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Directors Report of Essar Ports Ltd. Company
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Directors Report of Essar Ports Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Thirty-Ninth Annual Report of your Company together with the Audited Accounts for the year ended March 31,2015.

1. FINANCIAL RESULTS

The summary of consolidated and standalone financial results of your Company for the year ended March 31, 2015 are furnished below:

(Rs. in crore)

Consolidated

Particulars For the year For the year ended March 31 ended March 31 2015 2014

Total Revenue 1,776.94 2,214.88

Total Expenses 361.15 887.76

EBITDA 1,415.79 1,327.12

Profit / (Loss) for the year 391.20 383.74

Standalone

Particulars For the year For the year ended March 31 ended March 31 2015 2014

Total Revenue 88.40 84.26

Total Expenses 52.14 52.22

EBITDA 36.26 32.05

Profit / (Loss) for the year 0.60 (25.75)

2. DIVIDEND

Since your Company have committed capital expenditure which necessitates the operating profits to be ploughed back towards CAPEX, your Directors have not recommended any dividend for the year ended March 31, 2015.

4. RISK MANAGEMENT & INTERNAL CONTROL

Implementation and operation of port and terminal facilities are dependent on various regulatory approvals and government policies. Changes in macro economic factors like inflation, interest rate, world trade and natural 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.

Your Company has a Risk Assessment and Mitigation procedure in place. Major risks identified by the businesses and functions if any are systematically addressed through mitigating actions on a continuing basis.

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested by the Internal Auditor and cover all key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.

The details of foreign exchange earnings and outgo as required under Section 134 and Rule 8(3) of Companies (Accounts) Rules, 2014 are mentioned below:

Foreign Exchange Earnings & Outgo

(Rs. crore)

For the year ended Particulars 31st March, 2015

Foreign Exchange earnings 2.29

Foreign Exchange outgo 18.53

5. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee. The composition and terms of reference of the Corporate Social Responsibility Committee is provided in the Corporate Governance Report.

Your Company has also formulated a Corporate Social Responsibility Policy which is available on the websites of the Company at www.essar.com and www.essarports.com. The Company statutorily is not required to incur CSR spend, as the Company has negative profits. The Company has initiated CSR activities through its subsidiaries. Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure to this Report.

6. BOARD INDEPENDENCE

Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, all Independent Directors comply with the Independence criteria in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013.

7. DIRECTORS, APPOINTMENT AND TENURE

The Directors of the Company are appointed by Members at the General Meetings. In accordance with the Articles of Association of the Company two-third of the Directors of the Board are liable to retire by rotation. Out of this, one-third of the eligible Directors retire every year. The appointment and tenure of Independent Directors are consistent with the Companies Act, 2013 and the Listing Agreement.

Shri. P K. Srivastava (DIN 00843258) retires at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-appointment.

Smt. S. Gayathri (DIN 07115908) has been appointed as an Additional Director on March 30, 2015. The Company has received notice from a member proposing the appointment of Smt. Gayathri as a Director of your Company.

It is propsed to appoint Shri. Dilip J. Thakkar (DIN 00007339), Shri. T S. Narayanasami (DIN 01786981), Shri. Deepak Kumar Varma (DIN 00213394), Shri. N. C. Singhal (DIN 00004916), Shri. Michael Pinto (DIN 00021565), Dr. Jose Paul (DIN 01256347) and Shri. Jesper Kjaedegaard (DIN 00529039) as Independent Directors for a consecutive period of three years from the date of the ensuing Annual General Meeting.

Shri. Jan Adam has resigned from the directorship of your Company with effect from December 19, 2014. Your Board places on record its appreciation for the valuable contributions made by Shri. Adam in the growth and progress of the Company during his tenure as Director.

8. HUMAN RESOURCE

Human 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 ports facilities of the Company being implemented by subsidiaries. Your Company is known for developing future leaders and having the best people practices. This coupled with the ability to attract the best talent, provides a competitive edge to the organisation.

9. INFORMATION TECHNOLOGY

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

10. SUBSIDIARIES

As on March 31, 2015, the following were the subsidiaries of your Company:

1. Vadinar Oil Terminal Limited

2. Vadinar Ports & Terminals Limited

3. Essar Vizag Terminals Limited

4. Essar Bulk Terminal Limited

5. Essar Bulk Terminal Paradip Limited

6. Essar Bulk Terminal (Salaya) Limited

7. Essar Paradip Terminals Limited

8. Petro Tankages India Limited

9. Essar Dredging Limited

10. Vadinar Liquid Terminals Limited

11. AUDITORS

Your Company''s Auditors, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Since Messrs. Deloitte Haskins & Sells have been functioning as Auditors of your Company for more than ten years, as per Section 139 of the Companies Act, 2013, they can be appointed for a maximum period of further two years.

Suitable resolution for their re-appointment has been included in the Notice convening the ensuing Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company forms part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

12. CORPORATE GOVERNANCE

During the year, your Company has adopted new policies and amended existing policies such as Policy on Related Party Transactions, CSR Policy, Whistle Blower Policy, Policy on Material Subsidiaries and Prevention of Sexual Harassment Policy in line with new governance requirements. These policies are available on the websites of the Company at www.essar.com and www.essarports.com.

A separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Equity Listing Agreement with the Stock Exchange(s).

13. DISCOLSURES WITH RESPECT TO THE REMUNEATION UNDER SECTION 197 OF THE COMPANIES ACT, 2013

A statement of Disclosure of Remuneration Under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and forms part of this Report.

The details of Sitting Fees paid to the Independent Directors for attending the Meetings of the Board and its Committees and the remuneration paid to the Managing Director and the Wholetime Directors are furnished in the Corporate Governance Section of this report.

14. SECRETARIAL AUDIT REPORT

During the year, your Company has undertaken the Secretarial Audit for the year 2014-15, which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Agreement and Regulations and Guidelines prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999.

The Secretarial Audit was carried out by CS. Martino Ferrao of M/s. Martinho Ferrao Associates, Company Secretaries, the Secretarial Auditor of the Company for the financial year 2014- 15. The detailed report on Secretarial Audit is appended as an Annexure to this Report.

15. EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report.

16. AFFIRMATION AND DISCLOSURE

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 have affirmed their compliance with the Code of Conduct as on March 31, 2015 and a declaration to that effect, signed by the Managing Director & CEO, is attached and forms part of this Report.

17. BOARD EVALUATION

The Nomination and Remuneration Committee of the Company has approved an evaluation policy, which was adopted by the Board of Directors. The policy provides for evaluation of the Board,the Committees of the Board and individual Directors, including the Chairman of the Board. The Policy provides that evaluation of the performance of the Board, Board Committees and Directors shall be carried out on an annual basis. Your Company has initiated the process of Board evaluation which is underway The results of the evaluation will be shared with the Board, post which action plan will be drawn to improve the identified parameters.

18. RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 and Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s websites at www.essar.com and www.essarports.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm''s Length basis. The disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is annexed to this report.

19. DISCLOSURES PURSUANT TO CLAUSE 32 OF THE LISTING AGREEMENT AND SECTION 186 OF THE COMPANIES ACT, 2013

Details of loans, guarantee or investments made by your Company under Section 186 of the Companies Act, 2013 during the financial year 2014-15 are appended as Annexure to this Report.

20. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statements relate and the date of this Report.

21. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'') and Rules made thereunder, your Company has framed the Policy for Prevention of Sexual Harassment.

22. STATEMENT OF DIRECTORS RESPONSIBILITIES

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013 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 had been followed along with proper explanation relating to material departures;

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

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) the Company had laid down internal financial controls to be followed by the companies and that such internal financial controls are adequate and were operating effectively; and

f) Proper systems are in place to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

23. 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

Mumbai Rajiv Agarwal A. S. Bali August 13, 2015 Managing Director Director Finance


Mar 31, 2014

To the Members of Essar Ports Limited

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

I.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 Standalone

For the For the For the For the year ended year ended year ended year ended March 31, March 31, March 31, March 31, 2014 2013 2014 2013

Total Revenue 2,214.89 1,448.59 84.26 74.19

Total Expenses 887.76 280.72 52.22 32.42

Profit before exceptional items, finance costs, tax, 1,327.13 1,167.87 32.04 41.77 depreciation and amortisation

Less: Finance costs 599.09 524.77 51.70 72.47

Less: Depreciation and amortisation 277.21 244.03 7.59 7.62

Profit/(Loss) before exceptional item and tax 450.83 399.07 (27.25) (38.32)

Less: Exceptional item - Net gain on sale of non-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 0.05

Profit /(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.

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.

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

IS014001:2004 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

IS014001:2004 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 FRAMEWORK

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

6. HUMAN RESOURCE

Human resources have always been the key to success of your Company''s business. 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 TECHNOLOGY

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

8. SUBSIDIARIES

As on March 31, 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) Limited

8. Essar Paradip Terminals Limited

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

9. DIRECTORS

In accordance with the provisions of the Companies Act,1956 and the Articles of Association of the Company, 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. AUDITORS

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

The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.

11. CORPORATE GOVERNANCE

The Company has complied with the requirements under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors'' Report under the head "Corporate Governance".

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

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

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 EMPLOYEES

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

14. STATEMENT OF DIRECTORS RESPONSIBILITIES

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 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 forthe 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 Sawa

Managing Director Director Finance

Mumbai

May 15, 2014


Mar 31, 2013

To the Members of Essar Ports Limited

The Directors take pleasure in presenting the Thirty-Seventh Annual Report of your Company together with Audited Accounts for the year ended March 31, 2013.

1. FINANCIAL RESULTS

The summary of consolidated and standalone financial results of your Company for the year ended March 31, 2013 are furnished below:

(Rs. in crore)

Particulars Consolidated Standalone

For the For the For the For the year ended year ended year ended year ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012

Total Revenue 1,434.64 1,131.06 70.83 52.56

Total Expenses 280.72 217.85 29.06 23.52

Profit before exceptional items, finance costs, 1,153.92 913.21 41.77 29.04 tax, depreciation and amortisation

Less: Finance Costs 510.82 420.81 72.47 92.40

Less: Depreciation and amortisation 244.03 220.24 7.62 7.40

Profit / (Loss) before exceptional item and tax 399.07 272.16 (38.32) (70.76)

Less: Exceptional item - 235.51 - -

Profit / (Loss) after exceptional item and 399.07 36.65 (38.32) (70.76) before tax

Less: Provision for tax 64.47 (62.19) 0.05 (0.23)

Profit / (Loss) before Share of minority 334.60 98.84 (38.37) (70.99) interest

Less: Share of minority interest 3.05 34.89 - -

Profit / (Loss) for the year 331.55 63.95 (38.37) (70.99)

2. DIVIDEND

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

3. 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 completed 2,380 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;

- 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 FRAMEWORK

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

6. HUMAN RESOURCE

Human resources have always been the key to success of your Company''s business. 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. Your Company has introduced technology-enabled HR practices in Performance Management and Training to streamline and strengthen these practices.

7. INFORMATION TECHNOLOGY

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

8. SUBSIDIARIES

As on March 31, 2013, the following were the subsidiaries of your Company:

1. Vadinar Oil Terminal Limited (VOTL)

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

3. Essar Bulk Terminal Limited (EBTL)

4. Essar Bulk Terminal Paradip Limited (a subsidiary of EBTL)

5. Essar Bulk Terminal (Salaya) Limited

6. Essar Paradip Terminals Limited

7. Essar Dredging Limited

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

9. DIRECTORS

In accordance with the provisions of the Companies Act,1956 and the Articles of Association of the Company, Shri. Dilip J. Thakkar, and Shri. T. S. Narayanasami retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

Shri. P. K. Srivastava has been appointed as an Additional Director on October 16, 2012. The Company has received a notice from a member proposing the appointment of Shri. Srivastava as a Director of your Company.

Shri. N. C. Singhal, Dr. Jose Paul and Shri. Michael Pinto have been appointed as an Additional Directors on July 18, 2013. The Company has received notice from members proposing the appointment of Shri. N. C. Singhal, Dr. Jose Paul and Shri. Michael Pinto as Directors of your Company.

Your Board would like to inform the members about the sad demise of Shri. K. V. Krishnamurthy who left for heavenly abode on January 16, 2013 after being associated with your Company as Director for about 4 years. Your Board places on record its appreciation for the invaluable contributions made by Shri. Krishnamurthy during his tenure as Director.

Shri. Anshuman Ruia resigned from the directorship of your Company on October 16, 2012. Your Board also place on record their appreciation for the invaluable contribution made by Shri. Ruia in the growth and progress of the Company during his tenure as Director.

10. AUDITORS

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

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

11. CORPORATE GOVERNANCE

The Company has complied with the requirements under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors'' Report under the head "Corporate Governance".

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

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

Foreign Exchange:

(1) Earned (including freight, : Rs. 603.35 lacs. charter, hire earnings, interest income, etc.)

(2) Used (including loan : Rs. 1,526.91 lacs. repayments, interest, operating expenses, etc.)

13. PARTICULARS OF EMPLOYEES

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

14. STATEMENT OF DIRECTORS RESPONSIBILITIES

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that:

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

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

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

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

15. APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their sincere thanks and appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company.

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

For and on behalf of the Board

Rajiv Agarwal Shailesh Sawa

Managing Director Director Finance

Mumbai

July 18, 2013


Mar 31, 2012

To the Members of Essar Ports Limited

The Directors take pleasure in presenting the Thirty-Sixth Annual Report of your Company together with Audited Accounts for the year ended March 31, 2012.

1. FINANCIAL RESULTS

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

(Rs. in crore)

Particulars Consolidated Standalone

For the For the For the For the year ended year ended year ended year ended March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011

Total Income 1,131.06 2,086.12 52.56 659.36

Total Expenditure 217.85 1,174.10 23.52 378.55

EBITDA 913.21 912.02 29.04 280.81

Less: Interest & Finance charges 420.81 473.75 92.40 184.07

Less: Provision for Depreciation 220.24 320.83 7.40 59.87

Profit before exceptional item 272.16 117.44 (70.76) 36.87

Less: Exceptional item 235.51 - - -

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

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

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

Less: Share of Minority Interest 34.89 12.69 - -

Profit after Tax 63.95 70.15 (70.99) 20.87

Note: The consolidated and standalone financial figures for the year ended March 31, 2011 include the figures attributable to the demerged shipping & logistics and oilfields services businesses upto September 30, 2010 and hence are not comparable with the figures for the year ended March 31, 2012.

2. DIVIDEND

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

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 completed 2,000 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 14001:2004 Environment

Management System by Det Norske Veritas (DNV)

ISO 18001:2007 OHSAS by DNV

ISO 28000:2007 Security Management System by ABS

OCIMF Terminal Baseline Criteria

certification by ABS

- 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 FRAMEWORK

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

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

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

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

8. SUBSIDIARIES As on March 31, 2012, the following were the subsidiaries of your Company:

1. Vadinar Oil Terminal Limited (VOTL)

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

3. Essar Bulk Terminal Limited

4. Essar Bulk Terminal (Salaya) Limited

5. Essar Paradip Terminals Limited

6. Essar Bulk Terminal Paradip Limited

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

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

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

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

10. AUDITORS

Your Company's Auditors, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company hold Office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

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

11. CORPORATE GOVERNANCE

The Company has complied with the requirements under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors' Report under the head "Corporate Governance".

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

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

Foreign exchange earnings and outgo are summarised below:

Total Foreign Exchange:

(1) Earned (including freight, charter, : Rs. 7.98 crore hire earnings, interest income, etc.)

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

13. PARTICULARS OF EMPLOYEES

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

14. STATEMENT OF DIRECTORS RESPONSIBILITIES Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that:

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

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

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

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

15. APPRECIATION AND ACKNOWLEDGEMENTS Your Directors express their sincere thanks and appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company.

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

For and on behalf of the Board

Rajiv Agarwal Shailesh Sawa

Managing Director Director Finance

Mumbai May 30, 2012


Mar 31, 2011

To the Members of Essar Ports Limited

The Directors take pleasure in presenting the Thirty-fifth Annual Report of your Company together with Audited Accounts for the year ended March 31, 2011. Pursuant to the provisions of Section 219 of the Companies Act, 1956 and as permitted by the Securities and Exchange Board of India (SEBI), the abridged annual accounts of the Company are enclosed. Any member interested in obtaining a copy of the unabridged accounts may write to the Company Secretary at the Registered Office.

1. FINANCIAL RESULTS:

The summary of the standalone and consolidated financial results of your Company for the year ended March 31, 2011 are furnished below:

The consolidated and standalone financial results for the year ended March 31, 2011 are presented after giving effect to the demerger of the shipping & logistics and oilfields drilling business effective October 1, 2010, hence previous year figures are not comparable.

(Rs. crore)

Consolidated Standalone

For the For the For the For the Particulars year year year Year ended ended ended ended 31.03.2011 31.03.2010 31.03.2011 31.03.2010

Total Income 2,086.13 3,092.14 659.36 1,132.80

Total Expenditure 1,174.10 1,985.64 378.55 705.56

EBITDA 912.03 1,106.50 280.81 427.24

Less: Interest & Finance charges 473.76 537.35 184.07 218.69

Less: Provision for Depreciation 320.83 446.94 59.87 119.51

Profit before Tax 117.44 122.21 36.87 89.04

Less: Provision for Tax (34.60) (27.01) 16.00 (0.96)

Profit before Share of Minority Interest 82.84 95.20 20.87 90.00

Add: Share of Minority Interest (loss) 12.69 (1.43) - -

Profit after Tax 70.15 93.77 20.87 90.00

2. SCHEME OF ARRANGEMENT

Your Company has successfully implemented the Scheme of Arrangement whereby Essar Ports & Terminals Limited and Essar International Limited got amalgamated with your Company and the Shipping & Logistics and Oilfields Drilling businesses were demerged into a separate company viz. Essar Shipping Limited.

The Demerger will enable your Company to focus on the Ports and Terminals Business which has tremendous growth and profitability potential and which requires focused leadership and management attention. The Scheme has resulted in focused business operations of the Company and will give the Company increased flexibility In taking advantage of the huge growth opportunities in the business segments it operates in. With the amalgamation, all the port and terminal operating companies have become direct subsidiaries of your Company.

Pursuant to the Scheme and in order to reflect the activities carried on by your Company In its name, the name of your Company was changed to Essar Ports Limited effective May 13,2011.

The authorised share capital of the Company stands reduced by an amount of Rs. 500,00,00,000/- to Rs. 1050,00,00,000/-.

The issued, subscribed and paid up share capital of the Company stands reduced by an amount of Rs. 205,22,77,680/- to Rs. 410,58,60,771/- (includes Rs. 13,05,251/- towards forfeited shares).

Every member holding shares in the Company as on the record date has been issued shares in the Company and Essar Shipping Limited (the Resulting Company).

3. DIVIDEND

Your Company operates in the ports & terminals sector which is highly capital intensive in nature. Your Company is implementing various port projects through its subsidiaries at Hazira and Salaya in Gujarat and Paradip in Orlssa which necessitates that the resources be ploughed back into these projects. With a view to conserving resources for these requirements, your Directors have not recommended any dividend for the year ended March 31, 2011.

8. INFORMATION TECHNOLOGY

Your Company has successfully implemented SAP in its financial and related systems. For Bulk as well as Oil Terminals, system has 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 will be implemented in the system for Berth performance and resource monitoring.

9. SUBSIDIARIES:

Post the Scheme of Arrangement, following are the subsidiaries of your Company:

1. Vadinar Oil Terminal Limited (VOTL)

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

3. Essar Bulk Terminal Limited (EBTL)

4. Essar Bulk Terminal (Salaya) Limited (EBTSL)

5. Essar Paradip Terminals Limited (EPTL)

6. Essar Bulk Terminal Paradip Limited (EBTPL)

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.

10. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Dilip J. Thakkar, Mr. R. N. Bansal and Mr. Anshuman Ruia retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

Mr. N. Srinivasan, Mr. A. R. Ramakrishnan, Mr. V Ashok and Mr. S. V. Venkatesan have resigned from the directorship of your Company during the year. Your Board places on record their appreciation for the valuable contribution made by these Directors in the progress of the Company.

Mr. Shailesh Sawa and Mr. K. K. Sinha have been appointed as Additional Directors in the wholetime employment of the Company designated as Director Finance and Chief Executive Officer respectively. Mr. T S. Narayanasami, has been appointed as an Additional Independent Director. The Company has received notices from members proposing the appointment of Mr. Sawa, Mr. Sinha and Mr. Narayanasami as Directors of the Company.

11. AUDITORS

Your Company's Auditors, Messrs. Deloltte Haskins & Sells, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and have expressed their inability to be appointed as Statutory Auditors. It is proposed to appoint Messrs. Deloltte Haskins & Sells, Chartered Accountants, Ahmedabad as the Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting. The Company has received a notice from a member proposing the name of Messrs. Deloltte Haskins & Sells, Ahmedabad as Statutory Auditors.

12. CORPORATE GOVERNANCE

The Company has complied with the requirements under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors' Report under the head "Corporate Governance".

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

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

Foreign exchange earnings and outgo are summarised below:

Total Foreign Exchange:

(1) Earned (including : Rs. 131.10 crore freight, charter hire earnings, interest Income, etc.)

(2) Used (Including : Rs. 366.44 crore loan repayments, interest, operating expenses, etc.)

Your Company has obtained exemption from the Centra) Government under Section 211(4) of the Companies Act, 1956 from giving Information required under clauses (a), (b), (c) and (e) of Paragraph 4-D of Part II of Schedule VI to the Companies Act, 1956 vide Order no. 46/60/2011-CL- III dated February 15, 2011.

14. PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies

Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the Annexure forming part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees 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.

15. STATEMENT OF DIRECTORS RESPONSIBILITIES

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 the Board of Directors hereby state that:

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

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

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

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

16. APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their sincere thanks and appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company.

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

For and on behalf of the Board

RAJIV AGARWAL R. N. BANSAL

CEO & Managing Director Director

Mumbai

July 4, 2011









 
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