 034 atleast 7 days before the date of the Meeting to enable the Company to keep the information ready.

7. The Notice of AGM along with the Annual Report 2013-2014 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/Depositories, unless any Member has requested for a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are being sent by the permitted mode.

8. In compliance with the provisions of Section 108 of the Companies Act, 2013 and the Rules framed thereunder, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by NSDL, on all resolutions set forth in this Notice.

9. Subject to the provisions of the Companies Act, 2013, dividend as recommended by the Board of Directors, if declared at the meeting, will be paid within a period of 30 days from the date of declaration, to those members whose names appear on the Register of Members as on September 20, 2014.


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Item No. 7

Shri. Jesper Kjaedegaard has been appointed as an Additional Director of the Company with effect from October 31, 2013. Shri. Kjaedegaard holds office upto the date of the ensuing Annual General Meeting.

Shri. Kjaedegaard has more than 37 years of experience in shipping and ports industry and was CEO of the Maersk Company UK Ltd. before he left the A. P. Moller Group in 2008. He was thereafter appointed as the President of the British Chamber of Shipping and Chairman of Maritime UK, an industry body representing ports, ship owners and companies, maritime insurance, brokers, classification societies and all other aspects of shipping in the UK.

Parallel to this he also joined several Boards as a Non-Executive Director/Chairman of both listed (FTSE) and privately owned companies in UK, Norway, Denmark and Brazil.

Shri. Kjaedegaard started his own Maritime Consulting business in 2008 and now works extensively with ports and investors around the world to build and develop port assets.

Shri. Kjaedegaard has deep experience with projects in India where he served on the Board of Maersk India Pvt. Ltd., for many years and was deeply involved in the development of both Gujarat Pipavav Port Limited in Pipavav and Gateway Terminals in Mumbai. He was also the first Chairman of the Board of Gateway Terminals.

The Company has received a notice from a member under Section 160 of the Companies Act, 2013, with requisite deposit proposing the name of Shri. Kjaedegaard as a candidate for the office of Director of the Company.

The Board is of the opinion that the appointment of Shri. Kjaedegaard would be in the best interest of the Company. The Board accordingly recommends the resolution at Item No.7 of the accompanying notice for your approval.

None of the Directors other than Shri. Kjaedegaard are concerned or interested in the resolution at Item No. 7 of the accompanying Notice.

Item No. 8

Your Company develops and operates ports and terminals and is one of India’s largest private-sector port company by capacity and throughput. Your Company provides these services through its subsidiaries which provide port and terminal services for liquid, dry bulk, break bulk, general cargo and small volumes of container cargo for specialised project equipment, with an existing aggregate capacity of 104 million metric tons per annum (MMTPA) across facilities located at Vadinar and Hazira in the State of Gujarat and Paradip in the State of Odisha and which is planned to be increased to 194 MMTPA.

Managing these facilities require expertise and experience. In view of the same, the Board of Directors at their meeting held on July 4, 2011 had appointed Shri. Kamla Kant Sinha as a Director on the Board of the Company.

The Board of Directors at their meeting held on July 4, 2011 had also appointed Shri. Sinha as a Wholetime Director of the Company for a period of three years with effect from July 4, 2011. Subsequently, the

members of the Company at their thirty-fifth Annual General Meeting held on September 9, 2011 had approved the appointment and payment of remuneration to Shri. Sinha.

The term of office of Shri. Sinha ended on July 3, 2014.

The Nomination and Remuneration Committee of the Board at their meeting held on May 14, 2014 has recommended to the Board the re-appointment and the remuneration payable to Shri. Sinha. Subsequently, the Board of Directors at their meeting held on May 15, 2014 have re-appointed Shri. Sinha as a Wholetime Director of the Company for a period of three years from July 4, 2014.

Shri. Sinha has done his B.Sc (Engg.) in Mechanical Engineering from BIT, Sindri and has obtained his Masters in Business Administration from FMS, University of Delhi.

Shri. Sinha has over 35 years experience with industry majors such as Petronet India Ltd., Indian Oil Corporation Limited and Bokaro Steel Limited.

Prior to joining Essar, he was the Managing Director at Petronet India Limited, a position he held since 2000.

Shri. 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.

Shri. Sinha has been associated with Vadinar Oil Terminal Limited, a subsidiary of the Company since September 2006 in various capacities.

Shri. Sinha is on the Board of various other public limited companies such as Petronet India Limited, Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Paradip Terminals Limited, Essar Bulk Terminal Limited, Essar Bulk Terminal (Salaya) Limited, Essar Bulk Terminal Paradip Limited, Essar Vizag Terminals Limited and Essar Dredging Limited.

Shri. Sinha is also a member of the Audit Committee of Essar Bulk Terminal Paradip Limited, Vadinar Ports & Terminals Limited and Essar Paradip Terminals Limited.

The gist of material terms relating to his appointment are as follows:

a. Basic salary in the range of Rs. 4,62,000/- to Rs.6,95,000/- per month.

b. In addition to the Basic Salary, Shri. Sinha shall be entitled to perquisites and allowances like accommodation (furnished or otherwise) or House Rent Allowance in lieu thereof; House Maintenance Allowance together with reimbursement of expenses/allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; education allowance; leave travel concession for self and his family including dependents; club fees, premium for medical insurance, commission and all other payments in the nature of perquisites and allowances as agreed by the Board of Directors or such other authority as may be delegated by the Board of Directors from time to time up to the limit of Rs. 11,80,000/- per month. As per the rules of the Company, Shri. Sinha will be eligible for Provident Fund, Gratuity and Superannuation, which payments shall not be included for

ANNEXURE TO NOTICEExplanatory Statement pursuant to Section 102 of the Companies Act, 2013

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the purpose of calculation of the Managerial Remuneration.

c. Notwithstanding anything to the contrary herein contained where in any financial year during the currency of tenure of Shri. Sinha, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary and perquisites and allowances as specified above.

d. Shri. Sinha shall not be paid any sitting fees for attending the meetings of the Board or any Committee(s) thereof.

e. Shri. Sinha shall be bound by the non-compete and confidentiality provisions as applicable to the members of the Board.

f. Shri. Sinha shall cease to be a Director if he ceases to be an employee.

g. Either party shall be entitled to terminate the employment by giving not less than three calendar months prior notice in writing in that behalf to the other party, provided that the Company shall be entitled to terminate Shri. Sinha’s employment at any time by payment to him of three months basic salary in lieu of such notice.

h. Shri. Sinha shall not be entitled to any compensation under the Act, in the event of loss of office as Wholetime Director in terms of the resolution.

The remuneration proposed for Shri. Sinha is in line with industry standard.

The Board is of the opinion that the re-appointment of Shri. Sinha would be in the best interest of the Company. The Board accordingly recommends the resolution at item No. 8 of the accompanying notice for your approval.

None of the Directors other than Shri. Sinha are concerned or interested in the resolution at item No. 8 of the accompanying Notice.

Item No. 9


Financial management of the above facilities is crucial, hence the Nomination and Remuneration Committee of the Board at their meeting held on May 14, 2014 has recommended the appointment and the remuneration payable to Shri. Bali as the Wholetime Director and Chief Financial Officer designated as Director Finance of the Company for a period of three years with effect from May 15, 2014. of the Company. The Board of Directors at their meeting held on May 15, 2014 have thereafter appointed Shri. A. S. Bali as an Additional Director and Chief Financial Officer (in wholetime employment) of the Company for a period of three years with effect from May 15, 2014.

Shri. Bali is B.Com. (Hons) from Delhi University and MBA & MS (Finance) from Northern Illinois University, USA.

Shri. Bali has over 25 years of rich and varied experience in financial markets with Fortune 100 companies viz., American Express Bank Ltd., GE Capital, Standard Chartered Bank Plc. etc.

Shri. Bali was certified Green Belt in Six Sigma during his tenure with GE Capital and is also a certified Risk Professional, a prerequisite for

senior management role with American Express Bank with advanced risk management training.

Shri. Bali is also engaged in community activities as Chief Trustee, Musafir, an NGO for Rural Development, Settlor for Bhai Vir Singh Education Trust, engaged in assisting under privileged children completing school education among others.

Prior to joining the Company, Shri. Bali was the Head, Investor Relations – Asia of Essar Group.

The gist of material terms relating to his appointment are as follows:

a. Basic salary in the range of Rs. 3,60,000/- to Rs. 4,50,000/- per month.

b. In addition to the Basic Salary, Shri. Bali shall be entitled to perquisites and allowances like accommodation (furnished or otherwise) or House Rent Allowance in lieu thereof; House Maintenance Allowance together with reimbursement of expenses/allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; education allowance; leave travel concession for self and his family including dependents; club fees, premium for medical insurance, commission and all other payments in the nature of perquisites and allowances as agreed by the Board of Directors or such other authority as may be delegated by the Board of Directors from time to time up to the limit of Rs. 14,25,000/- per month. As per the rules of the Company, Shri. Bali will be eligible for Provident Fund, Gratuity and Superannuation, which payments shall not be included for the purpose of calculation of the Managerial Remuneration.

c. Notwithstanding anything to the contrary herein contained where in any financial year during the currency of tenure of Shri. Bali, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary and perquisites and allowances as specified above.

d. Shri. Bali shall not be paid any sitting fees for attending the meetings of the Board or any Committee(s) thereof.

e. Shri. Bali shall be bound by the non-compete and confidentiality provisions as applicable to the members of the Board.

f. Shri. Bali shall cease to be a Director if he ceases to be an employee.

g. Either party shall be entitled to terminate the employment by giving not less than three calendar months prior notice in writing in that behalf to the other party, provided that the Company shall be entitled to terminate Shri. Bali’s employment at any time by payment to him of three months basic salary in lieu of such notice.

h. The term of the Wholetime Director may be terminated by either party (Company or the Wholetime Director) by giving the other three months prior notice of termination in writing.

i. Shri. Bali shall not be entitled to any compensation under the Act, in the event of loss of office as Wholetime Director in terms of the resolution.

The remuneration proposed for Shri. Bali is in line with industry standard.

The Board is of the opinion that the appointment of Shri. Bali would be in the best interest of the Company. The Board accordingly recommends the resolution at item No. 9 of the accompanying notice for your approval.

None of the Directors other than Shri. Bali are concerned or interested in the resolution at item No. 9 of the accompanying Notice.


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Item No. 10


Execution of various projects of the subsidiary companies require considerable amount of equity.

In order to meet the funding needs for the expansions plans mentioned above, including but not limited to meeting the equity needs of the Company for further organic and inorganic expansions and reducing the debt, the Company is exploring various options to raise fresh capital by issuance of either Equity Shares and / or Global Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs) or any other security (“Securities”) of the Company either by way of a public issue or a private placement (including a Qualified Institutional Placement in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, Institutional Placement Programme or such other mode / methods as may be permitted.

The detailed terms and conditions for the issue / offering will be determined in consultation with the lead managers, consultants, advisors and / or such other intermediaries as may be appointed for the issue / offer. Wherever necessary and applicable, the pricing of the issue / offer will be finalised in accordance with applicable guidelines in force, of the Government of India, Securities and Exchange Board of India, Reserve Bank of India and other appropriate authorities.

The size of any of the above issue / offering of Securities is proposed to be upto an aggregate amount not exceeding US$ 1,000,000,000.00 (United States Dollar One Billion only) or equivalent amount in Indian or any other currency (inclusive of such premium as may be determined) to be issued in one or more tranches.

The Securities issued pursuant to the issue / offering may be listed on the Indian stock exchange(s) and / or internationally recognised stock exchange(s).

Section 42 of the Companies Act, 2013 provides, inter alia, that whenever the Company proposes to increase its subscribed capital by further issue / offer and allotment of shares, such shares shall be offered to the existing members of the Company in the manner laid down in the said Section, unless the members decide otherwise by a special resolution.

Accordingly, the consent of the members is being sought pursuant to the provisions of Section 42 and all other applicable provisions of the Companies Act, 2013 and in terms of the provisions of the Listing Agreement(s) executed by the Company with the stock exchange(s), authorising the Board of Directors and / or a Committee thereof to issue the Securities, as stated in the resolution, which would result in issuance of shares of the Company to persons other than the existing members of the Company.

None of the Directors of the Company is in any way concerned or interested in the proposed resolution. The Board recommends the Special Resolution at item No. 10 of the accompanying notice for approval by the members.

Item No. 11The existing Articles of Association (AOA) are based on the Companies Act, 1956 and several regulations in the existing AOA contain references to specific sections of the Companies Act, 1956. The Companies Act, 1956 has since been replaced with the Companies Act, 2013 (the ‘Act’). Some Articles in the existing AOA are no longer in conformity with the Act. Hence, several provisions of the AOA which have become redundant either under the Companies Act, 1956 or with the coming into force of the Act, need to be deleted/altered.In light of the same, it is proposed to replace the current Articles with a fresh set of Articles so as to comply with the requirements of the Act.The revised Articles will be available for inspection at the Registered Office of the Company between 11.00 a.m. to 1.00 p.m. on all working days upto the date of Annual General Meeting. They shall also be available on the website of the Company at www.essar.comThe Directors recommend the Resolution at item No. 11 of the accompanying Notice for the approval of the Members of the Company.None of the Directors of the Company are directly or indirectly concerned or interested in this Resolution.Item No. 12Your Company develops and operates ports and terminals and is one of India’s largest private sector port company by capacity and throughput with an existing capacity of 104 million metric tons per annum (MMTPA) across facilities which is planned to be increased to 194 MMTPA. Your Company operates in the infrastructure space which is highly capital intensive in nature.The Members of the Company have earlier approved borrowings by the Company of Rs. 4,000 crore in excess of the paid up share capital and free reserves under Section 293(1)(d) of the erstwhile Companies Act, 1956 by way of an ordinary resolution.Section 180(1)(c) of the Companies Act, 2013 (the Act) however requires the approval of the Members to borrow in excess of the paid up share capital and free reserves by way of a special resolution. In view of the various expansion plans of the Company, your Board also proposes to enhance the borrowing limits to Rs. 8,000 crore in excess of the paid up share capital and free reserves from time to time. The approval of the Members is therefore sought to raise or borrow, for and on behalf of the Company any sum or sums of money from time to time from State or Central Government or one or more bodies corporate or Banks or Financial Institutions or Overseas Corporate Bodies or Foreign Financial Institutions or any other agency, either domestic or foreign or the public by way of a special resolution pursuant to Sections 180(1)(c) and 180(2) of the Act.The Directors recommend the Resolution at item No. 12 of the accompanying Notice for approval of the Members of the Company.None of the Directors of the Company are directly or indirectly concerned or interested in this Resolution.

By Order of the Board

Mumbai Manoj ContractorJuly 23, 2014 Company Secretary

Registered Office:Administration BuildingEssar Refinery Complex, Okha Highway (SH – 25)Taluka Khambhalia, Jamnagar, Gujarat 361 305

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ANNEXURE TO NOTICEDetails of Directors seeking appointment / re-appointment at the Thirty-Eighth Annual General Meeting in pursuance of Clause 49 of the Listing Agreement.

SHRI. DEEPAK KUMAR VARMA

Shri. Deepak Kumar Varma is B.E. (Mechanical) and MBA by qualification. He is a Management Consultant and Arbitrator by profession and is a member of the Indian Council of Arbitrators.

During his career Shri. Varma has held various senior management positions in Steel Authority of India Limited, 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 PSU’s.

Shri. Varma has rich experience in the fields of Construction, Project Implementation (Marine, Shipping, Shipbuilding & Offshore Construction), Oil Field Equipments Manufacturing (Steel, Chemical and Fertilizer / Petrochemical), Communication and Corporate Governance.

Shri. Varma is also a Director on the Board of various other Indian public limited companies such as Matix Fertilisers and Chemicals Limited, Essar Bulk Terminal Limited and Essar Bulk Terminal Paradip Limited.

Shri. Varma is also a member of the Audit Committee of Essar Ports Limited, Essar Bulk Terminal Limited and Matix Fertilisers and Chemicals Limited. He is also a member of the Stakeholders Relationship Committee of Essar Ports Limited.

Shri. Varma does not hold any shares in the Company.

SHRI. RAJIV AGARWAL

Shri. Agarwal is a Chartered Accountant, Cost and Works Accountant and Company Secretary by qualification with over 28 years of rich and varied experience in industries like Retail, BPO, Telecom, Manmade fibres, Shipping and Logistics etc., and has successfully led businesses as CEO since 1992, mainly in telecom services and shipping, logistics and ports sectors.

Shri. Agarwal was the Chief Executive Officer of Modi Champion during 1992-94 and Joint Managing Director of Modi Korea Telecom during 1994-97. He joined the Essar Group in 1997 as Chief Operating Officer in Essar Telecom. Shri. Agarwal served on the Board of public listed companies in India and United States of America. Shri. Agarwal has held the position of Chief Financial Officer and Executive Director on the Board of this Company during 1998-2002.

Shri. Agarwal was the President of IndoRama Synthetics Limited during 2002-2004. Shri. 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.

Shri. 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 – over 2 years in India Retail Forum.

Shri. Agarwal is currently a Director on the Board of following other public limited companies viz., Essar Bulk Terminal Limited, Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Bulk Terminal Paradip Limited, Essar Bulk Terminal (Salaya) Limited, Essar Paradip Terminals Limited, Essar Dredging Limited and Essar Vizag Terminals Limited.

Shri. Agarwal is also member of the Audit Committee of Essar Bulk Terminal Limited, Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Bulk Terminal Paradip Limited, Essar Bulk Terminal (Salaya) Limited and Essar Paradip Terminals Limited.

Shri. Agarwal does not hold any shares in the Company.

SHRI. JAN ADAM

Shri. Jan Adam has studied Economics at the University of Antwerp and has specialised in Accountancy from the University of Gent.

Presently Shri. Adam is the Chief Financial Officer of the Antwerp Port Authority.

Shri. Adam 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. He was also responsible for the department of concessions upto 2005. He also supervised the HR department for a year and a half.

After a stint with the military services, Shri. Adam was associated with Coopers & Lybrand (now Price Waterhouse Coopers) from 1986 to 2001 as financial auditor. He obtained professional qualification as Statutory Auditor for the period 1991 – 2001.

Shri. Adam is also a Director on the Board of Port of Antwerp International UK Limited, Port of Antwerp International NV, Amaris NPO, Deurganckdoksluis NV, Wind aan de Stroom NV and GZA npo. Shri. Adam is also the Chairman of the Audit Committee of GZA npo.

Shri. Adam does not hold any shares in the Company.

SHRI. JESPER KJAEDEGAARD

Shri. Kjaedegaard has more than 35 years of experience in shipping and ports industry and was C.E.O of the Maersk Company UK Ltd. Before he left the A. P. Moller Group in 2008. He was thereafter appointed as the President of the British Chamber of Shipping and Chairman of Maritime UK, an industry body representing ports, ship owners and companies, maritime insurance, brokers, classification societies and all other aspects of shipping in the UK.

Parallel to this he also joined several Boards as a Non-Executive Director/Chairman of both listed (FTSE) and privately owned companies in UK, Norway, Denmark and Brazil.

Shri. Kjaedegaard started his own Maritime Consulting business in 2008 and now works extensively with ports and investors around the world to build and develop port assets.


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Shri. Kjaedegaard has deep experience with projects in India where he served on the Board of Maersk India Pvt. Ltd., for many years and was deeply involved in the development of both Gujarat Pipavav Port Limited in Pipavav and Gateway Terminals in Mumbai. He was also the first Chairman of the Board of Gateway Terminals.

The Company has received a notice from a member under Section 257 of the Companies Act, 1956, with requisite deposit proposing the name of Shri. Kjaedegaard as a candidate for the office of Director of the Company.

Shri. Kjaedegaard does not hold any shares in the Company.

SHRI. KAMLA KANT SINHA

Shri. Sinha has done his B.Sc (Engg.) in Mechanical Engineering from BIT, Sindri and has obtained his Masters in Business Administration from FMS, University of Delhi.

Shri. Sinha has over 35 years 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.

Shri. 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.

Shri. Sinha has been associated with Vadinar Oil Terminal Limited, a subsidiary of the Company as CEO & Wholetime Director since September 2006.

Shri. Sinha is on the Board of various other public limited companies such as Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Paradip Terminals Limited, Essar Bulk Terminal Limited, Essar Bulk Terminal (Salaya) Limited and Essar Bulk Terminal Paradip Limited, Essar Vizag Terminals Limited and Essar Dredging Limited.

Shri. Sinha is also a Member of the Audit Committee of Essar Bulk Terminal Paradip Limited, Vadinar Ports & Terminals Limited and Essar Paradip Terminals Limited.

Shri. Sinha does not hold any shares in the Company.

SHRI. AMARDEEP SINGH BALI

Shri. Bali is a B.Com (Hons) from Delhi University and M.B.A & MS (Finance) from Northern Illinois University, USA.

Shri. Bali has over 25 years of rich and varied experience in financial markets with Fortune 100 Companies viz., American Express Bank Ltd, GE Capital, Standard Chartered Bank Plc. etc.

Shri. Bali has strong leadership qualities and demonstrated management excellence in Banking and Non Banking Finance Companies. He has geographically diverse work experience having worked in Canada, US, Indonesia, and India. Shri. Bali has strong social and professional networking skills, socially responsible with experience in managing NGOs engaged in Education and Rural Development, and Youth empowerment through Vocational Training (Finance).

After his stint with the Banking Industry, Shri. Bali joined Essar Services India Limited as Head, Investor Relations, Asia, responsible for establishing new and deepening exciting Investor Relations. Shri. Bali

was also responsible for identifying and addressing market concerns relating to Essar Group and plug gaps/add value where possible to Business IR and Group in General.

Prior to this, Shri. Bali was a Promoter Director of Fore Consultants (P.) Ltd., a boutique advisory and consulting firm engaged in strategy, financial management of mid sized companies and Tourism Infrastructure Development.

Shri. Bali has been associated with Standard Chartered Bank, Plc. (SCB) in various capacities such as Head - South Asia, Head Commercial Real Estate, Regional Executive North and Senior Banker.

Shri. Bali was also associated with GE Capital Services (India) – GECSI for 5 years as VP & Head-Construction Financing; VP & Head-Managed Assets Group; and VP & Head-Corporate Accounts.

Shri. Bali was also associated with American Express Bank Ltd. (AEBL) as Director, Corporate Banking, Vilas Investments Inc. Illinois, USA and Markham Computers Inc., Canada (MCI).

Shri. Bali was certified Green Belt in Six Sigma during his tenure with GE Capital and is also a certified Risk Professional, a prerequisite for senior management role with American Express Bank with advanced risk management training.

Shri. Bali is also engaged in community activities as Chief Trustee, Musafir, an NGO for Rural Development, Settlor for Bhai Vir Singh Education Trust, engaged in assisting under privileged children completing school education among others.

Shri. Bali is a Non-Executive Director of Oriental Insurance Company Limited.

Shri. Bali also completed various training courses such as through RBI Training College Credit Appraisal & Working Capital Assessment, Credit Derivatives, Corporate Finance, Treasury, Foreign Exchange and Derivatives, Banking Law and Practice, Consultative Selling Skills, Leadership Essentials and Interviewing Skills.

Shri. Bali has received various awards viz., Best Leader Award, GE Leadership excellence, Best Region Award, various Performance Awards, Chairman’s Quality Award and other several management recognition awards for Team.

Shri. Bali is on the Board of various other public limited companies such as Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Paradip Terminals Limited, Essar Bulk Terminal Limited, Essar Bulk Terminal (Salaya) Limited, Essar Bulk Terminal Paradip Limited, Essar Vizag Terminals Limited, Essar Dredging Limited and Oriental Insurance Company Limited.

Shri. Bali does not hold any shares in the Company.


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DIRECTORS’ REPORTTo the Members of Essar Ports Limited

Your Directors take pleasure in presenting the Thirty-Eighth Annual Report of your Company together with Audited Accounts for the year ended March 31, 2014.

1. FINANCIAL RESULTS

The summary of consolidated and standalone financial results of your Company for the year ended March 31, 2014 are furnished below:

(Rs. in crore)

Particulars Consolidated StandaloneFor the

year endedMarch 31, 2014

For theyear ended

March 31, 2013

For theyear ended

March 31, 2014

For theyear ended

March 31, 2013Total Revenue 2,214.89 1,448.59 84.26 74.19Total Expenses 887.76 280.72 52.22 32.42Profit before exceptional items, finance costs, tax, depreciation and amortisation

1,327.13 1,167.87 32.04 41.77

Less: Finance costs 599.09 524.77 51.70 72.47Less: Depreciation and amortisation 277.21 244.03 7.59 7.62Profit / (Loss) before exceptional item and tax 450.83 399.07 (27.25) (38.32)Less: Exceptional item - Net gain on sale ofnon-current investment -- -- 1.50 --Profit / (Loss) after exceptional item and before Tax 450.83 399.07 (25.75) (38.32)Less: Provision for Tax 63.40 64.47 0.00 0.05Profit / (Loss) before Share of Minority Interest 387.43 334.60 (25.75) (38.37)Less: Share of Minority Interest 3.69 3.05 -- --Profit / Loss for the year 383.74 331.55 (25.75) (38.37)

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

After growing as much as 9% in 2011, India’s economy slowed to less than 5% growth in the past couple of years. The GDP growth is estimated to have moderated to 4.7% in financial year 2013-14. However, the government expects the growth to be back on track soon as institutional reforms quicken implementation of large projects. A stronger-than-expected recovery would help the Indian economy clock a higher rate of growth. The revival of private investment is the key to raise India’s GDP growth in the coming years and the sentiment has improved.

The long-term outlook for infrastructure continues to be positive and investments in the infrastructure sector are expected to be fastened through easing of interest rates, maintaining stability of currency and improving investor sentiment through quick policy decisions. Creation of favourable climate for growth in

investments in imported coal based power plants, steel industry, petroleum refineries, infrastructure and manufacturing sector is quite essential for revival of growth in Indian economy. With focus on investments in Infrastructure, economy growth is estimated to bounce back to more than 5.5% in financial year 2014-15 and to 8% growth in three years’ time. Our overall outlook for the infrastructure industry continues to stay positive.

Ports Sector

During financial year 2013-14, cargo at major and non-major ports has improved significantly owing to increase in coal import traffic and improvement in iron ore cargo handling over the previous year. Coal import and Iron ore export is expected to increase with strengthening of global economy.

The traffic at Indian ports has grown at an impressive CAGR of 8% in the last 10 years. While there was a moderation of growth in last few years which is primarily due to lower iron ore exports, the port volumes have seen a spurt driven by higher coal imports. In the last few months, cargo at major and non major ports has improved significantly owing to increase in coal import traffic and improvement in iron ore cargo handling.


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Major ports had recorded reduction of traffic by 2.5% to 546 MMT in 2012-13 from 560 MMT in 2011-12. However, the trend has improved after major ports registered traffic growth of 1.8% at 555 MMT during 2013-14 as against 546 MMT during 2012-13. The growth in ports capacity in India continued to be sluggish due to various delays faced by new port projects in terms of slower bidding processes, delay in regulatory approvals and execution delays. Also high entry barriers continue to exist in the ports industry today on account of higher capital expenditure and longer gestation period to realise returns on investment.

Coal import through ports is expected to further increase driven by huge demand of imported coal for power plants, coastal movement of coal for power plants and demand of coking coal for steel industry. Dry bulk cargo is expected to continue to grow at over 10%. Ports sector looks poised for higher growth driven by demand of coal for power plants and demand of coking coal for steel industry. Iron ore traffic at the port is also expected to pick up with increase in demand of exports as well as coastal movement. Petroleum, Oil & Lubricant cargo is also expected to increase at a steady rate due to increase in India’s export of petroleum products and increased domestic demand. Also, containerisation which is low when compared to the likes of China, USA & Singapore, is expected to increase with boost in trade and growth in manufacturing sector. Overall, we maintain a positive outlook for ports sector.

Essar Ports – performance

Your 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.

Performance Highlights:

• Essar Ports board recommends a dividend of 5% (Rs. 0.50 per share) for FY14.

• Revenue for the year (excluding trade revenues to fulfill export obligations) increased by 13% to Rs. 1,637.4 crore from Rs. 1,448.6 crore for the previous year. For Q4 FY14, the Revenues increased by 5% to Rs. 415.5 crore from Rs. 396.7 crore in Q4 FY13.

• EBITDA for the year increased by 14% to Rs. 1,327.1 crore from Rs. 1,167.9 crore for the previous year. For Q4 FY14, EBITDA increased by 7% to Rs. 329.6 crore from Rs. 307.4 crore in Q4 FY13.

• Net Profit for the year increased by 16% to Rs. 383.7 crore from Rs. 331.6 crore for the previous year. For Q4 FY14, the Net Profit reduced by 1% to Rs. 90.8 crore from Rs. 92.1 crore in Q4 FY13.

• Earnings Per Share for the year was Rs. 8.97 as against Rs. 7.80 for previous year. Earnings Per Share for Q4 FY14 was Rs. 2.12 as against Rs. 2.15 for Q4 FY13.

Other Key Highlights

Traffic handled

• 52.24 million tonnes of cargo handled during FY14 as

against 54.52 million tonnes of cargo handled during FY13.

Minimum Public Shareholding requirement complied

• The Company achieved 25% minimum public shareholding requirements of SEBI by successfully completing dilution through Offer for Sale.

New Projects

• Won the bid for 23 MMTPA Iron Ore terminal at Vizag. Project will significantly enhance third party mix of the Company and gives strategic presence on the east coast after Paradip.

• The Vizag Terminal Concession Agreement was signed with Vishakhapatnam Port Trust on December 13, 2013. The 23 MTPA project will be developed over a period of three years. Your Company will take over the two outer harbour berths soon and the operation and upgradation of the terminal will be undertaken simultaneously.

• Paradip coal terminal construction is expected to commence soon as the Supreme Court has dismissed all the petitions filed by port users occupying the land during December 2013. The Paradip Port Trust has initiated action to vacate the land earmarked for the terminal.

Approvals

• Stage 1 Forest Clearance (FCA) for Salaya port has been received. Compensatory afforestation land has been finalised and agreement has been executed. Final FCA clearance is expected soon.

• Received final environment clearance for Hazira expansion.

• Court cases by labour unions against award of concession of Vizag iron ore terminals have been dismissed by Honourable High Court of Andhra Pradesh.

Third Party Cargo set to increase

• Upgradation of Vizag terminal simultaneously with operations. Terminal will contribute to third party revenues of your Company from FY2014-15.

• Increasing Third Party cargo share upon addition of new projects: Salaya and Paradip Coal.

Awards and Citations

• The Hazira terminal was adjudged winner of the Port /Terminal of the year – Health, Safety, Environment at the Gujarat Star Award 2013.

• The Hazira terminal received Greentech Gold Safety Award 2013.

• The Vadinar Terminal received the Safety Award from Lloyd’s List Middle East & Indian Subcontinent 2013.

• The Vadinar Terminal also received a certificate of Appreciation from Gujarat Safety Council for achieving Accident Free 1 million man hours.

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Progress of the project under implementation:

• 20 MMTPA coal berth at Salaya is estimated to be completed by March 2015. Construction of Jetty has been completed and Approach Trestle to Jetty has also been completed. Loader and two unloaders have been erected and stockyard has also been completed. Bund work is in progress and Conveyor fabrication is under progress. 1,710 MW of imported coal based power generating capacity is already operational which will result in ready traffic as soon as the project is commissioned.

Risk and Concerns

Implementation and operation of port and terminal facilities are dependent on various regulatory approvals and government policies. Changes in macroeconomic factors like inflation, interest rate, world trade and natural catastrophies 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 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 with respect to Quality, Safety and Environment Management Systems. The initiatives by your Company have been rewarded with several recognitions. Some of the key recognitions are as follows:

• Vadinar Oil Terminal Limited (VOTL) has been 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’.

• VOTL has completed over 2,700 Lost Time Injury Free days during the year under review.

• In line with Environment Management initiatives, VOTL successfully achieved the ‘Zero Spill / No Spill’, target and ‘Reduction of Emission’.

• An Annual Audit was also successfully carried out for the following ISO certifications:

- ISO 9001:2008 Quality Management System by ABS;

- ISO/TS 29001:2007 for Quality Management – Petroleum Sector by ABS

- ISO 28000:2007 for Security Management Systems by ABS

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

- ISO 9001:2008 Quality Management System by DNV; and

- ISO 18001:2007 OHSAS by DNV.

• Essar Bulk Terminal Limited (EBTL) also achieved Zero Loss Time Injury during the year.

• EBTL has been certified for the following :

- ISO 18001:2007 OHSAS by IRQS for health & Safety

- ISO 14001:2004 Environment Management System by IRQS

- ISO 9001:2008 Quality Management System by IRQS

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

5. INTERNAL CONTROL FRAMEWORKYour 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 RESOURCEHuman resources have always been the key to success of your Company’s business. 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, special emphasis was laid on the training of employees with a combination of “On the job and Off the job” training.

7. INFORMATION TECHNOLOGYYour 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. SUBSIDIARIESAs on March 31, 2014, 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 Vizag Terminals Limited (a subsidiary of VOTL) 4. Essar Bulk Terminal Limited (EBTL)5. Essar Bulk Terminal Paradip Limited (a subsidiary of EBTL)6. Essar Dredging Limited (a subsidiary of EBTL)7. Essar Bulk Terminal (Salaya) Limited8. Essar Paradip Terminals Limited


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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. DIRECTORSIn accordance with the provisions of the Companies Act,1956 and the Articles of Association of the Company, Shri. Deepak Kumar Varma, Shri. Rajiv Agarwal and Shri. Jan Adam retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. It is proposed to re-appoint Shri. Kamla Kant Sinha, Wholetime Director for a term of three years from July 4, 2014.

Shri. Jesper Kjaedegaard and Shri. Amardeep Singh Bali (Wholetime Director) have been appointed as an Additional Directors on October 31, 2013 and May 15, 2014 respectively. The Company has received notices from members proposing the appointment of Shri. Kjaedegaard and Shri. Bali as Directors of your Company.

Shri. Shailesh Sawa, Wholetime Director (designated as Director Finance) has resigned from the directorship of your Company with effect from May 15, 2014. Your Board places on record its appreciation for the valuable contributions made by Shri. Sawa in the growth and progress of the Company during his tenure as Director.

10. AUDITORSYour 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 the Companies Act, 2013 and that they are not disqualified for re-appointment.

11. CORPORATE GOVERNANCEThe 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, 1988This does not apply to your Company as the Ports & Terminals industry is not included in the Schedule to the relevant rules.

Total Foreign Exchange:(1) Earned (including freight, charter, hire earnings, interest income,

etc.) Rs. 324.45 lakhs.

(2) Used (including loan repayments, interest, operating expenses, etc.) Rs. 1,671.56 lakhs.

13. PARTICULARS OF EMPLOYEESInformation 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 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 RESPONSIBILITIESPursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 and based on the information provided by the Management your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

b) accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made 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) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the annual accounts of the Company have been prepared on a going concern basis.

15. APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their sincere thanks and appreciation to all the employees for their commendable team work 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 SawaManaging Director Director Finance

MumbaiMay 15, 2014

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CORPORATE GOVERNANCE REPORT1. 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 shareholders 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 overseas periodic review of business plans, monitors performance and ensures compliance of regulatory requirements including SEBI Regulations and Listing requirements.

2. Board of Directors

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

As at March 31, 2014 the Board consisted of twelve 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

Shri. Dilip J. Thakkar Independent - Non Executive 12 5 4

Shri. Deepak Kumar Varma Independent - Non Executive 3 - 2

Shri. T. S. Narayanasami Independent - Non Executive 7 - 5

Shri. Jan Adam Non Independent - Non Executive - - -

+Shri. N. C. Singhal Independent - Non Executive 10 4 4

+Dr. Jose Paul Independent - Non Executive 1 - -

+Shri. Michael Pinto Independent - Non Executive 9 2 5

#Shri. Jesper Kjaedegaard Independent Non-Executive - - -

Shri. P. K. Srivastava Non-Promoter Professional 9 - -

Shri. Rajiv Agarwal(Managing Director & CEO) Non-Promoter Executive 8 - 6

Shri. K. K. Sinha (Wholetime Director) Non-Promoter Executive 9 - 3

Shri. Shailesh Sawa(Director Finance) Non-Promoter Executive 8 - 6

* excludes foreign companies, private limited companies, Section 25 companies and Alternate Directorships. ** includes membership of Audit and Shareholders’ Grievance Committee only. + were appointed as Directors on July 18, 2013. # was appointed as an Additional Director w.e.f. October 31, 2013.

B. Details of Board Meetings held during the year:

Sr. No. Date Board Strength No. of Directors present1 April 18, 2013 9 7

2 July 18, 2013 12 11

3 October 31, 2013 12 9

4 January 23, 2014 12 11

5 March 18, 2014 12 10


15

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

Director No. of Board Meetings attended Attendance at last AGM*Shri. R. N. Bansal Nil NoShri. Dilip J. Thakkar 2 NoShri. Deepak Kumar Varma 4 NoShri. T. S. Narayanasami 4 No**Shri. N. C. Singhal 4 No**Dr. Jose Paul 4 Yes**Shri. Michael Pinto 3 Yes***Shri. Jesper Kjaedegaard 3 NoShri. Jan Adam 4 NoShri. P. K. Srivastava 5 YesShri. Rajiv Agarwal 5 YesShri. K. K. Sinha 5 YesShri. Shailesh Sawa 5 Yes

* ceased to be director on August 8, 2013.

** appointed as Directors on July 18, 2013.

*** appointed as Director on October 31, 2013.

3. Audit Committee:

The Audit Committee of the Company inter-alia performs all the functions specified under the Companies Act, 1956 and Clause 49 of the Listing Agreement.

Composition:

As on March 31, 2014, the Committee comprised of four 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, Statutory Auditors and Internal Auditors attend the meetings. With the resignation of Shri. R. N. Bansal (Chairman of the Committee) w.e.f. August 8, 2013, Shri. T. S. Narayanasami was appointed as the Chairman of the Committee w.e.f. October 31, 2013 and 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 present1 April 18, 2013 3 2

2 July 18, 2013 3 2

3 October 31, 2013 4 3

4 January 22, 2014 4 3

Attendance at Audit Committee Meetings:

Director No. of meetings held No. of meetings attended*Shri. R. N. Bansal 2 Nil

Shri. T. S. Narayanasami 4 3

Shri. Deepak Kumar Varma 4 3

**Shri. Michael Pinto 2 2

**Dr. Jose Paul 2 2

* resigned w.e.f. August 8, 2013. **appointed on October 31, 2013.

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4. Remuneration to Directors:

Details of Remuneration paid to the Managing Director and Wholetime Directors during the year ended March 31, 2014 is as under: (Rs.)

Name of Director Basic Salary Allowances, Perquisites and other benefits

Contribution to Provident & Superannuation Fund

Total

Shri. Rajiv Agarwal, CEO & Managing Director

5,739,538 27,454,702 688,745 33,882,985

Shri. K. K. SinhaChief Executive Officer

5,545,680 7,546,205 665,482 13,757,367

Shri. Shailesh SawaDirector Finance

7,200,000 9,510,299 864,000 17,574,299

The Services of the aforesaid Executive Directors can be mutually terminated by giving three month’s notice or three month’s salary in lieu thereof.

Stock Options During the year the following Stock Options have been granted to the Executive Directors:

Name of Director No. of Stock Options GrantedShri. Rajiv Agarwal 458,383Shri. Shailesh Sawa 250,027

These Stock Options have been granted on January 22, 2014. One third Options granted shall Vest at the end of third, fourth and fifth year 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. 57.75 per Option.

Details of sitting fees paid to Non-Executive Directors for the meetings held during the year ended March 31, 2014:

Non-Executive Directors Sitting Fees paid for Board/Committee meetings (Rs.)Shri. Dilip J. Thakkar 50,000Shri. Deepak Kumar Varma 2,05,000Shri. T. S. Narayanasami 1,15,000Shri. N. C. Singhal 95,000Dr. Jose Paul 1,70,000Shri. Michael Pinto 1,55,000Shri. Jesper Kjaedegaard 60,000

No shares or convertible instruments are held by any non-executive Directors in the Company.

5. Stakeholders Relationship Committee and Share Transfer Committee:

A. Stakeholders Relationship Committee:

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

As on March 31, 2014 the Committee comprised of Shri. Deepak Kumar Varma (Chairman), Dr. Jose Paul, Shri. Rajiv Agarwal and Shri. Shailesh Sawa.Shri. R. N. Bansal resigned from the Committee w.e.f. July 18, 2013 and Dr. Jose Paul was appointed on the same day on the Committee.The committee met 4 times during the year ended March 31, 2014.

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, etc., is effective and efficient.

Composition: The Committee comprised of Shri. Rajiv Agarwal, Shri. K. K. Sinha and Shri. Shailesh Sawa.

The Board has further authorised the Executive Directors and Company Secretary to approve the Share Transfer 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, 2014.


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Details of shareholders complaints received, solved and pending share transfers: There were no complaints pending at the beginning of the year. A total of 116 complaints were received during the year ended March 31,

2014, most of which being non-receipt of share certificates and annual reports. All the complaints were redressed under the supervision of the Committee and no complaints were outstanding as on March 31, 2014.

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, 2014.

6. General Body Meetings:

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

Financial year Meeting Date Time Location2010-11 AGM 09-09-11 12.00 PM Administration Building Essar Refinery

Complex Okha Highway (SH-25) Taluka Khambhalia, Dist. Jamnagar Gujarat 361305

2011-12 AGM 27-09-12 02.30 PM

2012-13 AGM 26-09-13 02.30 PM

(b) Special Resolutions passed in the previous three Annual General Meetings:

September 9, 2011:

- Remuneration to be paid to Shri. Rajiv Agarwal, CEO & Managing Director.- Remuneration to be paid to Shri. Shailesh Sawa, Director Finance.- Remuneration to be paid to Shri. 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 subsidiary and holding companies.

September 27, 2012:- To issue Equity Shares, Foreign Currency Convertible Bonds, Global Depository Receipts, etc.- To increase the maximum number of Options to be issued per employee under the Essar Ports Employees Stock Options Scheme – 2011.- Amend the Articles of Association of the Company.

September 26, 2013:- Re-appointment and payment of remuneration to Shri. Rajiv Agarwal as Managing Director.- Re-appointment and payment of remuneration to Shri. Shailesh Sawa as Whole-time Director.- To issue Equity Shares, Foreign Currency Convertible Bonds, Global Depository Receipts, etc.

(c) No resolutions are proposed to be passed at the ensuing Annual General Meeting which will require approval of members through Postal Ballot.

(d) Approval sought through Postal Ballot:- Approval of the members for making investments in, granting loans to, furnishing guarantees and providing securities on behalf of

subsidiaries for an amount not exceeding Rs. 750 crore for each subsidiary over and above the investments made, loans granted, guarantees furnished and securities provided was sought through Postal Ballot. The result of the Postal Ballot was declared on September 26, 2013 with 99.98% votes in favour of the resolution.

- Approval of the members for making investments in New Coal Terminal Beira, S.A. (NCTB) for an amount not exceeding USD 25 million and for providing a corporate guarantee / security for an amount not exceeding USD 10 million on behalf of NCTB. The result of the Postal Ballot was declared on April 28, 2014 with 99.48% votes in favour of the resolution.

Shri. Bhavin Mehta, Practicing Company Secretary acted as Scrutinizer for the above Postal Ballots.

7. Disclosures:• There are no materially significant related party 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.• Transactions with related parties during the year are disclosed in Note No.31 forming part of the financial statements in the Annual

Report.• During the last three years no penalty or stricture has been imposed on the Company by Stock Exchanges/SEBI/Statutory Authorities

on matters related to Capital Markets.

18

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 websites:www.essar.com and www.essarports.com

Publication of financial results Published in major newspapers such as Business Standard, Jai Hind and Sanj Samachar.

Presentation to Institutional Investors and to the Analyst

Press releases and presentations made to Institutional Investors and Analysts are displayed on the Company’s websites: www.essar.com and www.essarports.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 26, 2014Venue Administration Building, Essar Refinery Complex

Okha Highway (SH - 25), Taluka KhambhaliaDistt. - Jamnagar, Gujarat 361305

Time 2.00 p.m. Book Closure September 22, 2014 to September 26, 2014

(both days inclusive)Dividend Payment The dividend if approved by the Members will be paid within 30 days of approval

B. Financial Calendar:Financial year of Company April 1, 2014 to March 31, 2015First Quarter results On or before July 14, 2014Second Quarter results On or before November 14, 2014Third Quarter results On or before February 14, 2015Annual results for the year On or before May 30, 2015

C. Registrars and Share Transfer Agents:Data Software Research Company Private Limited19, Pycrofts Garden Road, Off Haddows RoadNungambakkam, Chennai - 600 006Tel:(044) 2821 3738, 2821 4487 Fax: (044) 2821 2133 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 Participant.

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

BSE Ltd. Phiroze Jeejeebhoy TowersDalal Street, Mumbai 400 023Code : 500630

National Stock Exchange of India Ltd.Exchange Plaza, Bandra Kurla ComplexBandra East, Mumbai 500 051Code : ESSARPORTS

Annual Listing fees for the year 2014-15 have been paid.


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Market price data (High/Low) during each month in the year 2013-2014 on the BSE Limited and National Stock Exchange of India Limited:

BSE Ltd. National Stock Exchange of India Ltd.Month Highest Lowest Month Highest LowestApril, 2013 94.80 84.00 April, 2013 96.00 81.65May, 2013 93.40 76.10 May, 2013 93.95 77.10June, 2013 78.90 70.10 June, 2013 79.50 70.15July, 2013 78.00 66.10 July, 2013 78.00 66.65August, 2013 71.80 55.00 August, 2013 71.45 55.40September, 2013 72.90 61.00 September, 2013 72.50 60.55October, 2013 65.40 58.00 October, 2013 64.00 58.00November, 2013 63.00 55.20 November, 2013 63.90 55.00December, 2013 63.80 54.35 December, 2013 65.00 54.80January, 2014 64.80 54.55 January, 2014 63.00 54.10February, 2014 55.20 49.00 February, 2014 55.75 49.00March, 2014 53.10 48.00 March, 2014 52.65 47.85

Scrip Code : 500630 Scrip Code : ESSARPORTS

Share Price performance in comparison to BSE Sensex

F. Shareholding Pattern as on March 31, 2014:

SHAREHOLDING BY NO. OF SHARES %

Promoters 32,07,81,141 74.97

Financial Institutions/Mutual Funds/Banks/Insurance Companies 58,41,904 1.36

Domestic Corporate Bodies 2,22,65,945 5.20

Foreign Institutional Investors 4,00,18,667 9.36

Non-Resident Individuals 5,83,625 0.14

Non-Domestic Companies 1,74,32,446 4.07

Public 2,09,64,270 4.90

Total 42,78,87,998 100.00

Share price on BSE BSE Sensex

18500

19000

19500

20000

20500

21000

21500

22000

22500

23000

23500

40.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

80.00

85.00

90.00

95.00

100.00

BS

E In

dic

es

Sh

are

Pri

ce

Months

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb-

14

Mar

-14

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G. Distribution of Shareholding as on March 31, 2014:

No. of equity shares held Number of shareholders % of shareholders Total number of shares % of holdingUpto 5000 96,266 99.61 1,43,99,728 3.375001-10000 186 0.19 13,44,715 0.3110001-20000 72 0.07 9,96,028 0.2320001-30000 30 0.03 7,60,384 0.1830001-40000 15 0.02 5,01,517 0.1240001-50000 8 0.01 3,58,880 0.0850001-100000 25 0.03 18,49,738 0.43100001 and above 45 0.04 40,76,77,008 95.28TOTAL 96,647 100.00 42,78,87,998 100.00

H. Compliance Officer : Shri. Manoj Contractor, Company Secretary

I. Registered Office : Administration Building, Essar Refinery Complex, Okha Highway (SH - 25) Taluka Khambhalia, Distt. – Jamnagar, Gujarat 361305

J. Administration Office : Essar House, 11, K. K. Marg, Mahalaxmi, Mumbai 400 034 Tel: (022) 6660 1100 / 4001 1100 Fax: (022) 2354 4330 e-mail: [email protected]

K. Status of Dematerialisation of shares as on March 31, 2014:

Mode No. of shares No. of folios %Physical 52,57,402 51,559 1.23Demat 42,26,30,596 45,088 98.77TOTAL 42,78,87,998 96,647 100.00

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, 2014 there are 2,800 Foreign Currency Convertible Bonds (FCCB’s), aggregating US$ 39,999,998 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 US$ - INR conversion rate has been fixed at 1 US$ = 46.94 INR. These FCCB’s 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. Nomination and Remuneration Committee:

The Committee comprises of four non-executive Directors of which three are Independent 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 websites of the Company i.e. www.essar.com and www.essarports.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.


21

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 (“the Company”) for the year ended March, 31, 2014, as stipulated in clause 49 of the Listing Agreement ended 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 the 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 has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement except that the Chairman of the Audit Committee was not present at the Annual General Meeting of the Company held on September 26, 2013.

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.

For Deloitte Haskins & Sells Chartered Accountants

(Firm Regn. No. 117365W)

Samir R. ShahMumbai PartnerMay 15, 2014 (Membership No. 101708)

DECLARATION ON COMPLIANCE OF THE COMPANY’S CODE OF CONDUCT TO THE MEMBERS OF ESSAR PORTS LIMITED

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, 2014.

Rajiv Agarwal CEO & Managing DirectorMumbai May 15, 2014


21

22

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF

ESSAR PORTS LIMI TED

Report on the Financial Statements

We have audited the accompanying financial statements of ESSAR PORTS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 31, 2013 of the Ministry of Corporate Affairs).

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

For DELOITTE HASKINS & SELLSChartered Accountants

(Firm’s Registration No. 117365W)

Samir R. Shah

Mumbai PartnerMay 15, 2014 Membership No. 101708


23

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) In respect of its fixed assets:(a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of 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) None of the fixed assets were disposed off during the year.(ii) According to the information and explanations given to us and having

regard to the nature of the Company’s business, the Company does not have any inventories as at the balance sheet date since procurements are issued directly for consumption and therefore, the question of reporting on whether physical verification has been carried out at reasonable intervals; procedures of physical verification of inventories were reasonable and adequate; and discrepancies noticed on physical verification were material, does not arise. On the basis of our examination of records of inventories, in our opinion, the Company has maintained proper records of its inventories.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of services, and during the course of our audit, we have not observed any continuing failure to correct major weakness in such internal control system. The activities of the Company do not involve sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, there are no contracts or arrangements that needed to be entered into the Register maintained in pursuance of Section 301 of the Act.

(vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder would apply. Accordingly, the provisions of clause 4 (vi) of the Order are not applicable to the Company.

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

(viii) We have broadly reviewed the cost records 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 Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made 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 statutory dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. As informed to us, the provisions for Employee’s State Insurance and Excise duty were not applicable to the Company during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(c) There were no dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Cess which have not been deposited as on March 31, 2014 on account of disputes.

(x) The Company does not have accumulated losses at the end of the financial year. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Delays in repayment of dues (including interest) to a financial institution aggregating to Rs. 2,545 lakhs, Rs. 1,418 lakhs and Rs. 1,875 lakhs have been regularised within 90 days, 91-150 days and 151-241 days respectively, from due dates. There are no outstanding dues to financial institutions as at March 31, 2014. There were no dues to banks and the Company has not borrowed any sum through issue of debentures.

(xii) According to the information and explanations given 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. Accordingly, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

(xv) 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.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xvii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds of Rs. 4,730.53 lakhs raised on short-term basis have, prima facie, been used during the year for long-term investment / purpose.

(xviii)During the year the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (xviii) of the Order are not applicable to the Company.

(xix) According to the information and explanations given to us, the Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by way of public issues during the year. Accordingly, the provisions of clause 4 (xx) of the Order are not applicable to the Company.

(xxi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.



Samir R. ShahMumbai PartnerMay 15, 2014 Membership No. 101708

24

Standalone Balance Sheet as at 31 March 2014

Rs. in lakhs

Particulars Note no. As at 31 March 2014

As at 31 March 2013

(I) EQUITY AND LIABILITIES1 Shareholders’ funds

(a) Share capital 3 42,801.85 42,801.85 (b) Reserves and surplus 4 2,24,612.48 2,30,033.10

2,67,414.33 2,72,834.95 2 Non-current liabilities

(a) Long-term borrowings 5 24,039.92 23,005.72 (b) Deferred tax liabilities (net) 6 - - (c) Other long term liabilities 7 30,731.74 31,410.03

54,771.66 54,415.75 3 Current liabilities

(a) Short-term borrowing 8 - 3,500.00 (b) Trade payables 9 1,845.12 1,745.48 (c) Other current liabilities 7 4,991.23 47,480.37 (d) Short-term provisions 10 2,434.34 2,418.89

9,270.69 55,144.74 TOTAL 3,31,456.68 3,82,395.44

(II) ASSETS1 Non-current assets

(a) Fixed assets(i) Tangible assets 11 7,347.79 8,117.72

(b) Non-current investments 12 3,14,406.87 3,54,392.00 (c) Long-term loans and advances 13 5,661.85 16,229.04

3,27,416.51 3,78,738.76 2 Current assets

(a) Trade receivables 14 588.93 993.98 (b) Cash and bank balances 15 209.72 433.44 (c) Short-term loans and advances 13 855.62 504.48 (d) Other current assets 16 2,385.90 1,724.78

4,040.17 3,656.68 TOTAL 3,31,456.68 3,82,395.44

See accompanying notes forming part of the financial statements

In terms of our report attached For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants

Samir R. Shah Rajiv Agarwal Shailesh SawaPartner Managing Director Director Finance

T. S. Narayanasami Manoj ContractorDirector Company Secretary

Mumbai, May 15, 2014



25






Standalone Statement of Profit and Loss for the year ended 31 March 2014

Rs. in lakhs

Particulars Note no.For the year ended

31 March 2014For the year ended

31 March 2013IncomeRevenue from operations 17 4,013.43 3,539.51 Other income 18 4,412.87 3,879.25 Total revenue 8,426.30 7,418.76

ExpensesOperating expenses 19 1,512.91 794.28 Employee benefits expense 20 954.69 793.47 Other expenses 21 2,754.02 1,654.29 Total expenses 5,221.62 3,242.04 Profit before finance costs, depreciation expense and tax 3,204.68 4,176.72 Finance costs 22 5,169.79 7,246.59 Depreciation expense 11 758.77 761.82 Loss before tax and exceptional item (2,723.88) (3,831.69)Exceptional itemNet gain on sale of non current investments (refer note no 35) 149.33 - Loss before tax (2,574.55) (3,831.69)Tax expenseCurrent tax 0.50 5.00 Loss for the year (2,575.05) (3,836.69)Earnings per share (face value Rs. 10/- per share) 26Basic and diluted (in Rs.) (0.60) (0.90)


26

Standalone Cash Flow Statement for the year ended 31 March 2014

Rs. in lakhs

Particulars For the year ended

31 March 2014 For the year ended

31 March 2013

I Cash flow from operating activities

Loss before tax (2,574.55) (3,831.69)

Adjustments for :

Depreciation expense 758.77 761.82

Finance costs 5,169.79 7,246.59

Interest income on bank deposits (10.27) (15.49)

Net gain on sale of non-current investments (149.33) -

Dividend from a subsidiary (2,208.22) (2,078.57)

Net unrealised gain on foreign currency translation and transactions (148.16) (54.64)

Amortisation of foreign currency monetary items translation difference account (FCMITDA)

1,589.23 789.31

Operating profit before working capital changes 2,427.26 2,817.33

Changes in working capital

Changes in receivable, loans and advances and other current assets (400.59) (3,253.66)

Changes in payables, other liabilities and provisions (468.01) 19,367.28

Cash generated from operations 1,558.66 18,930.95

Taxes (paid) / refund, net (262.71) 400.74

Net cash generated from operating activities (A) 1,295.95 19,331.69

II Cash flow from investing activities

Payment for acquisition of fixed assets / to capital creditor (568.52) (4,000.03)

Proceeds from sale of non-current investments 40,134.46 12,945.00

Advance received for sale of asset - 2,492.68

Advance received for sale of asset repaid (2,492.68) -

Advance received for sale of investment - 3,110.00

Advance received against sale of investments repaid (3,110.00) -

Investment in shares of subsidiaries - (19,982.80)

Share application money to subsidiaries (3,630.00) (20,579.80)

Refund of share application money given to subsidiaries 14,399.00 9,104.00

Dividend from a subsidiary 2,208.22 2,078.57

Proceeds from maturity of fixed deposits 343.72 171.82

Fixed deposits placed for a period of more than three months (180.25) (266.97)

Interest received on fixed deposits 14.63 11.82

Net cash generated from / (used) in investing activities (B) 47,118.58 (14,915.71)


27

Rs. in lakhs



31 March 2013

III Cash flow from financing activities

Proceeds from issue of Global Depository Securities (net of share issue expenses) - 17,204.35

Repayment of long-term borrowings (37,000.00) (12,500.00)

Repayment of short term borrowing (3,500.00) -

Dividend paid (including corporate dividend tax) (2,139.44) (2,149.97)

Finance costs paid (5,835.34) (6,844.93)

Net cash flow used in financing activities (C) (48,474.78) (4,290.55)

Net (decrease) / increase in cash and cash equivalents for the year (A + B + C) (60.25) 125.43

Cash and cash equivalents at the beginning of the year 178.29 52.86

Cash and cash equivalents at end of the year 118.04 178.29

Notes : Rs. in lakhs

1 Reconciliation between closing cash and cash equivalents and cash and bank balances

For the year ended 31 March 2014


Cash and cash equivalents as per cash flow statement 118.04 178.29

Add : Margin money deposits not considered as cash and cash equivalents as per AS-3

91.68 255.15

Cash and bank balances as per note no. 15 209.72 433.44

2 Cash flow statement has been prepared under the indirect method as set out in Accounting Standard 3 - “Cash Flow Statement” referred to in Section 211 (3C) of the Companies Act, 1956, which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of general circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs and the relevant provisions of the 1956 Act / 2013 Act, as applicable.


Standalone Cash Flow Statement for the year ended 31 March 2014






28

Notes forming part of the financial statements

1. CORPORATE INFORMATION

Essar Ports Limited (“the Company”) is a public limited company domiciled in India and incorporated under the Companies Act, 1956. The Company is engaged in business of providing fleet operating and chartering services.

The Company is listed on BSE Limited and the National Stock Exchange of India Limited (NSE).

The Company 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 104 MTPA across facilities located at Vadinar and Hazira in the State of Gujarat on the west coast of India and Paradip in the State of Odisha on the east coast of India.

The facilities at Vadinar, Hazira and Paradip 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.

The Company through its subsidiaries is in the process of increasing its aggregate ports capacity to 181 MTPA with expansion projects at Hazira, a new port at Salaya in Gujarat, one terminal at Paradip and three iron ore berths at Visakhapatnam. 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.

2. SIGNIFICANT ACCOUNTING POLICIES:

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results

and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Fixed assets and depreciation

Fixed assets are recorded at cost or at revalued amounts less accumulated depreciation and impairment loss, if any. Cost is inclusive of non-refundable duties, taxes and direct costs attributable for purchase of assets.

Depreciation on fleet and plant and machinery, including second hand fleet, is provided under the straight-line method based on a technical evaluation of the economic useful life of respective assets 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

Fleet SLM over balance useful life or 7% whichever is higher

20 years

Plant and machinery

SLM over balance useful life or 4.75% whichever is higher

20 years

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/- each are fully depreciated in the year of capitalisation.

Depreciation on the incremental value of fixed assets upon revaluation is amortised 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.

2.4 Impairment of assets

The Company assesses at 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 (higher of net selling price and value in use) 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, except in case of revalued asset, 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 reflected at the recoverable amount but limited to the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior accounting periods.


29


2.5 Borrowing costs Borrowing costs that are attributable to the acquisition,

construction or development of qualifying assets (i.e. the assets that take substantial period of time to get ready for its intended use) are capitalised as part of the cost of such assets. Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing cost is suspended and charged to the statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.6 Investments Investments are classified into long term and current investments.

Long term investments are carried at cost. Diminution in value of long term investments is provided for when it is considered as being other than temporary in nature. Current investments are carried at the lower of cost and fair value.

Cost of investment include acquisition charges such as brokerage, fees and duties.

2.7 Revenue recognition Revenue from operation represents income from charter hire of

fleet. Revenue on transactions of rendering services is recognised under

the completed service contract method. Performance is regarded as achieved when the services are rendered and no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the services.

2.8 Other income Interest income is recognised on time proportion basis taking into

account the amount outstanding and rate applicable. Dividend income is recognised for when the right to receive is established.

Insurance claims are recorded based on reasonable certainty of their settlement.

2.9 Operating leases Lease expenses and lease income on operating leases are

recognised on a straight line basis over the lease term in the Statement of Profit and Loss.

2.10 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 Ports Limited 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

@ 8.75%, and recognises such provident fund liability, considering fund as the defined benefit plan, based on an independent actuarial valuation carried out at every financial year end.

b) Post-employment benefit plans Contribution to defined contribution retirement benefit

schemes are recognised as expense in the Statement of Profit and Loss, when employees have rendered services entitling them to contributions.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss, for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and is otherwise amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation and is adjusted both for unrecognised past service cost, and for the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme, if lower.

c) Short-term employee benefits The undiscounted amount of short-term employee benefits

expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave, and performance incentives.

d) Long-term employee benefits Compensated absences which are not expected to occur

within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation determined actuarially by using Projected Unit Credit Method at the balance sheet date.

e) Employee Stock Option Scheme Stock options granted to employees under the employees’

stock option scheme (ESOS) are accounted by adopting the intrinsic value method in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on accounting for employee share based payments issued by the ICAI. Accordingly, the excess of market price of the shares over the exercise price is recognised as deferred employee compensation and is charged to the Statement of Profit and Loss on straight-line basis over the vesting period.

The number of options expected to vest is based on the best available estimate and are revised, if necessary, if subsequent information indicates that the number of stock options expected to vest differs from previous estimates.

30


2.11 Foreign currency transactions Foreign currency transactions are accounted at the rate normally

prevailing on the transaction date. Monetary items denominated in foreign currency are translated at the exchange rate prevailing as at the balance sheet date. Exchange differences arising on settlement or conversion of short term foreign currency monetary items are recognised in the Statement of Profit and Loss. Exchange differences relating to long term foreign currency monetary items are accounted as under:

(i) in so far as they relate to the acquisition of a depreciable capital asset added to / deducted from the cost of such capital assets and depreciated over the balance useful life of the asset.

(ii) in other cases, such differences are accumulated in ‘Foreign Currency Monetary Items Translation Difference Account’ and amortised in the Statement of Profit and Loss over the balance life of the long term foreign currency monetary item or 31st March 2020, whichever is earlier.

2.12 Taxation Provision for income tax liability is made as per special provisions

relating to income of shipping companies under the Income Tax Act, 1961 on the basis of deemed tonnage income of the Company whereas income tax on other income is provided as per other provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabosrbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.13 Provisions, contingent liabilities and contingent assets A provision is recognised when there is a present obligation

as a result of a past event and it is probable that an outflow of resources embodying economic benefits 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 likelihood of an outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.

2.14 Cash and cash equivalents (for the purposes of Cash Flow statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.15 Cash flow statement Cash flows are reported using the indirect method, whereby profit

/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.16 Earnings per share Basic earnings per share is computed by dividing the profit / (loss)

after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.17 Operating Cycle Based on the nature of products / activities of the Company and

the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.


31


3 Share capital

(a) Particulars As at 31 March 2014 As at 31 March 2013 Number Rs. in lakhs Number Rs. in lakhs

AuthorisedEquity shares of Rs.10/- each 1,00,00,00,000 1,00,000.00 1,00,00,00,000 1,00,000.00 Redeemable Cumulative Preference Shares of Rs. 100/- each

10,50,000 1,050.00 10,50,000 1,050.00

1,01,050.00 1,01,050.00 Issued and subscribedEquity shares of Rs.10/- each 42,81,34,646 42,813.46 42,81,34,646 42,813.46 Paid upEquity shares of Rs.10/- each (refer note i) 42,78,87,998 42,788.80 42,78,87,998 42,788.80 Forfeited equity shares 2,46,648 13.05 2,46,648 13.05

42,801.85 42,801.85

(i) Of above 17,18,87,182 equity shares were allotted as fully paid up equity shares for consideration other than cash pursuant to the scheme of amalgamation during the financial year 2008-09.

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

Particulars As at 31 March 2014 As at 31 March 2013 Number Rs. in lakhs Number Rs. in lakhs

Equity shares of Rs. 10/- eachAt the beginning of the year 42,78,87,998 42,788.80 41,04,55,552 41,045.56 Add: Issue of shares during the year NIL (previous year 52,666 Global Depositary Securities (GDS)* represented by 1,74,32,446 equity shares)

- - 1,74,32,446 1,743.24

42,78,87,998 42,788.80 42,78,87,998 42,788.80

* Each GDS represents 331 equity shares. During the year, the holders of GDS have converted the GDS into 1,74,32,466 equity shares of the Company on 19 June 2013.

(c) Terms of / rights attached to Equity Shares / Global Depository Securities (GDS) The Company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of equity share is entitled

to 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 holder of equity share is entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

(d) Shares held by holding company, the ultimate holding company, their subsidiaries and associates

Particulars As at 31 March 2014 As at 31 March 2013 Number % Number %

Equity shares of Rs. 10/- eachEssar Shipping & Logistics Limited, Cyprus, the holding company

26,16,97,688 61.16 28,45,03,711 66.49

Essar Global Fund Limited, the ultimate holding company

66 0.00 66 0.00

Essar Projects (India) Limited, subsidiary of the ultimate holding company

5,63,97,000 13.18 5,63,96,995 13.18

Essar Steel India Limited, subsidiary of the ultimate holding company

25,47,223 0.60 25,47,223 0.60

32,06,41,977 74.94 34,34,47,995 80.27

There are no other shareholders holding more than 5% shares in the Company other than as disclosed in (d) above.

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(i) Stock Options :

In the annual general meeting held on September 9, 2011, the shareholders have approved the issue of upto 1% options under the “Essar Ports Employee Stock Options Scheme 2011” to be issued in one or more tranches.

Out of above, 7,40,334 and 12,92,746 options (convertible into equivalent number of equity shares of Rs.10/- each of the Company, in three equal installments i.e. at the end of 3rd / 4th / 5th years from the grant date have been granted to the eligible employees and executive directors of the Company pursuant to Essar Ports Employee Stock Option Scheme 2011 on 28 November 2011 and 22 January 2014 respectively. The exercise period for the options is 7 years from the date of vesting.

These stock options have been granted at an option value of Rs. 71.10 and Rs. 57.75 equity share of the face value of Rs. 10/- each (i.e. the closing price of the equity shares of the Company on 1 December 2011 and 21 January 2014 at the National Stock Exchange of India Limited, being the exchange having the higher quantity of trading of Company’s shares). Out of above, 20,33,080 options were outstanding as on 31 March 2014.

(ii) 5 % Foreign Currency Convertible Bonds are convertible into 2,04,75,463 equity shares (as at 31 March 2013, 2,04,75,463 equity shares) of Rs.10/- each at Rs. 91.70 per share (refer footnote (ii) to note 5).

4 Reserves and Surplus

Rs. in lakhsParticulars As at

31 March 2014 As at

31 March 2013 a. General reserve

Opening balance 70,035.74 64,485.74 Add: Transferred from tonnage tax utilised reserve - 5,550.00 Closing balance 70,035.74 70,035.74

b. Securities premium accountOpening balance 15,461.11 - Add : Premium on issuance of GDS - 15,731.68 Less: Share issue expenses - (270.57)Closing balance 15,461.11 15,461.11

c. Revaluation reserveOpening balance 83.18 94.34 Less: Utilised for set off against depreciation expense (11.16) (11.16)Closing balance 72.02 83.18

d. Tonnage tax reserveOpening balance 500.00 - Add: Transferred from surplus in Statement of Profit and Loss 250.00 500.00 Closing balance 750.00 500.00

e. Tonnage tax utilised reserveOpening balance - 5,550.00 Less: Transferred to general reserve - (5,550.00)Closing balance - -


33



31 March 2014 As at

31 March 2013 f. Foreign currency monetary items translation difference account

Opening balance (2,695.64) (2,191.83)Add: Effect of foreign currency variations during the year (2,284.20) (1,293.12)Less: Amortised during the year 1,589.23 789.31 Closing balance (3,390.61) (2,695.64)

g. Surplus in Statement of Profit and LossOpening balance 1,46,648.71 1,53,222.53 Less: Loss for the year (2,575.05) (3,836.69)Less: Dividends proposed / paid on equity shares (Rs. 0.50 per share (previous year Rs. 0.50 per share))

(2,139.44) (2,226.60)

Less: Tax on dividend - (10.53)Less: Transferred to tonnage tax reserve (250.00) (500.00)Closing balance 1,41,684.22 1,46,648.71

Total 2,24,612.48 2,30,033.10

5 Long-term borrowings Rs. in lakhs

Particulars Non-current Current As at

31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013

SecuredRupee term loan from a financial institution [refer note (i) below]

- 1,250.00 500.00 6,250.00

Total secured loan [A] - 1,250.00 500.00 6,250.00 Unsecured (a) 5 % Foreign currency convertible bonds (FCCB) [refer note (ii) below]

24,039.92 21,755.72 - -

(b) Rupee term loan from others - - - 30,000.00 Total unsecured loan [B] 24,039.92 21,755.72 - 30,000.00 Total [A + B] 24,039.92 23,005.72 500.00 36,250.00 Less: Amount disclosed under the head ‘other current liabilities’ (refer note no 7)

- - (500.00) (36,250.00)

Long term borrowings 24,039.92 23,005.72 - -

i) Secured rupee term loan from a financial institution is repayable on 30 June 2014. The loan is secured against movable fixed assets and all the cash inflows including dividend received / to be received and receivables of the Company.

ii) FCCBs of US$ 1,85,71,428 (Series - B) due on 24 August 2017 and US$ 2,14,28,572 (Series - A) due on 24 August 2015 carry interest @ 5% per annum payable semi annually. The FCCBs are convertible into 2,04,75,463 fully paid equity shares of Rs.10 each of the Company, any time upto the date of maturity, at the option of the FCCBs holders at conversion price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per USD. The FCCBs, if not converted, till the maturity date will be redeemed at par.

34


iii) The classification of loans between current liabilities and non-current liabilities continues based on repayment schedule under respective agreements as no loans have been recalled due to non compliance of conditions under any of the loan agreement. This is in accordance with the guidance issued by the Institute of Chartered Accountants of India on Revised Schedule VI to the Companies Act,1956.

6 Deferred tax liabilities (net) Rs. in lakhs

Particulars As at 31 March 2014

As at 31 March 2013

Tax effect of items constituting deferred tax liabilitiesOn difference between book balance and tax balance of fixed assets 324.53 252.62

(A) 324.53 252.62 Tax effect of items constituting deferred tax assetsUnabsorbed depreciation carried forward 324.53 252.62

(B) 324.53 252.62 Deferred tax liabilities (net) (A-B) - -

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding reversible deferred tax liability on the difference between the book balance and the written down value of fixed assets under income tax.

7 Other long-term / current liabilities Rs. in lakhs


31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 Advances from related parties 30,590.94 31,410.03 2,630.44 8,101.82 Payable in respect of capital goods - - - 568.52 Current maturities of long-term borrowings (refer note no. 5 (i), (ii) and (iii) for details of securities, interest and guarantee)

- - 500.00 36,250.00

Interest accrued but not due on borrowings - - 341.86 1,007.40 Security deposits received 140.80 - 1,067.00 1,435.20 Other liabilities (including statutory dues for service tax, VAT and tax deducted at source)

- - 378.25 117.43

Others current liabilities - - 73.68 - Total 30,731.74 31,410.03 4,991.23 47,480.37

8 Short-term borrowing Rs. in lakhs


As at 31 March 2013

Unsecured 12.5 % Loan repayable on demand-from a related party (refer note no. 31) - 3,500.00 Total - 3,500.00


35


9 Trade payables Rs. in lakhs


As at 31 March 2013

Trade payables - other than acceptances (refer note no. 29) 1,845.12 1,745.48 Total 1,845.12 1,745.48

10 Short-term provisions Rs. in lakhs


As at 31 March 2013

(a) Provision for employee benefits Gratuity (refer note no. 30) 3.96 4.90 Compensated absences (refer note no. 30) 164.88 150.90 (b) Others Provisions for taxation [net of advance tax of Rs. 1,838.58 lakhs (previous year Rs.1,832.88 lakhs)]

126.06 123.65

Proposed dividend on equity shares 2,139.44 2,139.44 Total 2,434.34 2,418.89

11. Tangible assets Rs. in lakhs

Particulars Gross block Accumulated depreciation Net block

As at 01 April 2013

Additions during the

year

As at 31 March

2014

As at 01 April 2013

Depreciation for the year

As at 31 March

2014

As at 31 March

2014

As at 31 March

2013

Fleet 6,222.81 - 6,222.81 2,462.62 439.33 2,901.95 3,320.86 3,760.19

(6,222.81) - (6,222.81) (2,023.29) (439.33) (2,462.62) (3,760.19) (4,199.52)

Plant and equipment 5,002.50 - 5,002.50 644.97 330.60 975.57 4,026.93 4,357.53

(5,002.50) - (5,002.50) (311.32) (333.65) (644.97) (4,357.53) (4,691.18)

Total tangible assets 11,225.31 - 11,225.31 3,107.59 769.93 3,877.52 7,347.79 8,117.72

Previous year (11,225.31) - (11,225.31) (2,334.61) (772.98) (3,107.59) (8,117.72)

Note:

a. Fleet were revalued on 31 March 2008 on the basis of valuation done by an approved valuer based on then prevailing comparable market rates. The net difference between book value and revalued value as on 31 March 2008 amounting to Rs. 129.62 lakhs had been added to book value of fleet and corresponding credit was given to revaluation reserve. Out of depreciation for the year, a sum of Rs.11.16 lakhs (previous year Rs. 11.16 lakhs) to the extent it is charged on the increased value has been recouped from revaluation reserve and balance depreciation of Rs.758.77 lakhs (previous year Rs. 761.82 lakhs) has been debited to the Statement of Profit and Loss.

b. Fleet have been hypothecated against secured non convertible debenture issued by Essar Shipping Limited (fellow subsidiary).

c. Previous year figures are disclosed in bracket.

36


12 Non-current investments Rs. in lakhs


As at 31 March 2013

Trade investments (valued at cost)(a) Investments in equity shares (unquoted, fully paid up) Investment in subsidiaries 45,000, equity shares of Rs.10/- each of Essar Paradip Terminals Limited 4.50 4.50 37,00,000, equity shares of Rs. 10/- each of Essar Bulk Terminal Limited 373.66 373.66 7,86,54,397, equity shares of Rs 10/- each of Vadinar Ports & Terminals Limited 7,527.87 7,527.87 1,04,61,42,000, equity shares of Rs 10/- each of Vadinar Oil Terminal Limited 1,22,921.01 1,22,921.01 30,04,875, equity shares of Rs 10/- each of Essar Bulk Terminal (Salaya)

Limited 320.04 320.04

[A] 1,31,147.08 1,31,147.08 (b) Investments in preference shares (unquoted, fully paid up)

Investment in subsidiaries 1,57,30,000 (previous year 3,29,30,000), 0.01% optionally convertible redeemable cumulative preference share of Rs.10/- each of Essar Bulk Terminal Limited (refer note no 35)

27,488.91 57,546.72

7,90,22,903, 0.01% fully convertible cumulative preference shares of Rs 10/- each of Essar Bulk Terminal Limited

1,16,136.22 1,16,136.22

12,99,84,850, 0.01% compulsorily convertible cumulative participating preference shares of Rs 10/- each of Essar Bulk Terminal Limited

28,303.72 28,303.72

10,50,73,630 (previous year 20,50,73,630), 0.01% compulsorily convertible cumulative participating preference shares of Rs 10/- each of Essar Bulk Terminal (Salaya) Limited (refer note no. 35)

10,430.94 20,358.26

90,00,000, 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Paradip Terminals Limited

900.00 900.00

[B] 1,83,259.79 2,23,244.92 Total [A+B] 3,14,406.87 3,54,392.00

Notes :-

i. Aggregate cost of unquoted investments as at 31 March 2014 Rs. 3,14,406.87 lakhs (Previous year Rs. 3,54,392.00 lakhs).

ii. Following investments are in process of being registered in the name of the Company.

Particulars No of sharesEquity shares of Rs. 10/- each of Essar Bulk Terminal Limited 36,99,993

Equity shares of Rs. 10/- each of Vadinar Oil Terminal Limited 1,04,61,41,940

Equity shares of Rs. 10/- each of Essar Bulk Terminal (Salaya) Limited 30,04,815

0.01% optionally convertible redeemable cumulative preference shares of Rs. 10/- each of Essar Bulk Terminal Limited 3,29,30,000

0.01% fully convertible cumulative preference shares of Rs. 10/- each of Essar Bulk Terminal Limited 6,06,91,150

0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal Limited

9,61,88,850

0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal (Salaya) Limited

9,58,23,630


37


13 Long-term / short-term loans and advances Rs. in lakhs


31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 Unsecured, considered goodSecurity deposit to a related party (refer note no. 31) 176.00 75.00 - - Security deposit to others - - 540.00 - Advances recoverable in cash or kind or for value to be received

- - 21.30 9.01

Advances towards share application money to subsidiaries (refer note no. 31)

806.80 11,575.80 - -

Advance income-tax and tax deducted at source [net of provision for taxation of Rs. 5.50 lakhs (previous year Rs. 5 lakhs)]

1,673.11 1,408.49 - -

Prepaid expenses 6.63 78.35 62.91 309.04 Service tax receivable 2,999.31 3,091.40 202.05 153.84 Cenvat receivable - - 29.36 32.59 Total 5,661.85 16,229.04 855.62 504.48

14 Trade receivables Rs. in lakhs


As at 31 March 2013

Unsecured, considered goodTrade receivables outstanding for a period exceeding six months from the date they were due for payment

588.93 765.78

Other trade receivables - 228.20 Total 588.93 993.98

15 Cash and bank balances Rs. in lakhs


As at 31 March 2013

A. Cash and cash equivalentsBalances with banks in current accounts 118.04 178.29

[A] 118.04 178.29 B. Other bank balancesMargin money deposits (lien against facility of bank guarantee) 91.68 255.15

[B] 91.68 255.15 Total [A+B] 209.72 433.44

38


16 Other current assets Rs. in lakhs


As at 31 March 2013

Interest accrued on fixed deposits 0.04 4.40 Receivables for management services and other income (refer note no. 31) 2,385.86 1,720.38 Total 2,385.90 1,724.78

17 Revenue from operations Rs. in lakhs

Particulars For the year ended 31 March 2014


Sale of servicesFleet operating and chartering earnings 4,013.43 3,539.51 Total 4,013.43 3,539.51

18 Other income Rs. in lakhs



Interest income on bank deposits 10.27 15.49 Interest income on overdue receivable 181.54 142.21 Management fee income (net of expenses of Rs. 122.14 lakhs (previous year Rs. 306.78 lakhs))

1,220.76 1,252.35

Dividend from a subsidiary 2,208.22 2,078.57 Sub branding income 356.38 188.11 Sub lease income 141.37 70.69 Facility charges income 146.17 77.19 Net gain on foreign currency translation and transactions 148.16 54.64 Total 4,412.87 3,879.25

19 Operating expenses Rs. in lakhs



Repairs and maintenance - fleet 81.84 48.59

Consumption of fuel 165.96 43.28

Hire charges 99.65 149.44

Manning management expenses 356.09 384.63

Commission, brokerage and agency fees 443.03 116.12

Dry docking expenses 316.57 6.48

Insurance, protection and indemnity club fees 49.77 45.74

Total 1,512.91 794.28


39


20 Employee benefits expense Rs. in lakhs



Salaries, wages and bonus 862.66 718.21 Contribution to staff provident and other funds (refer note no. 30) 47.51 43.55 Staff welfare 44.52 31.71 Total 954.69 793.47

21 Other expenses Rs. in lakhs



Repairs and maintenance - others - 13.64 Legal and professional fees 275.43 306.33 Licence fees 356.38 192.22 Travelling 57.29 56.03 Auditors’ remuneration (refer note below) 31.74 32.82 Rent 294.34 143.77 Amortisation of foreign currency monetary items translation difference account (FCMITDA) (refer note no. 4 (f))

1,589.23 789.31

Others 149.61 120.17 Total 2,754.02 1,654.29

Rs. in lakhs

Payments to the statutory auditors comprise (net of service tax): For the year ended 31 March 2014


As auditors 29.00 21.00 For other services 2.20 10.77 Reimbursement of expenses 0.54 1.05 Total 31.74 32.82

22 Finance costs Rs. in lakhs



Interest expense- on loan from a financial institution and others 3,231.04 5,188.92 - on foreign currency convertible bonds 1,677.88 1,225.84 - on short-term borrowing 43.93 437.50 Other finance charges (mainly include amortisation of upfront fees) 216.94 394.33 Total 5,169.79 7,246.59

40


23 Contingent liabilities Rs. in lakhs

Particulars As at 31 March 2014 As at 31 March 2013Guarantees given on behalf of subsidiaries against borrowings 2,07,686.00 1,54,460.00

Total 2,09,286.00 1,56,060.00

24 Commitments

As per the borrowing agreements of subsidiaries with banks and financial institutions, the Company has commitment to invest Rs.12,108.94 lakhs (previous year Rs. 29,897.15 lakhs) into the projects of subsidiaries. Under the agreements with lenders, the Company has commited not to dilute its investments in any of the port and terminal project developed by its subsidiaries below 51% till maturity of the loan.

25 Details of leasing arrangements - assets taken on operating leases

a. The Company has entered into a non-cancellable operating lease agreement for office premises in financial year 2012-13 for the period of 5 years with monthly lease rental of Rs. 11.78 lakhs. Future lease rental charges payable by the Company are as under.

Rs. in lakhs

Particulars As at 31 March 2014 As at 31 March 2013a. Payable not later than 1 year 141.37 141.37

b. Payable later than 1 year but not later than 5 years 353.43 494.80

Total 494.80 636.17

b. The Company expects to receive future minimum sublease payments of Rs. 494.80 lakhs (previous year Rs. 636.17 lakhs) as on 31 March 2014. A sum of Rs.141.37 lakhs (previous year Rs. 70.69 lakhs) has been recognised in Statement of Profit and Loss as rent and sublease income during the year.

26 Earnings per share Rs. in lakhs

Particulars Year ended 31 March 2014

Year ended 31 March 2013

Net loss for the year (Rs. in lakhs) (2,575.05) (3,836.69)

Equity shares at the beginning of the year (nos.) 42,78,87,998 41,04,55,552

Equity shares issued during the year (nos.) - 1,74,32,446.00

Equity shares at the end of the year (nos.) 42,78,87,998 42,78,87,998Weighted average number of equity shares for the purpose of calculating basic earnings per share (nos.)

42,78,87,998 42,49,82,590

Weighted average number of equity shares for the purpose of calculating diluted earnings per share (nos.) *

42,78,87,998 42,49,82,590

Earnings per share-basic and diluted (face value of Rs.10/- each) (in Rs.) (0.60) (0.90)

* Equity shares to be issued upon conversion of FCCB and exercise of Employee Stock Option Plan have not been considered for purpose of calculation of the weighted average number of equity shares for dilution purposes as they are anti-dilutive.


41


27 Derivative instruments and unhedged foreign currency exposures

A) Unhedged foreign currency exposures

The year end foreign currency (FC) exposures that have not been hedged by a derivative instrument or otherwise are given below:

(a) Amounts receivable in foreign currency on account of the following:

Particulars As at 31 March 2014 As at 31 March 2013Rs. in lakhs FC in lakhs Rs. in lakhs FC in lakhs

Other assets (rendering of services) 1,592.95 USD 26.51 1,313.82 USD 24.16

Other assets (interest receivable) 335.65 USD 5.58 142.21 USD 2.61

Bank balances 0.70 USD 0.01 6.53 USD 0.12

(b) Amounts payable in foreign currency on account of the following:

Particulars As at 31 March 2014 As at 31 March 2013Rs. in lakhs FC in lakhs Rs. in lakhs FC in lakhs

Foreign currency convertible bonds (including interest accrued but not due)

24,217.82 USD 402.96 21,856.44 USD 401.85

Trade payables NIL NIL 170.75 EUR 2.32 B) There were no forward / option contracts entered into by the Company during the current or previous financial year to hedge its foreign

currency exposures.

28 The Company has one primary business segment of fleet operations and chartering and only one geographical segment i.e. India.

29 Dues to micro, small and medium enterprises

The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 and hence disclosure relating to amount unpaid at the year end together with interest paid / payable under this Act have not been given.

30 Employee benefits :

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

I. Defined contribution plan

The Company has recognised the following amounts in the Statement of Profit and Loss during the year:

Rs. in lakhs



Employer’s contribution to superannuation fund 2.43 1.91

The above amount is included in ‘contribution to staff provident and other funds’ (note 20).

II. Defined benefit plansa. Provident fund

b. Gratuity

c. Compensated absences (CA)

42


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

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

Particulars Provident fund (funded) Gratuity-shore officers (funded) CA (non funded)As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Present value of defined benefit obligations - opening balance

396.50 268.46 47.73 35.82 150.90 136.91

Current service cost 30.08 27.23 0.75 1.39 3.73 4.40 Current service contribution- employee

40.08 41.77 - - - -

Interest cost 41.40 25.79 3.77 3.02 4.74 3.91 Past service cost - - - - - - Acquisitions 14.02 33.25 - - - - Benefits paid (20.00) - - (0.51) - - Actuarial (gain) / loss on obligations 0.78 - 0.68 8.01 5.51 5.68 Present value of defined benefit obligations - closing balance

502.86 396.50 52.93 47.73 164.88 150.90

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


31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Fair value of plan assets - opening balance

396.50 268.46 42.83 29.39 - -

Expected return on plan assets - - 3.71 2.56 - - Actual return on plan assets 42.18 25.79 - - - - Acquisition adjustment - - - - - - Actuarial gains / (losses) - - 0.46 9.44 - - Contributions by the employer / employees

84.18 102.25 1.97 1.95 - -

Benefits paid (20.00) - - (0.51) - - Fair value of plan assets - closing balance

502.86 396.50 48.97 42.83 - -

(C) Amount recognised in Balance Sheet: Rs. in lakhs


31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Present value of defined benefit obligations

502.86 396.50 52.93 47.73 164.88 150.90

Fair value of plan assets at the end of the year

502.86 396.50 48.97 42.83 - -

Liability / (asset) recognised in the Balance Sheet (note 10)

- - 3.96 4.90 164.88 150.90


43


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

Rs. in lakhs


31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Current service cost 30.08 27.23 0.75 1.39 3.73 4.40 Interest cost 41.40 25.79 3.77 3.02 4.74 3.91 Expected return on plan assets (42.18) (25.79) (3.71) (2.56) - - Past service cost - - - - - - Net actuarial (gain) / loss recognised in the period

0.78 - 0.21 (1.43) 5.51 5.68

Total expenses recognised in the Statement of Profit and Loss (Refer note 20).

30.08 27.23 1.02 0.42 13.98 13.99

(E) Experience history: Rs. in lakhs

Particulars Provident Fund (funded)As at

31 March 2014As at

31 March 2013As at

31 March 2012As at

31 March 2011As at

31 March 2010Defined benefit obligations at the end of the year

(502.86) (396.50) (268.46) (1408.24) (1669.00)

Plan assets at the end of the year 502.86 396.50 268.46 1408.24 1669.00Funded status - - - - - Experience gain / (loss) adjustments on plan liabilities

- - - - -

Experience gain / (loss) adjustments on plan assets

- - - - -

Actuarial gain / (loss) due to change on assumptions

- - - - -

Rs. in lakhs

Particulars Gratuity-shore officers (funded)As at

31 March 2014As at

31 March 2013As at

31 March 2012As at

31 March 2011As at

31 March 2010Defined benefit obligations at the end of the year

(52.93) (47.73) (35.82) (30.00) (79.00)

Plan assets at the end of the year 48.97 42.83 29.38 25.00 79.00 Funded status (3.96) (4.90) (6.44) 5.00 - Experience gain / (loss) adjustments on plan liabilities

(2.76) (7.20) 0.89 (21.00) (29.00)


0.46 9.44 0.04 1.00 -


2.09 (0.80) 0.74 0.39 7.00

44


Rs. in lakhs

Particulars CA (non funded)As at

31 March 2014As at

31 March 2013As at

31 March 2012As at

31 March 2011As at

31 March 2010Defined benefit obligation at the end of the year

(164.88) (150.90) (46.02) (53.00) (116.00)

Plan assets at the end of the year - - - - - Funded status (164.88) (150.90) (46.02) (53.00) (116.00)Experience gain / (loss) adjustments on plan liabilities

(9.50) (4.09) 12.41 (45.00) (91.00)


- - - - -


4.73 (1.59) 12.41 - 36.00

(F) Category of plan assets:

Percentage of each catagory of plan assets to total fair value of plan assets

Provident fund (funded) Gratuity-shore officers (funded) CA (non funded)As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Administered by Life Insurance Corporation of India (LIC)*

- - 100% 100% - -

Government of India security 25% 25% - - - -

Public sector bonds / TDRs 60% 60% - - - -

State government securities 15% 15% - - - -

*The Company is unable to obtain the details of plan assets from LIC and hence the disclosure thereof is not made.

(G) Actuarial assumptionsIn 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:


31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Discount rate (per annum) 9.20% 7.90% 9.20% 7.90% 9.20% 7.90%

Rate of return on plan assets (for funded scheme)

8.75% 8.60% 8.50% 8.50% 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 India Assured Lives Mortality (2006-08) (modified) Ultimate (the Life Corporation (1994-96) Mortality table for the year ended on March 31, 2013)


45


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) The expected contribution to be made by the Company for funding its liability for gratuity during the financial year 2014 -15 will be Rs. 2.00 lakhs and actual will be made as per demand raised by the fund administrator Life Insurance Corporation of India.

v) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

vi) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion, supply and demand and other relevant factors.

vii) The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method.

viii) The employer managed provident fund is considered as defined benefit plan.

ix) Liability on account of long term compensated absences has been actuarially valued as per Projected Unit Credit Method.

x) Short term compensated absences have been provided on actual basis.

31. Related party relationships, transactions and balancesa. Holding companies : i. Essar Global Fund Limited (Formerly known as 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 Limitediii. Vadinar Ports & Terminals Limited iv. Essar Bulk Terminal (Salaya) Limitedv. Essar Bulk Terminal Paradip Limitedvi. Essar Paradip Terminals Limited vii. Essar Dredging Limited ( w.e.f 1 October 2012)viii. Essar Vizag Terminals Limited

c. Key management personnel :i. Rajiv Agarwal, CEO & Managing Director ii. Kamala Kant Sinha, CEO iii. Shailesh Sawa, Director Finance

d. Fellow subsidiaries where there have been transactions:i. Aegis Limitedii. Essar Africa Holdings Limitediii. Essar Logistics Limitediv. Essar Shipping Limitedv. Essar Oil Limitedvi. Essar Power Gujarat Limitedvii. Essar Offshore Subsea Limitedviii. Equinox Business Parks Private Limited

46


e. The details of transactions with related parties during the year Rs. in lakhs

Nature of transactions Holding companies Subsidiaries Fellow subsidiaries Total









Fleet operating and chartering earnings

Essar Bulk Terminal Limited

- - 1,606.50 1,606.50 - - 1,606.50 1,606.50

Vadinar Oil Terminal Limited

- - 1,040.25 1,040.25 - - 1,040.25 1,040.25

Essar Bulk Terminal (Salaya) Limited

- - - 545.17 - - - 545.17

Essar Oil Limited - - - - 484.78 - 484.78 - Essar Power Gujarat Limited

- - - - 881.90 - 881.90 -

Total - - 2,646.75 3,191.92 1,366.68 - 4,013.43 3,191.92 Dividend from subsidiaryEssar Bulk Terminal Limited

- - 2,208.22 2,078.57 - - 2,208.22 2,078.57

Interest income on overdue receivableEssar Africa Holdings Limited

- - - - 181.54 142.21 181.54 142.21

Other income(Management fees, sub-lease and sub-license)Vadinar Oil Terminal Limited

- - 242.92 184.25 - - 242.92 184.25

Vadinar Ports & Terminals Limited

- - 497.49 442.41 - - 497.49 442.41


- - 654.99 535.06 - - 654.99 535.06

Essar Bulk Terminal Paradip Limited

- - 193.01 141.68 - - 193.01 141.68


- - 255.51 228.49 - - 255.51 228.49

Essar Africa Holdings Limited

- - - - 142.91 461.14 142.91 461.14

Total - - 1,843.92 1,531.89 142.91 461.14 1,986.83 1,993.03

Repairs and Maintenance fleetEssar Bulk Terminal Limited

- - 54.43 25.77 - - 54.43 25.77


47











Manning management expensesEssar Bulk Terminal Limited

- - 184.33 108.83 - - 184.33 108.83

Hire chargesEssar Shipping Limited - - - - 99.65 107.31 99.65 107.31 Essar Bulk Terminal Limited

- - - - - 42.14 - 42.14

Total - - - - 99.65 149.45 99.65 149.45 Dry docking expensesEssar Offshore Subsea Limited

- - - - 103.10 - 103.10 -

Commission, brokerage and agency feesEssar Bulk Terminal (Salaya) Limited

- - 375.00 - - - 375.00 -

Essar Shipping Limited - - - - 24.00 28.33 24.00 28.33 Essar Bulk Terminal Limited

23.17 82.83 - - 23.17 82.83

Total - - 398.17 82.83 24.00 28.33 422.17 111.16 Legal and professional feesAegis Limited - - - - 10.46 10.65 10.46 10.65 Essar Bulk Terminal Limited

- - 117.84 245.68 - - 117.84 245.68


- - 4.30 61.10 - - 4.30 61.10

Total - - 122.14 306.78 10.46 10.65 132.60 317.43 Other expenses - rentEquinox Business Parks Private Limited

- - - - 287.54 143.77 287.54 143.77

Interest on short-term borrowingVadinar Ports & Terminals Limited

- - 43.93 437.50 - - 43.93 437.50

Repayment of short term borrowing with interest

Rs. in lakhs

48











Sale of non-current investments of subsidiariesEssar Bulk Terminal Limited

- - - 12,945.00 - - - 12,945.00


- - 40,134.46 - - - 40,134.46 -

Total - - 40,134.46 12,945.00 - - 40,134.46 12,945.00 Advances towards share application money to subsidiariesEssar Bulk Terminal (Salaya) Limited

- - 2,066.00 8,558.00 - - 2,066.00 8,558.00

Essar Paradip Terminals Limited

- - 120.00 87.00 - - 120.00 87.00

Essar Bulk Terminals Paradip Limited

- - 1,134.00 6,470.80 - - 1,134.00 6,470.80


- - - 5,464.00 - - - 5,464.00

Essar Vizag Terminals Limited

- - 310.00 - - - 310.00 -

Total - - 3,630.00 20,579.80 - - 3,630.00 20,579.80 Refund of advances towards share application money from subsidiariesEssar Bulk Terminal (Salaya) Limited

- - 8,199.00 2,200.00 - - 8,199.00 2,200.00


- - 40.00 - - - 40.00 -

Essar Bulk Terminals Paradip Limited

- - 5,900.00 1,700.00 - - 5,900.00 1,700.00


- - 260.00 5,204.00 - - 260.00 5,204.00

Total - - 14,399.00 9,104.00 - - 14,399.00 9,104.00 Investment in shares of subsidiariesEssar Bulk Terminal Paradip Limited

- - - 1,395.00 - - - 1,395.00

Security deposits received

Rs. in lakhs


49












- - 135.00 17.60 - - 135.00 17.60


- - 140.40 700.00 - - 140.40 700.00


- - 35.20 700.00 - - 35.20 700.00

Total - - 472.60 1,435.20 - - 472.60 1,435.20 Security deposits refundedEssar Bulk Terminal (Salaya) Limited

- - 700.00 - - - 700.00 -

Security deposit givenEquinox Business Parks Private Limited

- - - - 101.00 75.00 101.00 75.00

Advances from related partiesAdvance received for sale of investment Essar Bulk Terminal Limited

- - - 3,110.00 - - - 3,110.00

Advance received for sale of investment refundedEssar Bulk Terminal Limited

- - 3,110.00 - - - 3,110.00 -

Advance received for sale of assetVadinar Ports & Terminals Limited

- - - 2,492.68 - - - 2,492.68

Advance received for sale of asset refundedVadinar Ports & Terminals Limited

- - 2,492.68 - - - 2,492.68 -

Advances received for services to be renderedVadinar Oil Terminal Limited

- - - 14,176.98 - - - 14,176.98


- - - 3,229.90 - - - 3,229.90


- - - 1,909.36 - - - 1,909.36

Total - - - 19,316.24 - - - 19,316.24

Rs. in lakhs

50












- - 73.68 - - - 73.68 -

Guarantee given on behalf of other


- - 30,000.00 - - - 30,000.00 -


- - 16,226.00 - - - 16,226.00 -


- - 7,000.00 - - - 7,000.00 -

Total - - 53,226.00 - - - 53,226.00 -

Rs. in lakhs

f) The details of transactions with key management personnel during the year. Rs. in lakhs

Nature of transactions Year ended 31 March 14


Remuneration*Rajiv Agarwal 338.83 231.89 Kamala Kant Sinha 137.57 142.52 Shailesh Sawa 175.74 156.86 Total 652.14 531.27

*Does not include the amount payable towards gratuity and compensated absences by the Company as the same is calculated for the Company as whole on actuarial basis.

g) Balances with related parties at the year end. Rs. in lakhs

Nature of balances Holding companies Subsidiaries Fellow subsidiaries Total Year ended 31 March 14








Advances from related partiesAdvance received for sale of investmentEssar Bulk Terminal Limited

- - - 3,110.00 - - - 3,110.00

Advance received for sale of assetVadinar Ports & Terminals Limited

- - - 2,492.68 - - - 2,492.68


51

Notes forming part of the financial statementsRs. in lakhs









Advances received for services to be renderedVadinar Oil Terminal Limited

- - 27,071.86 27,617.11 - - 27,071.86 27,617.11


- - 3,109.59 3,556.47 - - 3,109.59 3,556.47


- - 2,908.64 2,735.58 - - 2,908.64 2,735.58

Essar Power Gujarat Limited

- - - - 131.30 - 131.30 -

Total - - 33,090.08 39,511.85 131.30 - 33,221.38 39,511.85 Payable in respect of capital goodsEssar Logistics Limited - - - - - 568.52 - 568.52 Interest accrued but not due on short-term borrowingVadinar Ports & Terminals Limited

- - - 947.60 - - - 947.60

Security deposits receivedEssar Bulk Terminal Limited

- - 840.40 700.00 - - 840.40 700.00


- - 179.60 17.60 - - 179.60 17.60


- - 152.60 17.60 - - 152.60 17.60


- - 35.20 700.00 - - 35.20 700.00

Total - - 1,207.80 1,435.20 - - 1,207.80 1,435.20 Short-term borrowingVadinar Ports & Terminals Limited

- - - 3,500.00 - - - 3,500.00

Trade payablesAegis Limited - - - - 3.70 1.52 3.70 1.52 Essar Shipping Limited - - - - 147.07 234.98 147.07 234.98 Equinox Business Parks Private Limited

- - - - 58.50 147.17 58.50 147.17

Essar Offshore Subsea Limited

- - - - 18.78 - 18.78 -


- - 310.98 310.98 - - 310.98 310.98


- - - 65.41 - - - 65.41

Total - - 310.97 376.39 228.05 383.68 539.03 760.07

52










Other liabilitiesVadinar Oil Terminal Limited

- - 73.68 - - - 73.68 -

Security deposit givenEquinox Business Parks Private Limited

- - - - 176.00 75.00 176.00 75.00

Advances towards share application money to subsidiariesVadinar Ports & Terminals Limited

- - - 260.00 - - - 260.00


- - 225.00 6,358.00 - - 225.00 6,358.00


- - 267.00 187.00 - - 267.00 187.00


- - 4.80 4,770.80 - - 4.80 4,770.80


- - 310.00 - 310.00 -

Total - - 806.80 11,575.80 - - 806.80 11,575.80 Trade receivablesEssar Bulk Terminal (Salaya) Limited

- - - 156.36 - - - 156.36


- - - 71.84 - - - 71.84

Total - - - 228.20 - - - 228.20 Other current assetsVadinar Oil Terminal Limited

- - 86.06 57.94 - - 86.06 57.94


- - 167.87 23.37 - - 167.87 23.37


- - 132.42 144.14 - - 132.42 144.14


- - 70.90 38.91 - - 70.90 38.91


- - - - 1,928.61 1,456.02 1,928.61 1,456.02

Total - - 457.25 264.36 1,928.61 1,456.02 2,385.86 1,720.38 Guarantee given by others on behalf of the CompanyEssar Shipping & Logistics Limited

- 30,000.00 - - - - - 30,000.00

Guarantees given on behalf of others

Rs. in lakhs


53











- - 10,500.00 10,500.00 - - 10,500.00 10,500.00


- - 76,686.00 60,460.00 - - 76,686.00 60,460.00


- - 47,500.00 17,500.00 - - 47,500.00 17,500.00


- - 25,000.00 25,000.00 - - 25,000.00 25,000.00


- - 48,000.00 41,000.00 - - 48,000.00 41,000.00

Total - - 2,07,686.00 1,54,460.00 - - 2,07,686.00 1,54,460.00

32 Remittance in foreign currency on account of dividend

The Company has paid dividend in respect of shares held by Non-residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the dividend has been paid. The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is given herein below :

Particulars 2013-14 (final dividend)

2012-13 (final dividend)

Number of non-resident shareholders 388 394

Number of equity shares held by them 27,92,48,558 28,46,18,114

Amount of dividend paid (Rs. in lakhs) 1,396.24 1,423.09

Year to which dividend relates 2012-13 2011-12

33 Going concern

As on March 31, 2014, the Company’s current liabilities exceeded its current assets by Rs. 5,230.52 lakhs. The management has plans of addressing this deficit from internal accruals and certain other transactions for which no material uncertainty exists. Accordingly, the financial statements have been prepared on a going concern basis.

34 In view of exemption granted by Central Government for shipping companies vide press note no. 2/2011 dated 08.02.2011, information required under sub-clauses (a), (b), (c) and (e) of paragraph 5 (VIII) of part II of Revised Scheduled VI to the Companies Act, 1956, is not given.

35 During the year, the Company has sold 10,00,00,000, 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal (Salaya) Limited and 1,72,00,000, 0.01% optionally convertible redeemable cumulative preference shares of Rs.10/- each of Essar Bulk Terminal Limited for a consideration of Rs. 30,134.40 lakhs and recognised gain of Rs. 149.33 lakhs in the Statement of Profit and Loss.

36 The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

Rs. in lakhs

For and on behalf of the Board of Directors

Rajiv Agarwal Shailesh SawaManaging Director Director Finance



54

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14


55

INDEPENDENT CONSOLIDATED AUDITORS’ REPORTTO THE BOARD OF DIRECTORS OF

ESSAR PORTS LIMITED

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of ESSAR PORTS LIMITED (“the Company”) and its subsidiaries (the Company and its subsidiaries constitute “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial StatementsThe Company’s Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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

explanations given to us, and based on the consideration of the report of the other auditor on the financial statements / financial information of a subsidiary, referred to below in the Other Matter paragraph, the aforesaid consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the Consolidated Balance Sheet, of the state of

affairs of the Group as at March 31, 2014;(b) in the case of the Consolidated Statement of Profit and Loss, of

the profit of the Group for the year ended on that date; and(c) in the case of the Consolidated Cash Flow Statement, of the cash

flows of the Group for the year ended on that date.

Emphasis of MatterWe draw attention to:1. Note 5(c)(d) to the consolidated financial statements detailing the

recognition, measurement and presentation of certain borrowings covered by the Master Restructuring Agreement as per the accounting policy consistently followed by the Group in absence of specific guidance under the Accounting Standards notified under the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

2. Note 12(B) of the consolidated financial statements regarding assessment of recoverable amount of 20 MMTPA Dry Bulk Terminal project at Salaya, Gujarat in terms of Accounting Standard (AS) 28, Impairment of Assets, and the basis for not recognising impairment.

Our opinion is not qualified in respect of these matters.

Other MatterWe did not audit the financial statements of a subsidiary, whose financial statements reflect total assets (net) of Rs. 2.79 lakhs as at March 31, 2014, total revenues of Rs. Nil and net cash outflow amounting to Rs. 0.01 lakhs for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditor whose report has been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of this subsidiary, is based solely on the report of the other auditor.Our opinion is not qualified in respect of this matter.



Samir R. ShahMumbai, PartnerMay 15, 2014 Membership No. 101708

56

Consolidated Balance Sheet as at 31 March 2014

Rs. in lakhs

Particulars Note no.

As at 31 March 2014

As at 31 March 2013

(I) EQUITY AND LIABILITIES1 Shareholders’ funds

(a) Share capital 3 42,801.85 42,801.85 (b) Reserves and surplus 4 2,65,700.00 2,29,898.52

3,08,501.85 2,72,700.37 2 Minority interest 2,489.86 1,993.47 3 Non-current liabilities

(a) Long-term borrowings 5 5,48,210.76 5,03,052.60 (b) Deferred tax liabilities (net) 6 A 15,045.08 9,677.66 (c) Other long-term liabilities 7 30,532.32 17,203.09

5,93,788.16 5,29,933.35 4 Current liabilities

(a) Short-term borrowings 9 5,224.83 1,964.33 (b) Trade payables 10 15,366.00 10,239.27 (c) Other current liabilities 7 70,292.00 1,34,009.65 (d) Short-term provisions 8 8,397.70 5,160.66

99,280.53 1,51,373.91 TOTAL 10,04,060.40 9,56,001.10

(II) ASSETS1 Non-current assets

(a) Fixed assets(i) Tangible assets 11 5,28,475.42 4,77,888.16 (ii) Intangible assets 11 2.91 4.38 (iii) Capital work-in-progress 12 1,58,898.59 1,98,438.78

6,87,376.92 6,76,331.32 (b) Goodwill on consolidation 1,61,328.43 1,61,328.43 (c) Non-current investments 13 104.51 104.51 (d) Deferred tax assets (net) 6 B 13,320.77 13,997.14 (e) Long-term loans and advances 14 45,814.52 34,995.75 (f) Other non-current assets 15 1,816.91 2,555.88

9,09,762.06 8,89,313.03 2 Current assets

(a) Current investments 13 2.68 - (b) Inventories 16 849.98 748.78 (c) Trade receivables 17 47,658.15 21,104.47 (d) Cash and bank balances 18 2,417.21 5,306.05 (e) Short-term loans and advances 14 38,300.28 34,717.79 (f) Other current assets 15 5,070.04 4,810.98

94,298.34 66,688.07 TOTAL 10,04,060.40 9,56,001.10

See accompanying notes forming part of the consolidated financial statements







57

Consolidated Statement of Profit and Loss for the year ended 31 March 2014

Rs. in lakhs

ParticularsNote no.



IncomeRevenue from operations 19 2,12,437.44 1,42,152.97

Other income 20 9,051.29 2,706.21

Total revenue 2,21,488.73 1,44,859.18 ExpensesPurchse of traded goods 21 57,745.42 -

Operating expenses 22 23,650.83 23,170.82

Employee benefits expense 23 3,250.95 2,511.80

Other expenses 24 4,128.98 2,389.39

Total expenses 88,776.18 28,072.01 Profit before finance costs, tax, depreciation and amortisation 1,32,712.55 1,16,787.17

Finance costs 25 59,908.79 52,477.27

Depreciation and amortisation expenses 11 27,720.88 24,402.96

Profit before tax 45,082.88 39,906.94 Tax expensesCurrent tax 9,372.72 8,425.33

MAT credit entitlement (9,372.22) (5,888.27)

Deferred tax charge, (net) 6,043.79 3,892.26

Tax adjustment for earlier years 296.24 17.65

Profit after tax 38,742.35 33,459.97 Less: Share of minority interest (profit) (368.55) (305.33)

Profit for the year 38,373.80 33,154.64

Earnings per share: (face value of Rs. 10/- each ) 31

Basic (in Rs.) 8.97 7.80

Diluted (in Rs.) 8.82 7.53







58

Consolidated Cash Flow Statement for the year ended 31 March 2014

Rs. in lakhs



31 March 2013

A Cash flow from operating activities

Profit before tax 45,082.88 39,906.94

Adjustments for :

Depreciation and amortisation expenses 27,720.88 24,402.96

Finance costs 59,908.79 52,477.27

Interest income

- Interest income on bank deposits (239.44) (242.28)

- Interest income on loans and advances (3,792.32) (1,982.14)

- Interest income on income tax refund (15.51) (12.62)

Amortisation of share issue expenses 73.20 64.31

Net gain on sale of current investments (3.74) (54.98)

Net gain on foreign currency translation and transactions (148.16) (54.64)

Cash flow from operations before working capital changes 1,28,586.58 1,14,504.82

Changes in working capital :

Changes in receivables, loans and advances and other assets (31,087.51) (11,728.88)

Changes in inventories (101.20) (60.20)

Changes in payables, other liabilities and provisions 17,781.23 32,374.85

Cash generated from operations 1,15,179.10 1,35,090.59

Income taxes paid, (net) (8,022.88) (4,870.22)

Net cash generated from operating activities (A) 1,07,156.22 1,30,220.37

B Cash flow from investing activities

Capital expenditure on fixed assets including capital advances (1,832.18) (48,596.84)

Proceeds from sale of fixed assets 1.50 -

Purchase of current investments (2,375.00) (19,500.00)

Proceeds from sale of current investments 2,376.06 19,576.16

Purchase of non-current investments - (3.48)

Bank deposits placed for a period of more than three months (1,577.90) (6,504.78)

Proceeds from maturity of bank deposits placed for a period of more than three months

4,161.55 3,886.29

Loans and advances given to body corporates (35,917.92) (18,500.00)

Loans and advances repaid by body corporates 38,641.71 2,445.12

Interest received on bank deposits 430.30 318.38

Interest received on loans and advances 3,868.73 638.34

Purchase of preference shares of a subsidiary - (18,587.80)

Net cash used in investing activities (B) 7,776.85 (84,828.61)


59

Rs. in lakhs



31 March 2013

C Cash flow from financing activitiesIssue of equity shares by a subsidiary 105.58 -

Proceeds from short-term borrowings 3,260.50 202.74

Proceeds from long-term borrowings 84,837.54 56,859.10

Repayment of long-term borrowings (76,599.84) (32,030.55)

Proceeds from issue of Global Depositary Securities (net of share issue expenses) - 17,204.35

Bills accepted during the year 5,537.53 14,184.69

Bills repaid during the year (20,993.72) (29,086.86)

Share issue expenses paid (64.00) -

Dividend paid (including corporate dividend tax) (2,540.00) (2,510.10)

Finance costs paid (1,08,781.85) (70,695.75)

Net cash used in financing activities (III) (1,15,238.26) (45,872.38)Net decrease in cash and cash equivalents for the year (I+II+III) (305.19) (480.62)Cash and cash equivalents at the beginning of the year 1,134.79 1,615.41

Cash and cash equivalents at end of the year (refer note no 18 (A) ) 829.60 1,134.79 Notes :

1 Reconciliation between closing cash and cash equivalents and cash and bank balances



Cash and cash equivalents as per cash flow statement 829.60 1,134.79

Add : Margin money deposits not considered as cash and cash equivalents as per AS-3

1,587.61 4,171.26

Cash and bank balances as per note no. 18 2,417.21 5,306.05

2 Non cash transaction Interest expenses amounting to Rs. 2,529.81 lakhs (previous year - Rs 3,076.48 lakhs) have been converted into borrowings as per the terms of underlying agreement in this regard.

3 Consolidated Cash Flow Statement has been prepared under the indirect method as set out in “Accounting Standard 3 - Cash Flow Statement” referred to in Section 211 (3C) of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable.


Consolidated Cash Flow Statement for the year ended 31 March 2014






60

Notes forming part of the consolidated financial statements

1. CORPORATE INFORMATION

Essar Ports Limited (“the Company”) is a public limited company domiciled in India and incorporated under the Companies Act, 1956. The Company is engaged in business of providing fleet operating and chartering services.

The Company is listed on BSE Limited and the National Stock Exchange of India Limited (NSE).

The Company 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 104 MTPA across facilities located at Vadinar and Hazira in the State of Gujarat on the west coast of India and Paradip in the State of Odisha on the east coast of India.

The facilities at Vadinar, Hazira and Paradip 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.

The Company through its subsidiaries is in the process of increasing its aggregate ports capacity to 181 MTPA with expansion projects at Hazira, a new port at Salaya in Gujarat, one terminal at Paradip and three iron ore berths at Visakhapatnam. 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.

2. SIGNIFICANT ACCOUNTING POLICIES:

2.1 Basis of preparation

The consolidated financial statements of the Company and its subsidiaries (together the “Group”) have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable. The consolidated financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the consolidated financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the consolidated financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Basis of consolidation

The consolidated financial statements have been prepared on the following basis:

i. The financial statements of the Company and its subsidiaries have been drawn up to 31 March 2014 and 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, intra-group transactions and resulting unrealised profits or loss, unless cost cannot be recovered, in accordance with AS-21 “Consolidated Financial Statements”.

ii. The excess of cost to the Group of its investments in the subsidiary companies over its share of equity of the subsidiary companies, at the dates on which the investments in the subsidiary companies were made, is recognised as ‘Goodwill’ being an asset in the consolidated financial statements and is tested for impairment on annual basis. On the other hand, where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investments of the Group, it is recognised as ‘Capital reserve’ and shown under the head ‘Reserves and surplus’, in the consolidated financial statements.

iii. Minority Interest in the net assets of the consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders at the date on which investments in the subsidiary companies were made and further movements in their share in the equity, subsequent to the dates of investments. Net profit / loss for the year of the subsidiaries attributable to minority interest is identified and adjusted against the profit after tax of the Group in order to arrive at the income attributable to shareholders of the Company.


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iv. Goodwill arising on consolidation is not amortised but tested for impairment.

2.4 Tangible assets

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, and other incidental costs, where applicable.

2.5 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. Intangible assets are amortised following written down value method based as per the rates provided under Schedule XIV to the Companies Act, 1956.

2.6 Capital work-in-progress and expenditure during construction

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Direct expenditure on projects or assets under construction or development is shown under capital work-in-progress.

Expenditure incidental to the construction of projects or assets under construction or development 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 relevant accounts, as applicable.

2.7 Depreciation

Depreciation on fleet and plant and equipment (other than assets to be handed over to Kandla Port Trust and Gujarat Maritime Board under concession agreements) and buildings are provided under the straight line method based on technical evaluation of the economic useful life of respective assets or at the rates prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher as follows:

Class of assets

Method of depreciation Estimated useful life

Fleet SLM over balance useful life or 7% whichever is higher

20 years

Plant and equipment

SLM over balance useful life or 4.75% whichever is higher

20 years

Assets that are to be handed over to Kandla Port Trust and Gujarat Maritime Board are depreciated over the balance period of concession agreements from their respective dates of capitalisation or rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

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/- each are fully depreciated in the year of capitalization.

Depreciation on the incremental value of fixed assets upon revaluation is amortised 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.

2.8 Impairment of assets

The Group assesses at 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 (higher of net selling price and value in use) 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 Consolidated Statement of Profit and Loss, except in case of revalued asset, 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 reflected at the recoverable amount but limited to the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior accounting periods.

2.9 Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or development of qualifying assets (i.e. the assets that take substantial period of time to get ready for its intended use) are capitalised as part of the cost of such assets. Borrowing costs include interest, amortisation of ancillary costs incurred and

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exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Consolidated Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing cost is suspended and charged to the Consolidated Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.10 Investments

Investments are classified into long-term and current investments. Investments which are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long-term investments. Long term investments are carried at cost. Diminution in the value of long term investments is provided for when it is considered as being other than temporary in nature. Current investments are carried at lower of cost of acquisition including incidental / related expenses and net realisable value and the resultant decline, if any, is charged to Consolidated Statement of Profit and Loss.

Cost of investment includes acquisition charges such as brokerage, fees and duties.

2.11 Valuation of inventories

Inventories are valued at lower of cost and net realisable value. The cost of inventory is determined using Weighted Average Cost Method.

2.12 Revenue recognition

Group renders fleet operating and chartering activities, and port and terminal services in the nature of receipt, storage, handing and dispatch of crude oil, petroleum products and dry bulk cargo.

Revenue on transactions of rendering services is recognised under the completed service contract method. Performance is regarded as achieved when the services are rendered and no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the services.

Group also earns revenue from sale of traded goods which is recognised when all significant risks and rewards associated with the ownership of the goods has been transferred to the buyer and no significant uncertainty exists regarding the amount of

consideration that will be derived from sale of traded goods.

2.13 Other income

Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable. Dividend income is accounted for when the right to receive it is established.

Insurance claims are recorded based on reasonable certainty of their settlement.

2.14 Operating lease

Lease expenses and lease income on operating leases are recognised on a straight line basis over the lease term in the Consolidated Statement of Profit and Loss or expenditure during construction, as applicable.

2.15 Employee benefits

a) Post-employment benefit plans

Contribution to defined contribution retirement benefit schemes are recognised as expense in the Consolidated Statement of Profit and Loss / expenditure during construction, as applicable, when employees have rendered services entitling them to contributions.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the Consolidated Statement of Profit and Loss / expenditure during construction, as applicable, for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and is otherwise amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the Consolidated Balance Sheet represents the present value of the defined benefit obligation and is adjusted both for unrecognised past service cost, and for the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme, if lower.

b) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefits include


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compensated absences such as paid annual leave and performance incentives.

c) Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation determined actuarially by using Projected Unit Credit Method at the balance sheet date.

d) Employee stock option scheme

Stock options granted to employees under the employees’ stock option scheme (ESOS) are accounted by adopting the intrinsic value method in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on accounting for employee share based payments issued by the ICAI. Accordingly, the excess of market price of the shares over the exercise price is recognised as deferred employee compensation and is charged to Consolidated Statement of Profit and Loss account on straight-line basis over the vesting period.

The number of options expected to vest is based on the best available estimate and are revised, if necessary, if subsequent information indicates that the number of stock options expected to vest differs from previous estimates.

2.16 Foreign currency transactions

Foreign currency transactions are accounted at the rate normally prevailing on the transaction date. Monetary items denominated in foreign currency are translated at the exchange rate prevailing as at the balance sheet date. Exchange differences arising on settlement or conversion of short term foreign currency monetary items are recognised in the Consolidated Statement of Profit and Loss or capital work-in-progress / expenditure during construction, as applicable. Exchange differences relating to long term foreign currency monetary items are accounted as under:

(i) in so far as they relate to the acquisition of a depreciable capital asset are added to / deducted from the cost of such capital asset and depreciated over the balance useful life of the asset; and

(ii) in other cases such differences are accumulated in “Foreign Currency Monetary Items Translation Difference Account” and amortised in the Consolidated Statement of Profit and Loss over the balance life of the long term foreign currency monetary item or 31 March 2020, whichever is earlier.

2.17 Taxation

Tax expenses comprise of current tax and deferred taxes. Current taxes on income from qualifying fleet are provided as per special provisions relating to income of shipping companies under the Income Tax Act, 1961 on the basis of deemed tonnage income of the Company whereas current tax on non-tonnage income and other income of each taxable entity are provided in accordance with the relevant tax rules applicable for respective tax jurisdictions.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Group will pay normal income tax. Accordingly, MAT is recognised as an asset in the Consolidated Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Group.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there is unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.18 Segment reporting

The Group identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

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The accounting policies adopted for segment reporting are in line with the accounting policies of the Group. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Group as a whole and are not allocable to segments on reasonable basis have been included under ‘unallocated revenue / expenses / assets / liabilities’.

2.19 Provisions, contingent liabilities and contingent assets

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of amount can be made.

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 likelihood of an outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the consolidated financial statements.

2.20 Cash and cash equivalents (for the purposes of Cash Flow statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.21 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Group are segregated based on the available information.

2.22 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.


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3 Share capital

(a) Particulars As at 31 March 2014 As at 31 March 2013 Number Rs. in lakhs Number Rs. in lakhs

AuthorisedEquity shares of Rs. 10/- each 1,00,00,00,000 1,00,000.00 1,00,00,00,000 1,00,000.00 Redeemable cumulative preference shares of Rs. 100/- each

10,50,000 1,050.00 10,50,000 1,050.00

1,01,050.00 1,01,050.00 Issued and subscribedEquity shares of Rs.10/- each 42,81,34,646 42,813.46 42,81,34,646 42,813.46 Paid upEquity shares of Rs. 10/- each (refer note (i) below) 42,78,87,998 42,788.80 42,78,87,998 42,788.80 Forfeited equity shares 2,46,648 13.05 2,46,648 13.05

42,801.85 42,801.85

(i) Of above 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 the financial year 2008-09.

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

Particulars As at 31 March 2014 As at 31 March 2013 Number Rs. in lakhs Number Rs. in lakhs

Equity shares of Rs. 10/- eachAt the beginning of the year 42,78,87,998 42,788.80 41,04,55,552 41,045.56 Add: Issue of shares during the year NIL (previous year 52,666 Global Depositary Securities (GDS)* represented by 1,74,32,446 equity shares)

- - 1,74,32,446 1,743.24

At the end of the year 42,78,87,998 42,788.80 42,78,87,998 42,788.80

* Each GDS represents 331 equity shares During the year, the holders of GDS have converted the GDS into 1,74,32,466 equity shares of the Company on 19 June 2013.

(c) Terms of / rights attached to Equity Shares / Global Depository Securities (GDS)

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of equity share is entitled to 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 holder of equity share is entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

(d) Shares held by holding company, the ultimate holding company, their subsidiaries and associates

Particulars As at 31 March 2014 As at 31 March 2013 Number % Number %

Equity shares of Rs. 10/- eachEssar Shipping & Logistics Limited, Cyprus, the holding company

26,16,97,688 61.16 28,45,03,711 66.49

Essar Global Fund Limited, the ultimate holding company

66 0.00 66 0.00

Essar Projects (India) Limited, subsidiary of the ultimate holding company

5,63,97,000 13.18 5,63,96,995 13.18

Essar Steel India Limited, subsidiary of the ultimate holding company

25,47,223 0.60 25,47,223 0.60

32,06,41,977 74.94 34,34,47,995 80.27

There are no other shareholders holding more than 5% shares in the Company other than as disclosed in (d) above.

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(i) Stock options :

In the annual general meeting held on September 9, 2011, the shareholders have approved the issue of upto 1% options under the “Essar Ports Employee Stock Options Scheme 2011” to be issued in one or more tranches.

Out of above, 7,40,334 and 12,92,746 options (convertible into equivalent number of equity shares of Rs.10/- each of the Company, in three equal installments i.e. at the end of 3rd / 4th / 5th years from the grant date) have been granted to the eligible employees and executive directors of the Company pursuant to Essar Ports Employee Stock Option Scheme 2011 on 28 November 2011 and 22 January 2014 respectively. The exercise period for the options is 7 years from the date of vesting.

These stock options have been granted at an option value of Rs. 71.10 and Rs. 57.75 equity share of the face value of Rs. 10/- each (i.e. the closing price of the equity shares of the Company on 1 December 2011 and 21 January 2014 at the National Stock Exchange of India Limited, being the exchange having the higher quantity of trading of Company’s shares). Out of above, 20,33,080 options were outstanding as on 31 March 2014.

(ii) 5 % Foreign Currency Convertible Bonds are convertible into 2,04,75,463 equity shares (previous year 2,04,75,463 equity shares) of Rs.10/- each at Rs. 91.70 per share (refer footnote (iv) to note 5 (c)).

4 Reserves and surplus


31 March 2014 As at

31 March 2013 a. General reserve

Opening balance 36,338.37 28,454.11 Add: Transferred from surplus in Consolidated Statement of Profit and Loss 2,675.01 2,334.26 Add: Transferred from tonnage tax utilised reserve - 5,550.00 Closing balance 39,013.38 36,338.37

b. Securities premium accountOpening balance 15,461.11 - Add: Premium on issuance of GDS - 15,731.68 Less: Share issue expenses - (270.57)Closing balance 15,461.11 15,461.11

c. Revaluation reserveOpening balance 83.18 94.34 Less: Utilised for set off against depreciation expense (11.16) (11.16)Closing balance 72.02 83.18

d. Tonnage tax reserveOpening balance 500.00 - Add: Transferred from surplus in Consolidated Statement of Profit and Loss 250.00 500.00 Closing balance 750.00 500.00

e. Tonnage tax utilised reserveOpening balance - 5,550.00 Less: Transferred to general reserve - (5,550.00)Closing balance - -

f. Surplus in Consolidated Statement of Profit and LossOpening balance 1,77,515.86 1,45,076.56 Add: Change in minority interest (21.16) 4,756.61 Add: Profit for the year 38,373.80 33,154.64 Less: Transferred to general reserve (2,675.01) (2,334.26)


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31 March 2014 As at

31 March 2013 Less: Dividends proposed / paid : On equity shares of the Company (2,160.89) (2,248.05) On preference shares of a subsidiary (0.15) (0.15)Less: Tax on dividend (including Group's share of dividend tax paid by a subsidiary) (378.96) (389.49)Less: Transferred to tonnage tax reserve (250.00) (500.00)Closing balance 2,10,403.49 1,77,515.86

Total 2,65,700.00 2,29,898.52

5 Long-term borrowings Rs. in lakhs


31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013

A. Secured(a) Loan from banksi. Rupee term loans 2,52,262.83 2,55,263.63 28,947.00 24,105.08 ii. Funded interest facilities (refer note c (i) (g) below)

(including funding of interest for the period October 1998 to December 2003 and funded interest thereon)

1,09,305.69 1,10,579.15 1,925.31 2,343.65

Less : Amount not payable if relevant funded interest is paid as of the balance sheet date

(38,516.88) (40,092.17) - -

70,788.81 70,486.98 1,925.31 2,343.65 (b) From financial institutionsi. Rupee term loans 1,49,908.31 95,839.42 11,883.25 13,745.10 ii. Funded interest facilities (refer note c (i) (g) below)

(including funding of interest for the period October 1998 to December 2003 and funded interest thereon)

66,855.66 67,103.53 260.64 285.09

Less : Amount not payable if relevant funded interest is paid as of the balance sheet date

(22,807.90) (23,752.25) - -

44,047.75 43,351.28 260.64 285.09 (c) Foreign currency buyers' credit (refer note c (iii) below) 7,163.14 16,355.57 - - Total secured borrowings [A] 5,24,170.84 4,81,296.88 43,016.20 40,478.92 B. Unsecured(a) Foreign currency convertible bonds [FCCBs] (refer

note c (iv) below) 24,039.92 21,755.72 - -

(b) Rupee term loan from others - - - 30,000.00 Total unsecured borrowings [B] 24,039.92 21,755.72 - 30,000.00 Total borrowings [A + B] 5,48,210.76 5,03,052.60 43,016.20 70,478.92 Less: Amount disclosed under the head 'other current liabilities' (refer note no. 7)

- - (43,016.20) (70,478.92)

Long-term borrowings 5,48,210.76 5,03,052.60 - -

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C. Notes :

i. Secured rupee term loans under Master Restructuring Agreement (MRA) : a) Term loans and funded interest facilities of Rs. 2,71,604.24 lakhs (Previous year Rs. 2,79,385.27 lakhs) governed by MRA with banks

and financial institutions are secured / to be secured by first ranking security interests over all movable and immovable assets of a subsidiary, present and future, and immovable assets of Essar Oil Limited (“EOL”) pertaining to the Terminal Project, insurance policies related to the Terminal Project, rights, title and interests under project documents, trust and retention accounts and all sub-accounts created thereunder, pledge of certain shares of a subsidiary held by promoters (as defined in MRA) / associates of promoters or a subsidiary and personal guarantees of promoters.

b) A term loan from a financial institution and funded interest facilities thereon of Rs. 6,393.48 lakhs (Previous year Rs. 12,257.30 lakhs) governed by MRA are secured by a guarantee of EOL for Rs. 20,000.00 lakhs (Previous year Rs. 20,000.00 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 rupee term loans of Rs. 1,13,718.04 lakhs (previous year Rs. 1,13,718.04 lakhs) from banks and financial institutions are repayable between March 2017 and June 2022 in 22 unequal structured quarterly installments ranging from Rs. 2,919.84 lakhs to Rs. 7,007.06 lakhs.

d) Secured rupee term loans of Rs. 36,251.72 lakhs (previous year Rs. 47,511.59 lakhs) from banks and financial institutions are repayable between June 2014 to March 2017 in 13 quarterly installments ranging from Rs. 2,049.15 lakhs to Rs. 4,943.91 lakhs.

e) Secured rupee term loans of Rs.13,120.77 lakhs (previous year Rs.13,120.77 lakhs) from banks and financial institutions are payable on June 2027.

f) Secured rupee term loans of Rs. 27,999.02 lakhs (previous year Rs. 27,999.02 lakhs) from bank and financial institutions are repayable between March 2019 and September 2023 in 19 quarterly installments ranging from Rs 699.98 lakhs to Rs 5,599.80 lakhs.

g) Recognition of Facility Stoppage

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 a subsidiary 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. In order to reflect the substance of the above, in terms of presentation in the Consolidated Balance Sheet, an amount of Rs. 61,324.78 lakhs (previous year Rs. 63,844.42 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 of a subsidiary till each reporting date is treated as a finance cost item in the Consolidated Statement of Profit and Loss.

ii. Secured rupee term loans from banks and financial institutions of Rs. 3,43,350.97 lakhs (previous year Rs. 2,77,622.08 lakhs) are repayable in quarterly installments starting from June, 2012 to March, 2023. These loans are secured by first mortgage and charge of all present and future movable and immovable assets / properties of the Group.

iii. Foreign currency buyers’ credit facilities are part of consortium agreement. The Group has intention to convert buyers’ credit facilities into term loans on maturity as per the terms of the secured rupee term loans. Repayment terms are as per those disclosed in point (ii) above.

iv. FCCBs of US$ 1,85,71,428 (Series - B) due on 24 August 2017 and US$ 2,14,28,572 (Series - A) due on 24 August 2015 carry interest @ 5% per annum payable semi annually. The FCCBs are convertible into 2,04,75,463 fully paid equity shares of Rs.10 each of the Company, any time upto the date of maturity, at the option of the FCCBs holders at conversion price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per USD. The FCCBs, if not converted, till the maturity date will be redeemed at par.

v. The classification of loans between current liabilities and non-current liabilities continues based on repayment schedule under respective agreements as no loans have been recalled due to non compliance of conditions under any of the loan agreements. This is in accordance with the guidance issued by the Institute of Chartered Accountants of India on Revised Schedule VI to the Companies Act,1956. Principal installments and interest accrued and due payable on 31 March 2014 as per the terms of loan agreements have since been paid.


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6 Deferred tax liabilities (net)

A. Deferred tax liabilities assets (net) Rs. in lakhs


As at 31 March 2013

Tax effect of items constituting deferred tax liabilitiesOn difference between book balance and tax balance of fixed assets 22,200.08 13,822.07

(A) 22,200.08 13,822.07 Tax effect of items constituting deferred tax assetsUnabsorbed depreciation carried forward 7,155.00 4,144.41

(B) 7,155.00 4,144.41 Total (A-B) 15,045.08 9,677.66

B. Deferred tax assets (net) Rs. in lakhs


As at 31 March 2013

Tax effect of items constituting deferred tax liabilitiesOn difference between book balance and tax balance of fixed assets 52,431.57 49,901.54

(A) 52,431.57 49,901.54 Tax effect of items constituting deferred tax assetsUnabsorbed depreciation carried forward 44,885.46 43,738.34 Interest disallowance u/s 43B of the Income Tax Act, 1961 16,503.66 16,646.35 On expenditure deferred in books but allowable for tax purposes 4,363.22 3,513.99

(B) 65,752.34 63,898.68 Total (B-A) 13,320.77 13,997.14

Group has recognised Deferred Tax Asset on unabsorbed depreciation to the extent of the corresponding reversible deferred tax liability on the difference between the book value and the written down value of fixed assets under income tax. Having regard to the existing tenure of the Petroleum Handling Agreement with the user of the terminal facilities and expected extension thereof considering the nature of the facilities, Deferred Tax Asset with respect to disallowances under section 43B of the Income Tax Act, 1961 related to funded interest of a subsidiary is recognised to the extent of expected availability of sufficient taxable profit during the years of payment of such funded interest.

7 Other long-term / current liabilities Rs. in lakhs


31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 Payable for capital expenses 23.13 15.38 12,806.56 29,587.90 Acceptances in respect of capital goods* 709.19 17,187.71 2,080.08 1,050.00 Current maturities of long-term borrowings (including installment due at the year end Rs. 1,787.50 lakhs (Previous year Rs. 2,794.98 lakhs)) (refer footnote (v) to note 5 (C))

- - 43,016.20 70,478.92

Interest accrued and due on borrowings (refer footnote (v) to note 5 (C))

- - 542.02 7,865.46

Interest accrued but not due on borrowings - - 4,459.29 432.66 Advances from customers for services - - 5,040.63 21,874.29

70



31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 Security deposit from a customer (including interest due)

29,800.00 - 604.62 -

Other liabilities (statutory dues for tax deducted at source, provident fund and other dues)

- - 1,387.62 1,867.18

Others - - 354.98 853.24 Total 30,532.32 17,203.09 70,292.00 1,34,009.65

*Under letters of credit issued by lender banks and to be converted into long term loans as per terms of loan agreements.

8 Short-term provisions Rs. in lakhs


As at 31 March 2013

(a) Provision for employee benefits Gratuity (refer note no. 35) 48.05 54.92 Compensated absences (refer note no. 35) 575.83 507.60 (b) Others Provisions for taxation [net of advance tax of Rs.2,270.75 lakhs (previous year

Rs.1,858.25 lakhs)] 5,233.82 2,058.14

Proposed dividend on equity shares of the Company 2,160.89 2,160.89 Proposed dividend on preference shares of a subsidiary 0.15 0.15 Tax on proposed dividends 378.96 378.96 Total 8,397.70 5,160.66

9 Short-term borrowings Rs. in lakhs


As at 31 March 2013

SecuredWorking capital loans from banks 4,894.53 1,832.16 (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 a subsidiary including but not limited to goodwill, trademarks and patents) Foreign currency buyers' credit (refer note no. 5 (c) (iii)) 330.30 132.17 Total 5,224.83 1,964.33

10 Trade payables Rs. in lakhs


As at 31 March 2013

Trade payables other than acceptances (refer note no 33) 15,366.00 10,239.27 Total 15,366.00 10,239.27

Rs. in lakhs


71


11.

Tang

ible

/ in

tang

ible

ass

ets

Rs.

in la

khs

Part

icul

ars

Gro

ss b

lock

(at c

ost /

val

uatio

n)A

ccum

ulat

ed d

epre

ciat

ion

/ am

ortis

atio

n N

et b

lock

A

s at

01

Apr

il 20

13

Add

ition

s du

ring

the

year

Dis

posa

ls /

dedu

ctio

ns

As

at

31 M

arch

20

14

As

at

01 A

pril

2013

Dep

reci

atio

n /

amor

tisat

ion

for t

he y

ear

Ded

uctio

ns

on d

ispo

sal

As

at

31 M

arch

20

14

As

at 3

1 M

arch

201

4 A

s at

31

Mar

ch

2013

Tang

ible

ass

ets

Land

- fre

ehol

d 3

32.9

5 6

.62

35.

70

303

.87

- -

- -

303

.87

332

.95

(162

.34)

(170

.61)

(-)

(332

.95)

(-)

- (-

) (-

) (3

32.9

5) (1

62.3

4)Bu

ildin

gs 1

0,95

6.32

2

4.81

-

10,

981.

13

1,5

08.5

0 3

91.1

5 -

1,8

99.6

5 9

,081

.48

9,4

47.8

2 (1

0,95

6.32

) (-

) (-

) (1

0,95

6.32

) (1

,133

.37)

(375

.13)

(-)

(1,5

08.5

0) (9

,447

.82)

(9,8

22.9

5)Fl

eet

- Ow

ned

(refe

r not

e “b

” bel

ow)

12,

623.

75

3.5

5 -

12,

627.

30

6,5

34.0

2 1

,191

.78

- 7

,725

.80

4,9

01.5

0 6

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.73

(12,

623.

75)

(-)

(-)

(12,

623.

75)

(5,3

42.4

0) (1

,191

.62)

(-)

(6,5

34.0

2) (6

,089

.73)

(7,2

81.3

5)Be

rth &

jetty

and

dre

dged

cha

nnel

56,

773.

69

75,

044.

22

- 1

,31,

817.

91

6,6

25.7

9 2

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.26

- 9

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.05

1,2

2,75

4.86

5

0,14

7.90

(5

6,77

3.69

) (-

) (-

) (5

6,77

3.69

) (4

,354

.82)

(2,2

70.9

7) (-

) (6

,625

.79)

(50,

147.

90)

(52,

418.

87)

Plan

t and

equ

ipm

ent

5,0

2,03

3.31

4

,294

.39

316

.44

5,0

6,01

1.26

9

0,73

7.65

2

4,40

7.47

-

1,1

5,14

5.12

3

,90,

866.

14

4,1

1,29

5.66

(4

,11,

645.

81)

(90,

387.

50)

(-)

(5,0

2,03

3.31

) (6

9,46

6.09

) (2

1,27

1.56

) (-

) (9

0,73

7.65

) (4

,11,

295.

66)

(3,4

2,17

9.72

)Fu

rnitu

re, fi

xtur

e, a

ir-co

nditio

ners

, re

frige

rato

rs a

nd o

ffice

equ

ipm

ents

608

.09

81.

65

- 6

89.7

4 2

28.2

6 5

4.08

-

282

.34

407

.40

379

.83

(536

.32)

(71.

77)

(-)

(608

.09)

(179

.95)

(48.

31)

(-)

(228

.26)

(379

.83)

(356

.37)

Vehi

cles

2

41.8

4 -

6.5

1 2

35.3

3 4

7.57

3

0.20

2

.61

75.

16

160

.17

194

.27

(241

.84)

- (-

) (2

41.8

4) (2

0.84

) (2

6.73

) (-

) (4

7.57

) (1

94.2

7) (2

21.0

0)To

tal t

angi

ble

asse

ts (A

) 5

,83,

569.

95

79,

455.

24

358

.65

6,6

2,66

6.54

1

,05,

681.

79

28,

511.

93

2.6

1 1

,34,

191.

11

5,2

8,47

5.43

4

,77,

888.

16

Inta

ngib

le a

sset

sSo

ftwar

e 3

4.67

-

- 3

4.67

3

0.29

1

.48

- 3

1.77

2

.90

4.3

8 (3

2.04

) (2

.63)

(-)

(34.

67)

(21.

93)

(8.3

6) (-

) (3

0.29

) (4

.38)

(10.

11)

Tota

l int

angi

ble

fixed

ass

ets

(B)

34.

67

- -

34.

67

30.

29

1.4

8 -

31.

77

2.9

0 4

.38

Tota

l (A

+B)

5,8

3,60

4.62

7

9,45

5.24

3

58.6

5 6

,62,

701.

21

1,0

5,71

2.08

2

8,51

3.41

2

.61

1,3

4,22

2.88

5

,28,

478.

33

4,7

7,89

2.54

Pr

evio

us y

ear

(4,9

2,27

2.11

) (9

0,63

2.51

) (-

) (5

,82,

904.

62)

(80,

519.

40)

(25,

192.

68)

(-)

(1,0

5,71

2.08

)(4

,77,

192.

54)

Not

es :

a.

Flee

t wer

e re

valu

ed o

n 31

Mar

ch 2

008

on th

e ba

sis

of v

alua

tion

done

by

appr

oved

val

uers

bas

ed o

n pr

evai

ling

mar

ket r

ate.

The

net

diff

eren

ce b

etw

een

book

val

ue a

nd re

valu

ed

valu

e as

on

31 M

arch

200

8 am

ount

ing

to R

s. 1

29.6

2 la

khs

had

been

add

ed to

boo

k va

lue

of fl

eet a

nd c

orre

spon

ding

cre

dit w

as g

iven

to re

valu

atio

n re

serv

e. O

ut o

f dep

reci

atio

n fo

r the

yea

r, a

sum

of R

s.11

.16

lakh

s (p

revi

ous

year

Rs.

11.

16 la

khs)

to th

e ex

tent

it is

cha

rged

on

the

incr

ease

d va

lue

has

been

reco

uped

from

reva

luat

ion

rese

rve.

(ref

er fo

ot n

ote

(f) b

elow

).b.

Fl

eet h

ave

been

hyp

othe

cate

d ag

ains

t sec

ured

non

con

verti

ble

debe

ntur

es is

sued

by

Ess

ar S

hipp

ing

Lim

ited

(fello

w s

ubsi

diar

y).

c.

The

Gro

up h

as e

xerc

ised

the

optio

n av

aila

ble

as p

er p

ara

46/4

6A o

f Acc

ount

ing

Sta

ndar

d (A

S) 1

1, “T

he e

ffect

of c

hang

es in

fore

ign

exch

ange

rate

s”, v

ide

notifi

catio

n no

. GS

R 9

14

(E) d

ated

29

Dec

embe

r 201

1. C

onse

quen

tly, t

he e

xcha

nge

loss

of R

s. 4

,513

.30

lakh

s (p

revi

ous

year

Rs.

2,0

88.4

7 la

khs)

has

bee

n ca

pita

lised

to th

e co

st o

f tan

gibl

e as

sets

.d.

A

dditi

ons

to B

erth

and

jetty

, pla

nt a

nd e

quip

men

t and

bui

ldin

gs in

clud

e bo

rrow

ing

cost

cap

italis

ed d

urin

g th

e ye

ar o

f Rs.

26,

451.

32 la

khs

(pre

viou

s ye

ar R

s. N

il la

khs)

, Rs.

Nil

lakh

s (p

revi

ous

year

Rs.

13,1

13.6

3 la

khs)

and

Rs.

Nil

(pre

viou

s ye

ar R

s. 3

50.0

1 la

khs)

resp

ectiv

ely.

e.

Pla

nt a

nd e

quip

men

t inc

lude

s je

tty a

nd o

ther

ass

ets

havi

ng c

arry

ing

amou

nts

aggr

egat

ing

to R

s. 6

8,96

0.26

lakh

s (p

revi

ous

year

Rs.

68,

960.

26 la

khs)

whi

ch a

re c

onst

ruct

ed

/ ins

talle

d / e

rect

ed o

ver

land

ow

ned

by K

andl

a P

ort T

rust

(K

PT)

und

er a

con

cess

ion

arra

ngem

ent.

As

per

the

term

s of

the

conc

essi

on a

rran

gem

ent,

the

said

ass

ets

will

be

trans

ferr

ed to

KP

T at

the

end

of th

e co

nces

sion

per

iod

i.e. O

ctob

er 2

027.

f.

Pla

nt a

nd e

quip

men

t and

‘Ber

th &

jetty

and

dre

dged

cha

nnel

’ with

car

ryin

g va

lue

of R

s. 1

7,91

5.24

lakh

s (p

revi

ous

year

Rs.

17,

122.

48 la

khs)

and

Rs.

1,3

1,94

0.20

lakh

s (p

revi

ous

year

Rs.

56,

774.

14 la

khs)

resp

ectiv

ely

cons

truct

ed o

ver t

he w

ater

fron

t allo

ted

by G

ujar

at M

ariti

me

Boa

rd (G

MB

) is

used

by

the

Gro

up u

nder

con

cess

ion

arra

ngem

ent w

ith G

MB

.g.

C

onve

yor b

elt w

ith th

e ca

rryi

ng v

alue

of R

s. 4

3,32

3.65

lakh

s (p

revi

ous

year

Rs.

43,

323.

65 la

khs)

has

bee

n pa

rtly

erec

ted

on th

e la

nd o

wne

d by

Par

adip

Por

t Tru

st a

nd a

llotte

d to

th

e G

roup

und

er c

once

ssio

n ar

rang

emen

t for

the

perio

d un

til A

pril

2020

.h.

C

redi

t not

e re

ceiv

ed fr

om th

e co

ntra

ctor

dur

ing

the

year

tow

ards

adj

ustm

ent t

o co

st o

f Rs.

316

.44

lakh

s ha

s be

en s

how

n as

ded

uctio

ns fr

om P

lant

and

equ

ipm

ent.

i.

Det

ails

of d

epre

ciat

ion

are

as fo

llow

s:

Rs.

in la

khs

Part

icul

ars

31 M

arch

201

431

Mar

ch 2

013

Dep

reci

atio

n fo

r the

yea

r as

abov

e 2

8,51

3.41

2

5,19

2.68

Le

ss :

Dep

reci

atio

n ca

pita

lised

dur

ing

the

year

781

.37

778

.56

Less

: D

epre

ciat

ion

reco

uped

from

reva

luat

ion

rese

rve

11.

16

11.

16

Dep

reci

atio

n ch

arge

d to

the

Con

solid

ated

Sta

tem

ent o

f Pro

fit a

nd L

oss

27,

720.

88

24,

402.

96

j. P

revi

ous

year

s fig

ures

are

dis

clos

ed in

bra

cket

.

72


12 Capital work-in-progress Rs. in lakhs


As at 31 March 2013

(A) Capital work-in-progress 1,02,245.13 1,37,894.31 (B) Expenditure during construction (see details below) 56,653.46 60,544.47

Total 1,58,898.59 1,98,438.78

Expenditure during construction As at 31 March 2013

Incurred during the year

Capitalised during the year

As at 31 March 2014

Survey charges 232.09 - (86.32) 145.77 Consultancy and professional fees 2,870.55 1,629.24 (1,075.40) 3,424.39 Travelling and courier expenses 434.57 387.47 (88.07) 733.97 Insurance expenses 320.75 171.65 (130.69) 361.71 Finance costs :

Interest on borrowings 30,743.75 20,506.61 (20,543.36) 30,707.00 Interest on foreign currency convertible bonds 5,370.04 529.13 - 5,899.17 Other borrowing costs 8,941.25 608.82 (5,907.96) 3,642.11

Employee benefits expense : Salaries, wages and bonus 1 2,940.21 1,091.28 (1,104.71) 2,926.78 Contribution to staff provident and other funds (refer note no. 35) 191.24 95.58 - 286.82 Staff welfare expenses 170.99 71.25 - 242.24

Stores and spares consumption 683.50 574.11 - 1,257.61 Hire charges 979.50 441.40 (387.58) 1,033.32 Manning charges 2,431.92 1,029.39 (1,066.39) 2,394.92 Rates and taxes 211.99 110.74 (11.86) 310.87 Security charges 157.16 128.65 - 285.81 Repairs and maintenance 109.17 80.28 - 189.45 Depreciation 2,320.55 781.37 (1,246.79) 1,855.13 Agency fees 116.02 - (47.57) 68.45 Power and electricity 491.26 288.78 (329.83) 450.21 Net loss on foreign currency transactions and translation 3,574.32 2,424.81 - 5,999.13 Others 993.29 164.54 (106.01) 1,051.82

(A) 64,284.12 31,115.10 (32,132.54) 63,266.68 Less: Income during construction : Interest on bank deposits (530.67) - 141.70 (388.97)Gain on sale of mutual fund units (103.47) - 4.46 (99.01)Interest on loans and advances (129.10) - 10.06 (119.04)Cargo handling income (2,699.70) (3,171.22) - (5,870.92)Income from sale of scrap and machinery hire income (350.56) (38.17) 159.38 (229.35)Vessel, equipment and berth hire income (22.22) - 9.11 (13.11)Other miscellaneous income (11.29) - - (11.29)Less : Provision for taxes 107.36 11.11 - 118.47

(B) (3,739.65) (3,198.28) 324.71 (6,613.22)Total (A-B) 60,544.47 27,916.82 (31,807.83) 56,653.46

The Management has performed assessment of Recoverable Amount of Dry Bulk Terminal under construction at Salaya (“the Project”) with carrying value of Rs. 92,195.77 lakhs on the basis of its value in use having regard to increase in its estimated project cost in terms of Accounting Standard (AS) 28 - Impairment of Assets by estimating the future cash flows over the estimated useful life of the Project. The cash flow projections are appraised and concurred by the lenders and includes estimates and assumptions relating to revenue from existing long term contracts with related parties and revenue from third parties considering report on traffic study conducted by an independent expert, operational performance, exchange variation and inflation, etc. which are considered reasonable by the Management. On a careful evaluation of aforesaid factors, the Management has concluded that the recoverable amount of the Project is higher than its carrying amounts as at 31 March 2014.


73


13 Non-current / current Investments Rs. in lakhs


31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013UnquotedNon-trade investments (valued at cost)Investments in equity shares (fully paid up)386,000 equity shares of Rs.10 /- each of Bhander Power Limited

104.51 104.51 - -

Current investments (at lower of cost and fair value)Investment in mutual fund units208.020 units of Taurus Liquid Fund at NAV of Rs.1287.5308 each (Previous year NIL)

- - 2.68 -

Total 104.51 104.51 2.68 - Aggregate value of unquoted investments 104.51 104.51 2.68 -

14 Long-term / short-term loans and advances Rs. in lakhs

Particulars Non-Current Current As at

31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 Unsecured, considered goodCapital advances - to related parties (refer note no. 36) 12,432.69 11,075.00 - - - to others 366.54 391.94 - -

(A) 12,799.23 11,466.94 - - Security deposits - to related parties (refer note no. 36) 597.70 796.70 450.00 150.00 - to others 376.01 377.39 548.59 6.39

(B) 973.71 1,174.09 998.59 156.39 Loans and advances- to related parties (refer note no. 36) - 1,380.72 22,675.12 22,299.53 - to others - - 3,728.92 -

(C) - 1,380.72 26,404.04 22,299.53 Advances recoverable in cash or kind or for value to be received

(D) - 133.12 625.87 1,203.83

Other loans and advances - Advance income-tax and tax deducted at source (net of provision for taxation of Rs. 277.94 lakhs (previous year Rs. 1,862.98 lakhs))

3,161.97 720.51 783.05 1,690.50

- MAT credit entitlement * 18,803.91 9,431.70 - - - Prepaid expenses 4,687.12 4,092.85 1,622.50 2,047.65 - Service tax receivable 5,387.96 3,225.26 5,498.85 3,169.00

74


Particulars Non-Current Current As at

31 March 2014 As at

31 March 2013 As at

31 March 2014 As at

31 March 2013 - Cenvat receivable 0.62 3,370.56 1,029.59 3,334.30 - Advances to vendors - - 720.98 626.62 - Other receivables - - 161.63 189.97 - Earnest Money Deposit - - 448.00 - - Loans and advances to employees - - 7.18 -

(E) 32,041.58 20,840.88 10,271.78 11,058.04 Total (A+B+C+D+E) 45,814.52 34,995.75 38,300.28 34,717.79

* Minimum Alternate Tax (MAT) credit recognised by the subsidiaries as per the provisions of section 115JB of the Income Tax Act, 1961, can be carried forward for ten years from their respective year of recognition and set-off against the tax payable when these subsidiaries will fall under the normal tax rate. The convincing evidence of availing tax credit is supported by the long-term revenue arrangement between the subsidiaries and related parties which will ensure a net liability of sufficient future taxable income against which the above MAT credit will be adjusted.

15 Other non-current / current assets Rs. in lakhs

Particulars Non-current CurrentAs at

31 March 2014As at

31 March 2013As at

31 March 2014As at

31 March 2013Unsecured, considered goodMargin money - In time deposits (Debt service reserve account as per the term loan agreement) with maturity of more than 12 months

1,625.00 1,625.14 - -

- In time deposits (lien marked against facility of letter of credit) with maturity of more than 12 months

21.08 776.96 - -

Deposits in escrow account with maturity of more than 12 months* 99.26 99.26 - - Unamortised share issue expenses 71.57 54.52 38.27 64.30 Interest accrued on bank deposits - - 49.44 240.30 Interest accrued on loans and advance given to a related party (refer note no. 36)

- - 43.50 119.91

Net asset for gratuity ( refer note no. 35) - - - 7.57 Other receivables :- from related parties (refer note no. 36) - - 2,446.03 2,763.54 - from others - - 2,492.80 1,615.36 Total 1,816.91 2,555.88 5,070.04 4,810.98

*As per the requirement of Master Restructuring Agreement for secured term loans, there are restrictions on operation of escrow account of the subsidiary.

Rs. in lakhs


75


16 Inventories (valued at lower of cost and net realisable value) Rs. in lakhs


As at 31 March 2013

Stores and spares 801.33 697.51 Fuel, oil and lubricants 48.65 51.27 Total 849.98 748.78

17 Trade receivables Rs. in lakhs


As at 31 March 2013

Unsecured, considered goodTrade receivables outstanding for a period exceeding six months from the date they were due for payment

4,844.45 1,290.34

Other trade receivables 42,813.70 19,814.13 Total 47,658.15 21,104.47

18 Cash and bank balances Rs. in lakhs


As at 31 March 2013

Cash and cash equivalentsBalances with banks in current accounts 829.60 1,134.79

(A) 829.60 1,134.79 Other bank balancesBalance with banks held as margin money (lien marked against bank guarantees and LC facility)

1,587.61 4,171.26

(B) 1,587.61 4,171.26 Total (A + B) 2,417.21 5,306.05

19 Revenue from operations Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Sale of servicesPort and terminal services (refer note below) 1,53,325.34 1,41,192.21 Fleet operating and chartering earnings 1,366.68 960.76 Sale of petroleum products (refer note no. 38) 57,745.42 - Total 2,12,437.44 1,42,152.97 Note:Sale of port and terminal services comprisesCrude and petroleum product storage services 57,157.76 56,500.38 Crude and petroleum product handling services 15,601.65 15,152.62 Cargo handling services 69,642.17 58,179.61 Wharfage and port charges 10,923.76 11,359.60 Total 1,53,325.34 1,41,192.21

76


20 Other income Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Interest income on bank deposits 239.44 242.28 Interest income on loans and advances 3,792.32 1,982.14 Interest income on income tax refund 15.51 12.62 Interest income on overdue receivables (refer note no. 36) 4,255.57 145.96 Management fee income [net of expenses of Rs.128.75 lakhs (previous year Rs. 408.79 lakhs)](refer note no. 36)

14.16 52.35

Gain on sale of current investments 3.74 54.98 Gain on foreign currency translation and transactions 148.16 54.64 Insurance claim 134.85 - Sale of scrap 256.06 35.93 Others 191.48 125.31 Total 9,051.29 2,706.21

21 Purchase of traded goods Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Purchase cost of petroleum products (refer note no. 38) 57,745.42 - Total 57,745.42 -

22 Operating expenses Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Consumption of stores and spares 641.78 821.84 Commission, brokerage and agency fees 38.86 41.93 Operation and maintenance service charges 2,044.92 3,283.52 Dry docking expenses 316.57 39.69 Rent and hire charges 3,085.35 2,931.23 Manning management 3,942.46 3,485.31 Power and fuel 1,027.62 672.08 Security charges 59.28 79.15 Lighterage costs 1,709.70 1,356.65 Port charges 1,901.08 1,673.94 Wharfage charges 6,659.80 6,246.94 Repairs - plant and machinery 947.84 1,411.70 Insurance, protection and indemnity club fees 1,275.57 1,126.84 Total 23,650.83 23,170.82


77


23 Employee benefits expense Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Salaries, wages and bonus 2,923.70 2,254.49

Contribution to staff provident and other funds (refer note no. 35) 236.77 158.08

Staff welfare expenses 90.48 99.23

Total 3,250.95 2,511.80

24 Other expenses Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Rent 311.86 232.62

Rates and taxes 46.91 15.01

Repairs and maintenance - building 89.45 146.95

Legal and professional fees 1,886.45 1,005.47

Travelling and conveyance 653.15 416.12

Auditors’ remuneration 114.06 99.82

Communication expenses 15.29 12.39

Vehicle hire and maintenance charges 42.14 26.80

Others 969.67 434.21

Total 4,128.98 2,389.39

25 Finance costs Rs. in lakhs


31 March 2014

For the year ended

31 March 2013Interest expense on :- bank loans 26,954.08 29,961.89

- loans from financial institutions 24,430.70 16,886.51

- foreign currency convertible bonds 1,148.75 379.27

- on advance from a customer (refer note no. 36) 2,506.98 1,395.25

- on security deposit from a customer (refer note no. 36) 671.80 -

- others 483.09 68.79

Change in the present obligation of funded interest loans [refer note no. 5 (C) (i) (g)] 2,519.64 2,291.56

Other finance charges (mainly include amortisation of upfront fees) 1,193.75 1,494.00

Total 59,908.79 52,477.27

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26 Subsidiaries

All subsidiaries of the Company are incorporated in India and has reporting date of 31 March 2014. 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 Immediate holding

% of voting right % of effective ownership Interest

As on 31 March 2014

As on 31 March 2013

As on 31 March 2014

As on 31 March 2013

Vadinar Oil Terminal Limited (“VOTL”) EPL 100.00% 100.00% 100.00% 100.00%

Vadinar Ports & Terminals Limited (“VPTL”) VOTL 100.00% 100.00% 100.00% 100.00%

Essar Bulk Terminal Limited (“EBTL”) EPL 74.00% 74.00% 99.04% 99.04%@

Essar Bulk Terminal Paradip Limited (“EBTPL”) EPL 70.30% 70.30% 99.99% 99.99%@

Essar Paradip Terminals Limited (“EPaTL”) EPL 90.00% 90.00% 99.94% 99.94%@

Essar Dredging Limited (“EDL”) # EBTL 100.00% 100.00% 100.00% 100.00%

Essar Bulk Terminal (Salaya) Limited (“EBTSL”) EPL 74.00% 100.00% 99.50% 100.00%

Essar Vizag Terminal Limited (“EVTL”) * EPL 100.00% N.A. 100.00% N.A.

* became a subsidiary w.e.f. October 23, 2013 # became a subsidiary w.e.f. October 1, 2012

@ During the previous year ended March 31, 2013, terms of CCCPPS issued by the subsidiary companies to the Company have been amended to the effect that CCCPPS holder would be entitled to receive, over and above the preferential dividend and share capital, the dividend as and when distributed and the remaining assets of the subsidiaries after distribution of all preferential amounts, in proportion to their share holding in the event of liquidation, at par with the equity shareholders. Accordingly, the CCCPPS have been considered in computation of the effective ownership interest of the Company over those subsidiaries for the purpose of consolidation.

27 Contingent liabilities Rs. in lakhs


As at 31 March 2013

Claims against the Group not acknowledged as debt - 95.01

Guarantee given on behalf of others 10,400.00 10,400.00

Total 10,400.00 10,495.01

28 Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 93,655.50 lakhs (previous year Rs.68,016.86 lakhs).

b. As per the borrowing agreements of subsidiaries with banks and financial institutions, the Group has commitment to invest Rs.12,108.94 lakhs (previous year Rs. 29,897.15 lakhs) into the projects of subsidiaries. Under the agreements with lenders, the Company has committed not to dilute its investments in any of the port and terminal projects developed by its subsidiaries below 51% till maturity of the loan.


79


29. Details of leasing arrangements - assets taken on operating leases Rs. in lakhs


As at 31 March 2013

a. Payable not later than 1 year 454.92 439.98 b. Payable later than 1 year but not later than 5 years 1,772.43 1,846.24 c. Payable later than 5 years 4,125.18 4,506.30 Total 6,352.53 6,792.52

The Group has entered into non cancellable operating lease agreements for office premises for the period of 5 years with monthly lease rental of Rs. 11.78 lakhs and berths for the period of 30 years (remaining period of approximate 13.5 years) with yearly lease rental of Rs. 313.55 lakhs.

30 Segment disclosure

Business segment - Primary Segment Rs. in lakhs



Segment revenueFleet operating and chartering 4,013.43 4,232.84 Port and terminal services 1,53,325.34 1,41,192.21 Trading in goods 57,745.42 - Unallocated 5,000.28 410.44 Less: Inter segment revenue (2,646.75) (3,272.08)Total segment revenue 2,17,437.72 1,42,563.41 Add: Interest income on loans and advances 3,792.32 1,985.89 Add: Interest income on bank deposits 239.44 242.28 Add: Interest income on income tax refund 15.51 12.62 Add: Gain on sale of current / long term investments 3.74 54.98 Total revenue 2,21,488.73 1,44,859.18 Segment results Fleet operating and chartering 527.30 (4.04)Port and terminal services 95,413.08 89,682.08 Unallocated 5,000.28 410.40 Total 1,00,940.66 90,088.44 Less: Unallocable Interest and finance expense (59,908.79) (51,082.02)Add: Interest income on loans and advances 3,792.32 590.64 Add: Interest income on bank deposits 239.44 242.28 Add: Interest income on income tax refund 15.51 12.62 Add: Gain on sale of current / long term investments 3.74 54.98 Profit before tax 45,082.88 39,906.94 (Less) / Add : Taxes (6,340.53) (6,446.97)Profit before share of minority’s interest 38,742.35 33,459.97 Share of minority’s interest (368.55) (305.33)Profit for the year 38,373.80 33,154.64

80




Segment assetsFleet operating and chartering 7,917.11 10,326.25

Port and terminal services 9,25,179.68 9,04,959.66

Trading in goods 4,922.06 -

Unallocated 52,608.84 26,599.23

Total 9,90,627.69 9,41,885.14 Add: Deferred tax asset 13,320.77 13,997.14

Total assets 10,03,948.46 9,55,882.28 Segment liabilitiesFleet operating and chartering (112.08) (736.25)

Port and terminal services (60,990.74) (64,263.53)

Trading in goods (4,922.06) -

Total (66,024.88) (64,999.78)Add: Loan funds (including interest due / not due) (6,04,222.81) (6,02,031.68)

Add: Proposed dividend (2,540.00) (2,540.00)

Add: Deferred tax liabilities (20,278.90) (11,735.80)

Total liabilities (6,93,066.59) (6,81,307.26)Additions to fixed assets (refer foot note 2 below)Port and terminal services 79,455.24 90,632.51

Depreciation and amortisation (refer foot note 3 below)Fleet operating and chartering 330.60 333.65

Port and terminal services 27,390.30 24,069.31

Total 27,720.90 24,402.96

Notes

1. The Group has disclosed Business segment as primary segment. Segments have been identified taking into account the organisation structure, nature of services, differing risk and internal reporting. The Group’s operations predominantly relate to Fleet operating and chartering, Port and terminal services, and trading in petroleum products.

2. Additions to fixed assets shown above are including exchange difference and excluding capital work in progress and expenditure during construction.

3. Depreciation excludes Rs. 781.35 lakhs (previous year Rs.778.56 lakhs) transferred to expenditure during construction and Rs. 11.16 lakhs (Previous year Rs. 11.16 lakhs) recouped from fixed assets revaluation reserve.

4. Segment revenue from sale of traded goods is earned from a customer located in Mauritius and balance due from the customer is disclosed under sale of traded goods in segment assets. Other operations of the Group are located in India.

Rs. in lakhs


81


31 Earnings per share



Net profit after tax and minority interest attributable to equity share holders for basic EPS 38,373.80 33,154.64 Add: Interest on foreign currency convertible bonds (FCCB) (Rs. in lakhs) 1,148.75 379.27 Add: Exchange loss on FCCB revaluation (Rs. in lakhs) 10.80 6.81 Net profit attributable to equity share holders for diluted EPS 39,533.35 33,540.72 Weighted average no. of equity shares outstanding during the yearfor Basic EPS (Nos.) 42,78,87,998 42,49,82,590 for Diluted EPS (Nos.) 44,83,63,461 44,56,19,951 Basic EPS (Rs.) 8.97 7.80 Diluted EPS (Rs.) 8.82 7.53 Face value per Share (Rs.) 10 10 Reconciliation between number of shares used for calculating basic and diluted earnings per sharea) Number of shares outstanding during the year for calculating basic EPS 42,78,87,998 42,49,82,590b) Potential equity shares (convertible FCCB) 2,04,75,463 2,04,75,463c) Potential equity shares (ESOP) - 1,61,898 d) Number of shares outstanding during the year for calculating diluted EPS (a+b+c) 44,83,63,461 44,56,19,951

Note : The Group has capitalised interest of Rs. 529.13 lakhs (previous year Rs. 846.57 lakhs) on FCCB in the consolidated financial statements, which is not considered for calculation of profit for diluted EPS.

32 Derivative instruments and unhedged foreign currency exposures(A) Unhedged foreign currency exposuresThe year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below.Amounts receivable in foreign currency on account of the following:

Particulars Rs. in lakhs Foreign currency in lakhsAs at

31 March 2014As at

31 March 2013Currency As at

31 March 2014As at

31 March 2013Trade receivable on sale of traded goods 4,922.06 - USD 80.63 - Rendering of services 1,592.95 1,313.82 USD 26.51 24.16 Interest receivable 335.65 142.21 USD 5.58 2.61 Balances in bank account 0.70 6.53 USD 0.01 0.12

Amounts payable in foreign currency on account of the following:Particulars Rs. in lakhs Foreign currency in lakhs

As at 31 March 2014

As at 31 March 2013

Currency As at 31 March 2014

As at 31 March 2013

Import of goods and services 11.74 0.80 USD 0.19 0.01 5.90 - EUR 0.07 - 0.26 - GBP 0.00 -

Buyer’s credit (including interest accrued) 5,502.94 15,059.31 USD 91.60 276.89 2,011.40 88.21 EUR 24.36 1.27

Trade payables - 170.75 EUR - 2.32 Foreign currency convertible bond (including interest accrued but not due)

24,217.82 21,856.44 USD 402.96 401.85

(B) There were no forward / option contracts entered into by the Group during the current and previous financial year to hedge its foreign currency exposures.

82


33 Dues to micro, small and medium enterprisesThe Group has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 and hence disclosure relating to amount unpaid at the year end together with interest paid / payable under this Act have not been given.

34 Going concernAs on 31 March 2014, the Group’s current liabilities exceeded its current assets by Rs. 4,982.19 lakhs. Considering the cash flows from additional borrowings and future operations, for which no material uncertainty exists, the consolidated financial statements have been prepared on a going concern basis.

35 Employee benefits :

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

I. Defined contribution plans

The Group has recognised the following amounts in the Consolidated Statement of Profit and Loss during the year: Rs. in lakhs


31 March 2014

For the year ended

31 March 2013a) Group accident policy premium 15.28 11.33 b) Employer’s contribution to superannuation fund 12.54 10.30 c) Employer’s contribution to provident fund 135.63 116.07 Total 163.45 137.70

The above amounts are included in ‘contribution to staff provident and other funds / expenditure during construction’ (refer note no.12 and 23).

II. Defined benefit plansa. Contribution to provident fundb. Contribution to gratuity fundc. Provision for compensated absences (CA)In accordance with AS-15, relevant disclosures are as under:

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

Particulars Provident fund (funded)

Gratuity-shore officers(funded)

Gratuity-shore officers(non funded)

CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Present value of defined benefit obligations – opening balance

396.50 268.46 319.79 232.43 - 9.17 507.60 453.29

Current service cost 30.08 27.23 37.86 33.62 - 3.07 59.03 37.79 Current service contribution - employee

40.08 41.77 - - - - - -

Interest cost 41.40 25.79 23.66 18.54 - 0.78 19.59 17.80 Acquisitions 14.02 33.25 - - - - - - Benefits paid (20.00) - (40.58) (8.82) - - (3.73) (4.72)Actuarial (gain) / loss on obligations

0.78 - 28.33 34.56 - (3.55) (6.66) 3.44

Present value of defined benefit obligations – closing balance

502.86 396.50 369.06 310.33 - 9.47 575.83 507.60


83


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




CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Fair value of plan assets – opening balance

396.50 268.46 272.45 185.88 - - - -

Expected return on plan assets

- - 24.23 18.03 - - - -

Actual return on plan assets 42.18 25.79 - - - - - - Acquisition adjustment - - (1.97) - - - - - Actuarial gains / (losses) - - (1.24) 16.00 - - - - Contributions by the employer / employees

84.18 102.25 68.12 61.36 - - - -

Benefits paid (20.00) - (40.58) (8.82) - - - - Fair value of plan assets – closing balance

502.86 396.50 321.01 272.45 - - - -

(C) Amount recognised in Consolidated Balance Sheet: Rs. in lakhs




CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Present value of defined benefit obligations

502.86 396.50 369.06 310.33 - 9.47 575.83 507.60

Fair value of plan assets 502.86 396.50 321.01 272.45 - - - - (Liability) / asset recognised in the Consolidated Balance Sheet (refer note 8 and 15)

- - (48.05) (37.88) - (9.47) (575.83) (507.60)

(D) Expenses recognised in the Consolidated Statement of Profit and Loss / expenditure during the construction: Rs. in lakhs




CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Current service cost 30.08 27.23 37.86 33.62 - 3.07 59.03 37.79 Interest cost 41.40 25.79 23.66 18.54 - 0.78 19.59 17.80 Expected / actual return on plan assets

(42.18) (25.79) (24.23) (18.03) - - - -

Net actuarial (gain) / loss recognised in the period

0.78 - 29.56 18.54 - (3.55) (6.66) 3.44

Total expenses recognised in the Consolidated Statement of Profit and Loss / expenditure during the construction (included in contribution to provident and other funds) (refer note no. 12 and 23)

30.08 27.23 66.86 52.67 - 0.30 71.96 59.03

84


(E ) Experience history: Rs. in lakhs


31 March 14 31 March 13 31 March 12 31 March 11 31 March 10

Defined benefit obligations at the end of the year

(502.86) (396.50) (268.46) (1408.24) (1669.00)

Plan assets at the end of the year 502.86 396.50 268.46 1408.24 1669.00

Funded status - - - - -

Experience gain / (loss) adjustments on plan liabilities

- - - - -


- - - - -


- - - - -

Rs. in lakhs

Particulars Gratuity-shore officers (funded)


Defined benefit obligations at the end of the year

(369.06) (310.33) (220.90) (168.94) (155.86)

Plan assets at the end of the year 321.01 272.45 185.84 137.10 197.56

Funded status (48.05) (37.88) (35.06) (31.83) 41.70


(52.83) (23.95) (8.81) (41.93) (66.04)


(1.24) 16.00 0.55 (5.23) (9.36)


24.52 (10.59) 8.77 2.80 4.15

Rs. in lakhs

Particulars Gratuity-Offshore officers (non funded)


Defined benefit obligation at the end of the year

- (9.47) (20.69) (9.27) (190.00)

Plan assets at the end of the year - - - - -

Funded status - (9.47) (20.69) (9.27) (190.00)


- 3.02 (7.92) - 90.00


- - - - -


- 0.53 0.74 - 34.00


85


Particulars CA (non funded)


Defined benefit obligation at the end of the year

(575.83) (507.60) (314.62) (231.41) (278.40)

Plan assets at the end of the year - - - - -

Funded status (575.83) (507.60) (314.62) (231.41) (278.40)


(21.16) 3.90 (35.69) (94.13) (140.29)


- - - - -


14.50 (7.35) 19.99 2.13 21.46

(F) Category of plan assets:

Percentage of each category of plan assets to total fair value of plan assets

Provident fund (funded)



CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Administered by Life Insurance Corporation of India (LIC)*

- - 100.00% 100.00% NA NA NA NA

Government of India security 25.00% 25.00% - - NA NA NA NAPublic sector bonds / TDRs 60.00% 60.00% - - NA NA NA NAState government securities 15.00% 15.00% - - NA NA NA NA

*The Group is unable to obtain the details of plan assets from the LIC and hence the disclosure thereof is not made.

(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:




CA(non funded)

31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13 31 March 14 31 March 13Discount rate (per annum) 9.20% 7.90% 9.20% 7.90% - 7.90% 9.20% 7.90%Rate of return on plan assets (for funded scheme)

8.75% 8.60% 8.50% 7.90% - NA NA NA

Expected retirement age of employees (years)

58 58 58 58 - 58 58 58

Separation rate of employees

- - 10.00% 10.00% - 10.00% 10.00% 10.00%

Rate of increase in compensation

- - 9.00% 9.00% - 9.00% 9.00% 9.00%

ii) Mortality rates considered are as per the published rates in India Assured Lives Mortality (2006-08) (modified) Ultimate (previous year rates in the Life Corporation (1994-96) Mortality table.)

Rs. in lakhs

86


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 Group entities up to a maximum of 120 days.

iv) The expected contribution to be made by the Company for funding its liability for gratuity during the financial year 2014 -15 will be Rs. 44.76 lakhs and actual will be made as per demand raised by the fund administrator Life Insurance Corporation of India.

v) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

vi) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion, supply and demand and other relevant factors.

vii) The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method.

viii) The employer managed provident fund is considered as defined benefit plan.

ix) Liability on account of long term compensated absences has been actuarially valued as per Projected Unit Credit Method.

x) Short term compensated absences have been provided on actual basis.

36. Related party relationships, transactions and balances

(a) Holding companies:

Essar Global Fund Limited (formerly known as Essar Global Limited), Cayman Island, ultimate holding company

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

(b) Key management personnel:

Rajiv Agarwal, Managing Director

Shailesh Sawa, Director finance

Kamla Kant Sinha, Whole-time Director

Capt. Subhas Das, Whole-time Director (Essar Bulk Terminal Limited)

Capt. Rajesh Beri, Whole-time Director (Essar Bulk Terminal Paradip Limited) (w.e.f. October 17, 2011 upto September 9, 2012)

U. Venkat Rao, Whole-time Director (Essar Bulk Terminal Paradip Limited) (w.e.f. February 1, 2013)

Capt. Deepak Sachdeva, Whole-time Director (Vadinar Oil Terminal limited)

Dipankar Pal, Managing Director (Vadinar Oil Terminal Limited and Essar Bulk Terminal (Salaya) Limited)

Girish Joshi, Manager (Vadinar Ports & Terminals Limited)

Capt. Rajen Sachar, Whole-time Director (Essar Bulk Terminal (Salaya) Limited) (Upto May 15, 2013)

(c) Fellow subsidiaries where there have been transactions:

Essar Oil Limited

Essar Steel India Limited

Essar Logistics Limited

Essar Shipping Limited

Essar Shipping (Cyprus) Limited

Essar Projects (India) Limited

Essar Offshore Subsea Limited


87


Essar Engineering Services Limited

Essar Power Gujarat Limited


Aegis Limited

Equinox Business Parks Private Limited

Essar Project Management Consultancy Limited

Bhander Power Limited

Essar Energy Services Limited

Essar Heavy Engineering Services Limited

Essar Energy Overseas Limited, Mauritius

d. The details of transactions with related parties Rs. in lakhs

Nature of transactions Holding companies Fellow subsidiaries Key management personnel Total 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13

Revenue from operationsEssar Logistics Limited - - 197.06 2,032.51 - - 197.06 2,032.51 Essar Steel India Limited - - 70,753.37 54,697.99 - - 70,753.37 54,697.99 Essar Steel Logistics Limited - - 1,291.66 - - - 1,291.66 - Essar Power Gujarat Limited - - 881.90 235.56 - - 881.90 235.56 Essar Oil Limited - - 77,366.13 75,995.51 - - 77,366.13 75,995.51 Essar Shipping Limited - - 35.14 2,531.48 - - 35.14 2,531.48 Essar Projects (India) Limited - - 25.39 297.82 - - 25.39 297.82 Essar Offshore Subsea Limited - - 257.55 1.00 - - 257.55 1.00 Total - - 1,50,808.20 1,35,791.87 - - 1,50,808.20 1,35,791.87 Revenue from Sale of productEssar Energy Overseas Limited, Mauritius - - 57,745.42 - - - 57,745.42 - Interest income from loans and advancesEssar Oil Limited - - 309.40 584.12 - - 309.40 584.12 Essar Steel India Limited - - 3,355.66 1,398.02 - - 3,355.66 1,398.02 Total - - 3,665.06 1,982.14 - - 3,665.06 1,982.14 Interest income on overdue receivablesEssar Steel India Limited - - 4,070.28 - - - 4,070.28 - Essar Africa Holdings Limited - - 181.54 142.21 - - 181.54 142.21 Essar Shipping & Logistics Limited 3.75 3.75 - - - - 3.75 3.75 Total 3.75 3.75 4,251.82 142.21 - - 4,255.57 145.96 Management fee incomeEssar Africa Holdings Limited - - 142.91 461.14 - - 142.91 461.14 Other IncomeEssar Logistics Limited - - 8.63 38.09 - - 8.63 38.09 Essar Steel India Limited - - 21.69 11.63 - - 21.69 11.63 Essar Steel Logistics Limited - - 1.05 - - - 1.05 - Essar Oil Limited - - 10.36 5.15 - - 10.36 5.15 Essar Shipping Limited - - 17.72 - - - 17.72 - Essar Offshore Subsea Limited - - 44.14 - - - 44.14 - Total - - 103.59 54.87 - - 103.59 54.87

88



Consumption of stores and spares Essar Steel India Limited - - 0.48 28.27 - - 0.48 28.27 Essar Logistics Limited - - 6.14 5.33 - - 6.14 5.33 Essar Shipping Limited - - - 8.41 - - - 8.41 Total - - 6.62 42.01 - - 6.62 42.01 Rent and hire chargesEssar Shipping Limited - - 99.65 107.31 - - 99.65 107.31 Dry dock expensesEssar Offshore Subsea Limited - - 103.10 - - - 103.10 - Commission, brokerage and agency feesEssar Shipping Limited - - 24.00 28.33 - - 24.00 28.33 Operation and maintenance service expenseEssar Heavy Engineering Services Limited - - - 6.95 - - - 6.95 Essar Oil Limited - - 2,044.93 2,440.65 - - 2,044.93 2,440.65 Total - - 2,044.93 2,447.60 - - 2,044.93 2,447.60 Hire chargesEssar Logistics Limited - - - 85.20 - - - 85.20 Essar Projects (India) Limited - - 23.14 - - - 23.14 - Total - - 23.14 85.20 - - 23.14 85.20 Power and fuelEssar Oil Limited - - 46.89 32.55 - - 46.89 32.55 Essar Steel India Limited - - 471.44 149.58 - - 471.44 149.58 Bhander Power Limited - - 425.45 295.22 - - 425.45 295.22 Total - - 943.78 477.35 - - 943.78 477.35 Manning management expenseEssar Oil Limited - - 1,612.13 682.25 - - 1,612.13 682.25 Essar Energy Services Limited - - 257.91 274.32 - - 257.91 274.32 Essar Projects (India) Limited - - 75.42 562.44 - - 75.42 562.44 Total - - 1,945.46 1,519.01 - - 1,945.46 1,519.01 Remuneration*Capt. Subhas Das - - - - 88.84 88.18 88.84 88.18 Capt. Rajesh Beri - - - - - 73.03 - 73.03 U. Venkat Rao - - - - 40.52 7.49 40.52 7.49 Capt. Rajen Sachar - - - - 17.64 57.02 17.64 57.02 Capt. Deepak Sachdeva - - - - 60.48 56.54 60.48 56.54 Dipankar Pal - - - - 126.04 59.95 126.04 59.95 Girish Joshi - - - - 35.86 27.37 35.86 27.37 Rajiv Agarwal - - - - 338.83 231.89 338.83 231.89 Kamala Kant Sinha - - - - 137.57 142.52 137.57 142.52 Shailesh Sawa - - - - 175.74 156.86 175.74 156.86 Total - - - - 1,021.52 900.85 1,021.52 900.85 Recovery of expenseEssar Oil Limited - - 95.62 109.27 - - 95.62 109.27 Purchase of traded goodsEssar Oil Limited - - 57,745.42 - - - 57,745.42 - RentEssar Oil Limited - - 175.32 186.42 - - 175.32 186.42 Equinox Business Parks Private Limited - - 287.75 143.77 - - 287.75 143.77 Essar Steel India Limited - - - 8.74 - - - 8.74

Rs. in lakhs


89



Total - - 463.07 338.93 - - 463.07 338.93 Legal and professional feesEssar Engineering Services Limited - - - 2.57 - - - 2.57 Aegis Limited - - 181.70 388.80 - - 181.70 388.80 Essar Projects (India) Limited - - 20.59 - - - 20.59 - Total - - 202.29 391.37 - - 202.29 391.37 Travelling expensesEssar Oil Limited - - 14.36 14.55 - - 14.36 14.55 Staff welfare expensesEssar Steel India Limited - - 23.72 - - - 23.72 - Other expensesAegis Limited - - 4.66 8.81 - - 4.66 8.81 Essar Oil Limited - - 0.72 1.06 - - 0.72 1.06 Total - - 5.38 9.87 - - 5.38 9.87

*Does not include the amount payable towards gratuity and compensated absence by the Company and subsidiaries as the same is calculated for the Company and subsidiaries as whole on actuarial basis.

Rs. in lakhs


Interest expense on advance from a customerEssar Oil Limited - - 2,506.98 1,395.25 - - 2,506.98 1,395.25 Interest expense on security deposit receivedEssar Oil Limited - - 671.80 - - - 671.80 - Interest expenses- othersBhander Power Limited - - 174.14 - - - 174.14 - Reimbursement of expensesEssar Oil Limited - - 32.03 40.19 - - 32.03 40.19 Essar Shipping Limited - - - 33.80 - - - 33.80 Essar Logistics Limited - - - 0.09 - - - 0.09 Essar Steel India Limited - - 217.75 1.24 - - 217.75 1.24 Essar Projects (India) Limited - - 1.69 1.42 - - 1.69 1.42 Aegis Limited - - 5.94 10.05 - - 5.94 10.05 Total - - 257.41 86.79 - - 257.42 86.79 Advances from customersEssar Oil Limited - - - 21,123.36 - - - 21,123.36 Advance from customer, repaid backEssar Oil Limited - - 19,800.00 - - - 19,800.00 - Capital work-in-progress / expenditure during constructionEssar Projects (India) Limited - - 3,085.34 30,121.71 - - 3,085.34 30,121.71 Essar Engineering Services Limited - - 34.74 275.86 - - 34.74 275.86 Essar Oil Limited - - 8.65 1.36 - - 8.65 1.36 Aegis Limited - - 43.29 189.38 - - 43.29 189.38 Essar Steel India Limited - - - 11.62 - - - 11.62 Essar Logistics Limited - - - 2.58 - - - 2.58 Essar Power Gujarat Limited - - 4.78 19.17 - - 4.78 19.17 Essar Offshore Subsea Limited - - - 159.60 - - - 159.60 Essar Project Management Consultants Limited

- - - 38.00 - - - 38.00

Essar Steel India Limited - - 137.23 163.26 - - 137.23 163.26

Rs. in lakhs

90



Essar Engineering Services Limited - - - 0.93 - - - 0.93 Essar Oil Limited - - - 5.59 - - - 5.59 Bhander Power Limited - - - 272.39 - - - 272.39 Total - - 3,314.03 31,261.45 - - 3,314.03 31,261.45 Income from Site formation servicesEssar Engineering Services Limited - - - 141.96 - - - 141.96 Cargo handling income (credited to EDC)Essar Power Gujarat Limited - - 2,062.44 1,632.00 - - 2,062.44 1,632.00 Essar Oil Limited - - 1,108.78 776.54 - - 1,108.78 776.54 Total - - 3,171.22 2,408.54 - - 3,171.22 2,408.54 Security deposit received from customerEssar Oil Limited - - 29,800.00 - - - 29,800.00 - Security deposits given to related partiesEquinox Business Parks Private Limited - - 101.00 75.00 - - 101.00 75.00 Essar Steel India Limited - - - 421.70 - - - 421.70 Total - - 101.00 496.70 - - 101.00 496.70 Loans and advances givenEssar Steel India Limited - - 1,000.00 18,500.00 - - 1,000.00 18,500.00 Loans and advances received backEssar Oil Limited - - 3,193.97 2,445.12 - - 3,193.97 2,445.12

e. Related party balances at the year end Rs. in lakhs

Nature of balances Holding companies Fellow subsidiaries Key management personnel Total 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13

Capital creditorsEssar Projects (India) Limited - - 10,838.81 23,804.30 - - 10,838.81 23,804.30 Aegis Limited - - 51.85 140.58 - - 51.85 140.58 Essar Logistics Limited - - - 568.52 - - - 568.52 Essar Projects Management Consultants Limited

- - 171.82 171.82 - - 171.82 171.82

Essar Offshore Subsea Limited - - 159.60 159.60 - - 159.60 159.60 Essar Engineering Services Limited - - - 41.00 - - - 41.00 Total - - 11,222.08 24,885.82 - - 11,222.08 24,885.82 Security deposit from customer (including interest due)Essar Oil Limited - - 30,404.62 - - - 30,404.62 - Advances from customers for servicesEssar Oil Limited - - 4,893.60 21,123.36 - - 4,893.60 21,123.36 Essar Power Gujarat Limited - - 131.30 - - - 131.30 - Total - - 5,024.90 21,123.36 - - 5,024.90 21,123.36 Trade payablesEssar Steel India Limited - - 6.40 41.78 - - 6.40 41.78 Essar Logistics Limited - - - 0.98 - - - 0.98 Essar Heavy Engineering Services Limited - - 123.00 179.44 - - 123.00 179.44 Essar Engineering Services Limited - - - 27.18 - - - 27.18 Essar Oil Limited - - 6,448.83 1,960.64 - - 6,448.83 1,960.64 Aegis Limited - - 79.01 200.75 - - 79.01 200.75 Bhander Power Limited - - - 586.56 - - - 586.56 Essar Projects (India) Limited - - 30.65 33.83 - - 30.65 33.83 Essar Energy Services Limited - - 169.75 427.50 - - 169.75 427.50

Rs. in lakhs


91

Notes forming part of the consolidated financial statementsRs. in lakhs

Nature of balances Holding companies Fellow subsidiaries Key management personnel Total 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13

Essar Shipping Limited - - 147.07 234.98 - - 147.07 234.98 Equinox Business Parks Private Limited - - 58.50 147.17 - - 58.50 147.17 Essar Offshore Subsea Limited - - 18.78 - - - 18.78 - Total - - 7,081.99 3,840.81 - - 7,081.99 3,840.81 Capital advances givenEssar Projects (India) Limited - - 12,330.28 10,966.89 - - 12,330.28 10,966.89 Essar Projects Management Consultants Limited - - 38.88 38.88 - - 38.88 38.88 Essar Logistics Limited - - 63.54 63.54 - - 63.54 63.54 Essar Engineering Services Limited - - - 5.70 - - - 5.70 Total - - 12,432.70 11,075.01 - - 12,432.70 11,075.01 Security deposits givenEssar Shipping Limited - - 450.00 450.00 - - 450.00 450.00 Essar Steel India Limited - - 421.70 421.70 - - 421.70 421.70 Equinox Business Parks Private Limited - - 176.00 75.00 - - 176.00 75.00 Total - - 1,047.70 946.70 - - 1,047.70 946.70 Loans and advances given (including interest)Essar Oil Limited - - 1,431.22 4,694.60 - - 1,431.22 4,694.60 Essar Steel India Limited - - 21,287.40 19,105.56 - - 21,287.40 19,105.56 Total - - 22,718.62 23,800.16 - - 22,718.62 23,800.16

Other receivableEssar Africa Holdings Limited - - 1,928.61 1,456.02 - - 1,928.61 1,456.02 Essar Oil Limited - - 106.28 129.02 - - 106.28 129.02 Essar Power Gujarat Limited - - 411.13 1,178.50 - - 411.13 1,178.50 Total - - 2,446.02 2,763.54 - - 2,446.02 2,763.53 Investments in sharesBhander Power Limited - - 104.51 104.51 - - 104.51 104.51 Trade receivablesEssar Logistics Limited - - 1,108.46 1,752.76 - - 1,108.46 1,752.76 Essar Energy Overseas Limited, Mauritius - - 4,922.06 - - - 4,922.06 - Essar Steel India Limited - - 39,537.39 12,454.38 - - 39,537.39 12,454.38 Essar Steel Logistic Limited - - 615.10 - - - 615.10 - Essar Shipping Limited - - 293.03 610.32 - - 293.03 610.32 Essar Oil Limited - - 596.47 5,319.77 - - 596.47 5,319.77 Essar Shipping & Logistics Limited - - - 31.53 - - - 31.53 Essar Offshore Subsea Limited - - 194.86 1.12 - - 194.86 1.12 Essar Projects (India) Limited - - - 341.40 - - - 341.40 Total - - 47,267.37 20,511.28 - - 47,267.37 20,511.28 Other receivables from related parties Essar Projects (India) Limited - - 55.04 2.76 - - 55.04 2.76 Guarantees given on behalf of othersEssar Oil Limited - - 10,400.00 10,400.00 - - 10,400.00 10,400.00 Guarantees availed for loans takenEssar Steel India Limited - - - 2,500.00 - - - 2,500.00

Essar Oil Limited - - 20,000.00 20,000.00 - - 20,000.00 20,000.00 Essar Shipping & Logistics Limited - 30,000.00 - - - - - 30,000.00 Total - 30,000.00 20,000.00 22,500.00 - - 20,000.00 52,500.00

92


37. Statement pursuant to Section 212 of the Companies Act, 1956

Statement of information relating to subsidiaries including subsidiaries of subsidiaries (In terms of Government of India, Ministry of Corporate Affairs General Circular No: 2/2011, No: 5/12/2007-CL-III dated 8 February 2011) in compliance with section 212 of the Companies Act, 1956 for the year ended 31 March 2014.

Rs. in lakhs

Sr. No.

Particulars Vadinar Oil Terminal Limited


Essar Bulk Terminal

(Salaya) Limited

Essar Bulk Terminal

Paradip Limited


Vadinar Ports & Terminals

Limited


Essar Dredging Limited

1 Capital (including share application money)

1,04,614.20 26,150.00 32,806.07 18,000.00 1,000.00 27,013.45 5.00 5.00

2 Reserves (31,807.38) 80,202.49 (391.22) 2,937.87 (17.67) 6,516.16 (1.00) (4.12)

3 Total assets (excluding current and non-current investments)

2,82,172.15 2,84,710.85 99,960.07 70,041.47 1,418.00 1,61,068.40 315.97 2.79

4 Total liabilities 2,28,521.01 1,91,471.41 67,545.22 49,103.60 435.67 1,67,673.19 311.97 1.91

5 Details of investments (except investments in subsidiaries)

- 104.22 - - - - -

6 Turnover 1,14,526.39 61,393.08 375.00 15,056.18 - 29,108.20 - -

7 Profit / (loss) before taxation 2,022.92 39,612.98 38.01 3,881.33 (5.97) 956.39 (1.00) (0.33)

8 Provision for taxation 746.37 3,948.24 - 1,319.50 - 325.92 - -

9 Profit after taxation (7-8) 1,276.55 35,664.74 38.01 2,561.83 (5.97) 630.47 (1.00) (0.33)

10 Proposed dividend (including corporate dividend tax)

- 2,608.78 - - - - - -

38 During the year, a subsidiary has purchased and sold traded goods of Rs. 57,745.42 lakhs on account of fulfilment of an export obligation.

39 The previous year figures have been regrouped / reclassified wherever necessary to correspond with current year’s classification / disclosures.

For and on behalf of Board of Directors Rajiv Agarwal Shailesh SawaManaging Director Director Finance


MumbaiMay 15, 2014

93

Green Initiative

The Ministry of Corporate Affairs has taken a Green Initiative in Corporate Governance by allowing paperless compliance by companies. Accordingly, companies can now send various documents electronically to those shareholders who register their email addresses. To receive all communications including Annual Reports by e-mail:

• Holders of shares in physical form are requested to fill up the postage pre-paid e-mail registration form setout below and send it to the share transfer agents, M/s. Data Software Research Company Private Limited.

• Members holding shares in demat form may register their e-mail IDs with the Company or their Depository Participant.

E-MAIL REGISTRATION

To Data Software Research Company Private Limited

Unit: ESSAR PORTS LIMITED19, Pycroft Garden RoadOff.Haddows RoadNungambakkamChennai 600006

Dear Sir/s,

Re: Registration of e-mail ID for receiving communications in electronic form

I am a shareholder of the Company. I want to receive all communications from the Company including AGM and other General Meeting notices and explanatory statement(s) thereto, Balance Sheets, Directors’ Reports, Auditor’s Reports etc. through e-mail. Please register my e-mail ID, set-out below, in your records for sending communication through e-mail:

Folio No* :

Name of 1st Registered Holder* :

Name of Joint Holder(s) :

Address :

Pin Code :

E-mail ID (to be registered) : Mobile :

Landline :

Date Signature of first holder*

Important Notes: 1) Fields marked * are mandatory for registration of the e-mail ID 2) On registration, all the communications will be sent to the e-mail ID registered in the folio 3) The form is also available on the website of the Company www.essar.com4) Any change in e-mail ID, from time to time, may please be registered in the records of the Company.

Demat of shares: I would like to know the procedure to demat my physically held shares of Essar Ports Limited. Please contact at my above contact number. [ Yes/ No ]

1st Fold

2nd Fold

BUSINESS REPLY INLAND LETTER

Postage will be

paid by the Addressee

No postage stamp

necessary if posted in

INDIA

Business Reply Permit No. TN/CH/(C)/BRP/996

Greams Road P.O. Chennai - 600 006

To

Data Software Research Company Private Limited

Unit: ESSAR PORTS LIMITED19, Pycrofts Garden RoadOff. Haddows RoadNungambakkamChennai 600 006

ESSAR PORTS LIMITEDREGD. OFFICE: Administration Building, Essar Refinery Complex, Okha Highway (SH – 25), Taluka Khambhalia,

District Jamnagar, Gujarat 361 305CIN : L85110GJ1975PLC054824

PROXY FORM[Pursuant to Section 105 (6) of the Companies Act, 2013 and

rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the member(s) :

Registered address

E-Mail

Folio No. / Client ID

Folio No. / Client ID

I / We, being the member(s) of holding shares

of the above named company hereby appoint

Name :

E-Mail :

Address :

Signature

Or failing him / her

Name :

E-Mail :

Address :

Signature

Or failing him / her

Name :

E-Mail :

Address :

Signature

As my / our proxy to attend and vote (on a poll) for me / us and on my / our behalf at the 38th Annual General Meeting of the Company, to be held on Friday, September 26, 2014 at 2.00 p.m. at the Registered Office of the Company, Administration Building, Essar Refinery Complex, Okha Highway (SH – 25), Taluka Khambhalia, District Jamnagar, Gujarat 361 305 and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution Number

Resolution Vote (Optional - see Note 2)(Please mention number of shares)

For Against Abstain

Ordinary business

1. Adoption of Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Auditors for the financial year ended March 31, 2014

2. Approval of dividend for the financial year ended March 31, 2014

3. Appoint a Director in the place of Shri. Deepak Kumar Varma (DIN No. 00213394), who retires by rotation and being eligible, seeks re-appointment

4. Appoint a Director in the place of Shri. Rajiv Agarwal (DIN No. 00903635), who retires by rotation and being eligible, seeks re-appointment

5. Appoint a Director in the place of Shri. Jan Adam (DIN No. 05287357), who retires by rotation and being eligible, seeks for re-appointment

6. Re-appoint Messrs. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registration No. 117365W

Special business

7. Appoint Shri. Kjaedegaard (DIN 00529039) as a Director liable to retire by rotation

8. Re-appoint Shri. K. K. Sinha (DIN 00009113) as a Wholetime Director liable to retire by rotation

9. Appoint Shri. Amardeep Singh Bali (DIN 02207863) as a Director and Wholetime Director

10. Issue of Bonds and other debt instruments in domestic and foreign markets for an amount not exceeding US$ 1,000,000,000.00

11. Adopt revised Articles of Association of the Company

12. Borrow in excess of the paid-up share capital and pre reserves of the Company

Sighed this day of 2014.

Signature of the member Signature of the proxy holder(s)

Notes:

1. This form, in order to be effective, should be duly stamped, completed, signed and deposited at the registered office of the Company, not less than 48 hours before the meeting.

2. It is optional to indicate your preference. If you leave the for, against or abstain column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he / she may deem appropriate.

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