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Essar Ports Ltd. Notes to Accounts, Essar Ports Ltd. Company
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Notes to Accounts of Essar Ports Ltd.

Mar 31, 2015

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 120 MTPA across facilities located at Vadinar and Hazira in the State of Gujarat on the west coast of India, Paradip in the State of Odisha and Visakhapatnam in the State of Andhra Pradesh on the east coast of India. The facilities at Vadinar, Hazira, Paradip and Visakhapatnam 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 194 MTPA with expansion projects at Hazira, a new port at Salaya in Gujarat, one terminal at Paradip and one iron ore berth 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. SHARE CAPITAL

(a) Terms of / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each share holder of equity share is eligible to one vote per share held. 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.

(b) 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, 740,334 and 1,292,746 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 respectively per 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, 2,033,080 options were outstanding as on 31 March 2015.

(c) 5% Foreign Currency Convertible Bonds are convertible into 20,475,463 equity shares at the option of the holders, (as at 31 March 2014, 20,475,463 equity shares) of Rs. 10/- each at Rs. 91.70 per share (refer footnote (ii) to note 5).

3. CONTINGENT LIABILITIES (TO THE EXTEND NOT PROVIDED FOR) Rs. in lakhs

As at As at Particulars 31 March,2015 31 March,2014

Guarantees given on behalf of subsidiaries against their 264,686.00 207,686.00 borrowings #

Total 264,686.00 207,686.00

# Guarantees have been given for business purpose

4. COMMITMENTS

As per the borrowing agreements of subsidiaries with banks and financial institutions, the Company has commitment to invest Rs. 20,970.08/- lakhs (previous year Rs. 12,108.94/- 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 project developed by its subsidiaries below 51% till maturity of the loan.

5. DETAILS OF LEASING ARRANGEMENTS - ASSETS TAKEN ON OPERATING LEASES

The Company expects to receive future minimum sublease payments of Rs. 353.43 lakhs (previous year Rs. 494.80 lakhs) as on 31 March 2015. A sum of Rs. 141.37 lakhs (previous year Rs. 141.37 lakhs) has been recognised in Statement of Profit and Loss as rent and sublease income during the year.

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

7. 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.

8. EMPLOYEE BENEFITS :

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

II. Defined benefit plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

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

9. Actuarial assumptions

i) Mortality rates considered are as per the published rates in India Assured Lives Mortality (2006-08) (modified) Ultimate.

ii) Leave policy:

a) Sick Leave cannot be accumulated or en-cashed and will lapse every year in the month of December.

b) Leave balance as at 31 December 2015 to the extent not availed by the employees is available for encashment on separation from the Company upto a maximum of 120 days.

iii) The expected contribution to be made by the Company for funding it liability for gratuity during the financial year 2015- 16 will be Rs. 2 lakhs and actual contribution will be made as per demand raised by the fund administrator Life Insurance Corporation of India.

iv) 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.

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

vi) 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.

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

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

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

10. RELATED PARTY RELATIONSHIPS, TRANSACTIONS AND BALANCES

a) Holding companies :

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

ii) Essar Shipping & Logistics Limited, Cyprus, (intermediate holding company) (immediate holding company till 27 March 2015)

iii) Essar Ports & Shipping Mauritius Limited, Mauritius (intermediate holding company) (from 27 March 2015)

iv) Essar Ports & Shipping HoldCo Limited, Mauritius (intermediate holding company) (from 27 March 2015)

v) Essar Ports & Shipping Jersey Limited, Jersey (intermediate holding company) (from 27 March 2015)

vi) Essar Ports & Shipping Limited, Mauritius (immediate holding company) (from 27 March 2015)

b) Subsidiaries:

i) Essar Bulk Terminal Limited

ii) Vadinar Oil Terminal Limited

iii) Vadinar Ports & Terminals Limited

iv) Essar Bulk Terminal (Salaya) Limited

v) Essar Bulk Terminal Paradip Limited

vi) Essar Paradip Terminals Limited

vii) Essar Dredging Limited

viii) Essar Vizag Terminals Limited

ix) Petro Tankages India Limited

x) Vadinar Liquid Terminal Limited ( from 15 February 2015)

c) Key management personnel :

(i) Rajiv Agarwal, CEO & Managing Director

(ii) Kamala Kant Sinha, CEO

(iii) Shailesh Sawa, Director Finance (upto 15 May 2014)

(iv) Amardeep Singh Bali, Director Finance (w.e.f 15 May 2014)

d) Fellow subsidiaries where there have been transactions:

(i) Aegis Limited

(ii) Essar Africa Holdings Limited

(iii) Essar Logistics Limited

(iv) Essar Shipping Limited

(v) Essar Oil Limited

(vi) Essar Power Gujarat Limited

(vii) Essar Offshore Subsea Limited

(viii) Equinox Business Parks Private Limited

(ix) New Coal Terminal Beira, S.A

11. GOING CONCERN

As on 31 March, 2015, the Company’s current liabilities exceeded its current assets by Rs. 33,813.05 lakhs. The management has plans of addressing this defilit from internal accruals and certain other transactions for which no material uncertainly exists. Accordingly, the financial statements have been prepared on a going concern basic.

12. EMPLOYEE STOCK OPTION SCHEME

Since the market price of the shares underlying the option granted and the exercise price of the option (being the intrinsic value of the option) is same, the disclosure for change in EPS in fair value and Intrinsic value of the options are not given.

13. During the year 2013-14, the Company has sold 100,000,000, 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal (Salaya) Limited and 17,200,000, 0.01% optionally convertible redeemable cumulative preference share 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 Statement of profit and loss.

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


Mar 31, 2014

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 Contingent liabilities Rs. in lakhs

Particulars As at 31 March 2014 As at 31 March 2013

Guarantees given on behalf of subsidiaries against borrowings 2,07,686.00 1,54,460.00

Total 2,09,286.00 1,56,060.00

3 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 hascommited not to dilute its investments in any of the port and terminal project developed by its subsidiaries below 51% till maturity of the loan.

II. Defined benefit plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

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.

4. Related party relationships, transactions and balances

a. 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 Limited

iii. Vadinar Ports & Terminals Limited

iv. Essar Bulk Terminal (Salaya) Limited

v. Essar Bulk Terminal Paradip Limited

vi. 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 Limited

ii. Essar Africa Holdings Limited

iii. Essar Logistics Limited

iv. Essar Shipping Limited

v. Essar Oil Limited

vi. Essar Power Gujarat Limited

vii. Essar Offshore Subsea Limited

viii. Equinox Business Parks Private Limited


Mar 31, 2013

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 is in the process of increasing its aggregate ports capacity to 158 MtPa with expansion projects at Hazira, a new port at Salaya in Gujarat, and one terminal at Paradip. The ports expansion projects have been undertaken, in part, to accommodate the increase in traffic expected to arise from plant expansions planned to be carried out by the Company''s affiliated customers, and in part to support the increase in business from non-affiliated customers being targeted by the Company.

2 Commitments

As per the borrowing agreement of subsidiaries with banks and financial institutions, the Company has commitment to invest Rs. 28,897.15 lakhs (previous year Rs. 23,467.15 lakhs) into the projects of subsidiaries. Under the agreements with lenders, the Company shall not dilute its investment in any of the port project developed by it below 51% till maturity of the loan.

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

4 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.

5 Employee benefits :

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

I. Defined contribution plans

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

II. Defined benefit plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

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

6 Related party relationships, transactions and balances

a) 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 Limited

iii) Vadinar Ports & Terminals Limited

iv) Essar Bulk Terminal (Salaya) Limited

v) Essar Bulk Terminal Paradip Limited

vi) Essar Paradip Terminals Limited

vii) Essar Dredging Limited ( w.e.f 1 October 2012)

c) Key management personnel :

(i) Rajiv Agarwal, CEO & Managing Director

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

(iii) Shailesh Sawa, Director Finance

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

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

(i) Aegis Limited

(ii) Essar Africa Holdings Limited

(iii) Essar Logistics Limited

(iv) Essar Shipping Limited

(v) Essar Steel India Limited

(vi) Futura Travels Limited *

(vii) Equinox Business Parks Private Limited

* ceased to be related parties w.e.f. 1 April 2012 in terms of AS 18 in view of current set of relationship of directors / key managerial personnel.

7 Going concern

As on 31 March 2013, the Company''s current liabilities exceeded its current assets by Rs. 50,079.57 lakhs. The management has plans of addressing this deficit from internal accruals, by rolling over / rescheduling of term loans, selling stake in a subsidiary without losing control and certain other transactions for which no material uncertainty exists. Accordingly, the financial statements have been prepared on a going concern basis.

8 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.

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


Mar 31, 2012

1. COMPANY PROFILE

Essar Ports Limited (EPL / Company) develops and operates ports and terminals and is one of the largest private sector port company in India. EPL is India's second-largest, private-sector port and terminal company by capacity and throughput.

EPL is part of the multinational Essar Group, and holds the Group's entire ports business. It is listed on the BSE Limited and the National Stock Exchange of India Limited (NSE). The Company, which was previously named Essar Shipping Ports & Logistics Limited (ESPLL), recently went through a demerger process, following which the shipping, logistics and Oilfield drilling businesses were demerged from ESPLL and transferred to another company, Essar Shipping Limited, which is also listed on Indian stock exchanges.

EPL through its subsidiaries develops and operates ports and terminals for handling liquid, dry bulk, break bulk and general cargo, with an existing aggregate capacity of 88 MTPA across two facilities located at Vadinar and Hazira in the State of Gujarat on the west coast of India.

The facilities at Vadinar and Hazira are used primarily by affliated customers for the receipt of raw materials such as crude oil, iron ore / pellets, limestone, dolomite and coal, and for the dispatch of fnished goods such as petroleum products and steel products.

EPL is in the process of increasing its aggregate ports capacity to 158 MTPA with expansion projects at Vadinar and Hazira, a new port at Salaya in Gujarat, and two terminals at Paradip in the State of Odisha on the east coast of India. The ports expansion projects have been undertaken, in part, to accommodate the increase in traffic expected to arise from plant expansions planned to be carried out by the Company's affliated customers, and in part to support the increase in business from non-affliated customers being targeted by the Company.

2 LONG TERM BORROWINGS

i) Secured rupee term loan from financial institution carries interest @ (base rate - 3.75%) per annum (as at March 31, 2012 - 13.75% p.a.) and is repayable in 12 monthly instalments of Rs. 1,666.67 lakhs each. Repayment starts from July 31, 2013. The loan is secured against movable fixed assets and all the cash flows including dividend and receivables of the Company.

ii) Foreign Currency Convertible Bonds carries interest @ 5% per annum payable semi annually. The bonds are convertible into equity shares of the Company, any time upto the date of maturity at the option of the bond holders at conversion price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per USD. The bonds if not converted till the maturity date will be redeemed at par.

iii) Unsecured rupee term loan from financial institutions carry interest rate of 13% per annum, repayable on April 1, 2012. Essar Shipping & Logistics Limited has given corporate guarantee of Rs. 30,000 lakhs.

iv) Unsecured rupee term loan of previous year from banks carry interest @ (base rate - 3.75%) per annum, repaid on July 1, 2011.

3 COMPOSITE SCHEME OF ARRANGEMENT

The Hon'ble High Court of Gujarat at Ahmedabad vide order dated March 1, 2011 approved the Composite Scheme of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports & Terminals Limited (EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).

The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics Business and the Oilfields Services Business into ESL.

Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are based on financial statements as on September 30, 2010.

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

In consideration of the demerger, for every three equity shares held by a member as on the record date, the Company allotted two equity shares of Rs.10/- each as fully paid up to the eligible members of ESPLL whose name were recorded in the register of members as on May 21, 2011.

4 DEFERRAL / CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification issued by the Central Government under Companies (Accounting Standards) Amendment Rules, 2009 dated March 31, 2009; the exchange differences arising on conversion / translation / settlement of long- term foreign currency monetary items in so far as they relate to the acquisition of a depreciable capital asset, has been added to or deducted from the cost of the respective asset and has been depreciated over the remaining balance life of the asset. In case of exchange difference related to any other long-term foreign currency monetary item, the exchange difference is accumulated in the "foreign currency monetary item translation difference account", (FCMITDA) and is amortised over the balance period of such long term monetary item but not beyond accounting period ending on or before March 31, 2020 .The following is the effect of the option exercised:-

5 CONTINGENT LIABILITIES (Rs. in lakhs)

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

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

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

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

6 SEGMENT REPORTING

a) Business Segment

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

b) Geographical segment

The Company's feet operations are managed on a worldwide basis from India. Fleet operating and chartering earnings based on the geographical location of customers:

7 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE A) Derivative contracts outstanding as at the Balance sheet are as follows:

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

8 EMPLOYEE STOCK OPTION SCHEME

a) The members of the Company at the Annual General Meeting held on September 9, 2011 have approved the issue of Employee Stock Options under the "Essar Ports Employee Stock Options Scheme - 2011" (hereinafter referred to as the Scheme). The Scheme shall be operated and administered under the superintendence of the Remuneration Committee of the Board.

Eligible Employees of the Company, its holding company and subsidiaries are entitled to Options under the Scheme. Each Option entitles the Eligible Employees to one underlying equity share of the Company.

A trust will be formed for the administration of the Scheme. The Remuneration Committee is authorised to grant the Options to the Eligible Employees and the Exercise Price of the Options in terms of the Scheme. 1/3rd of the options granted will vest in the hands of the eligible employees over a period of 3 years commencing from the end of the 3rd, 4th and 5th year respectively of the date of grant of the Option. The Eligible Employees can exercise the options vested in them within a period of 7 years from the date of vesting.

9 GOING CONCERN

As on March 31, 2012, the Company's current liabilities exceeded its current assets by Rs. 59,744.01 lakhs due to classification as current of borrowings amounting to Rs. 30,000 lakhs repayable within the next one year, Rs. 4,568.55 lakhs payable for purchase of capital assets and Rs. 18,587.80 lakhs payable for purchase of investment. Subsequent to year end, the Company has rolled over loans of Rs. 30,000 lakhs for a period exceeding 12 months. The Company is also in discussion for raising additional funds through equity . As such, the excess current liabilities position will not affect the operations of the Company and therefore these financial statements have been prepared as a going concern.

10 EMPLOYEE BENEFITS

The Company has classified the various Benefits provided to employees as under: I. defined contribution plans

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

II. defined beneft plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

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

32 RELATED PARTY TRANSACTIONS:

a) Holding companies :

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

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

b) Subsidiaries:

i) Essar Bulk Terminal Limited

ii) Vadinar Oil Terminal Limited

iii) Vadinar Ports & Terminals Limited

iv) Essar Bulk Terminal (Salaya) Limited

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

vi) Essar Paradip Terminals Limited

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

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

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

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

c) Key Management Personnel

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

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

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

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

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

(vi) Mr. Sanjay Mehta, Managing Director (upto July 24, 2010) d) Fellow subsidiaries / other related parties / affliate where there have been transactions:

(i) Aegis Limited

(ii) Arkay Holdings Limited

(iii) Imperial Consultants & Securities Pvt. Ltd.

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

(v) Essar Agrotech Limited

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

(vii) Essar Energy Holdings Limited

(viii) Essar House Limited

(ix) Essar Infrastructure Services Limited

(x) Essar Information Technology Limited

(xi) Essar Investments Limited

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

(xiii) Essar Oil Limited

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

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

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

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

(xviii) Essar Steel Hazira Limited

(xix) Futura Travels Limited

11 The Company has not received any intimation from the suppliers regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence the disclosures required by the Act have not been made. The Company is making efforts to get confirmations from the suppliers as regards their status under the Act.

12 In view of exemption from Central Government obtained by the Company under section 211(4) of the Companies Act, 1956 vide order number 46/60/2011-CL-III dated 15.02.2011, information required under sub-clauses (a), (b), (c) and (e) of paragraph 4-D of part II of schedule VI to the Companies Act, 1956, is not given.

13 The Current year figures are not comparable with the previous year figures as the figures for the previous year includes the operations of the shipping business up to September 30, 2010 before it was demerged into Essar Shipping Limited pursuant to the Composite Scheme of Arrangement with effect from the appointed date of October 1, 2010.

14 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification as per the requirement of the Revised Schedule VI notified under the Companies Act, 1956.


Mar 31, 2011

1) Contingent liabilities:

(Note no. B (3) of schedule 13 of annual accounts)

(Rs. in crore)

Particulars As at As at 31.03.2011 31.03.2010

i) Guarantees given by banks - 3.36

ii) Corporate guarantees on behalf of subsidiaries 2,465.30 3,996.04

iii) Disputed sales tax demand under appeal in the Honorable High Court of Chennai - 52.20

iv) Income tax appeals before ITAT - 117.97

2) Business segment and geographical segment: (Note no. B (5) of schedule 13 of annual accounts)

a) Business segment

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

The main operating assets represent floating fleet, which is not identifiable to any geographical location.

There was no dilution in the earning per shares after considering interest on Foreign currency convertible bond of Rs. 4.42 (previous year nil) crore, net of tax Rs. 1.10 i (previous year nil)

3) Foreign Currency Exposure :

(Note no. B (9) of schedule 13 of annual accounts)

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

4) Investments

a) The Company has pledged its investments In equity shares of Essar Oil Limited amounting to Rs. Nil (previous year Rs. 2.27) crore in favour of lenders for loans availed by Essar Oil Limited.

b) During the previous year, the Company's investments in shares of Essar Logistics Limited had negative lien undertaking In favour of lenders for the loan availed by Essar Steel Holdings Limited. The investments in shares of Essar Logistics Limited have been transferred to Essar Shipping Limited pursuant to demerger scheme.

5) Employee benefits:

(Note no. B (10) of schedule 13 of annual accounts)

The Company has adopted Accounting Standard (AS) 15 (Revised) Employee benefits' as notified under the Companies (Accounting Standard) Rules, 2006, with effect from 1st Aprfl, 2007.

6) Related party transactions:

(Note no. B (11) of schedule 13 of annual accounts)

a) Holding companies :

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

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

b) Subsidiaries:

i) Vadinar Oil Terminal Limited

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

iii) Essar International Limited, Mauritius (upto September 30, 2010)

iv) Energy Transportation International Limited, Bermuda (upto September 30, 2010)

v) Energy II Limited, Bermuda (upto September 30, 2010)

vi) Essar Ports & Terminals Limited, Mauritius (upto September 30, 2010)

vii) Essar Bulk Terminal Limited

viii) Essar Bulk Terminal (Salaya) Limited

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

x) Essar Oilfields Services FZE - Dubai (upto April 14, 2010)

xi) Essar Dredging Limited

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

xiii) Essar Paradip Terminal Limited

xiv) Vadinar Ports & Terminal Limited

xv) Essar Bulk Terminal Paradip Limited (w.e.f. 31st March 2011)

xvi) Essar Shipping Limited (formerly known as Essar Ports & Terminal Limited) upto October 1, 2010

c) Key management personnel:

i) Mr. Rajiv Agarwal, Managing Director (w.e.f. May 27, 2010)

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

iii) Mr. A. R. Ramakrishnan, Whole-time Director

iv) Mr. Shailesh Sawa, Wholetime Director (w.e.f. July 24, 2010)

v) Mr. V. Ashok, Wholetime Director (upto May 24, 2010)

d) Other related parties where there have been transactions:

Enterprises commonly controlled or influenced by major shareholders / directors / relatives of Directors' of the Company:

i) Essar Information Technology Limited

ii) Essar Agrotech Limited

iii) Essar House Limited

iv) Essar Infrastructure Services Limited

v) Essar Steel Limited

vi) Futura Travels Limited

vii) India Securities Limited

viii). Essar Oil Limited

ix) Aegis Limited

x) Essar Steel Algoma Inc.

xi) Essar Shipping & Logistics (Panama) Inc.

xii) Essar Infrastructure Holdings Limited

xiii) Essar Logistics Holdings Limited

xiv) Essar Holdings Limited

xv) Essar Investments Limited

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

xvii) Essar Logistics Limited (w.e.f. October 1, 2010)

xviii) Essar Oilfield Services limited (w.e.f. October 1,2010)

xix) Essar Oilfields services India Limited (w.e.f. October 1,2010)

xx) Energy II Limited (w.e.f. October 1, 2010)

xxi) Energy Transportation International limited (w.e.f. October 1, 2010)

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

11) (Note no. B (12) of schedule 13 of annual accounts)

In view of exemption from Central Government obtained by the Company under section 211(4) of the Companies Act, 1956 vide order number 46/60/2011-CL-HI dated 15.02.2011, information required under sub-clauses (a), (b), (c) and (e) of paragraph 4-D of part H of schedule VI to the Companies Act, 1956, is not given.

7) Remuneration to Wholetime Directors and Managing Director

(Note no.B(12) of schedule 13 of annual accounts)

Remuneration paid to Directors amounting to Rs. 3.66 crore is in excess of limits prescribed under Schedule XIII to the Companies Act, 1956 by Rs. 3.18 crores. The remuneration has been approved by the Remuneration committee and is subject to the approval of the members by a special resolution at the General Meeting of the Company and such other approvals as required by Schedule XIII (as amended) of the Companies Act, 1956.

8) The Company has not received any intimation from the suppliers regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence the disclosures required by the Act have not been made. The Company is making efforts to get confirmations from the suppliers as regards their status under the Act.

9) Previous year's figures have been regrouped / reclassified wherever necessary to conform to the classification of the current period.

 
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