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Directors Report of Essar Securities Ltd.

Mar 31, 2016

DIRECTORS'' REPORT

To,

The Members of Essar Securities Limited,

The Directors have pleasure in presenting the Eleventh Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2016.

FINANCIAL RESULTS:

(Rs. In Lakhs)

Particulars

For the year ended on

March 31, 2016

For the year ended on

March 31, 2015

Income

65.95

49.39

Less: Expenditure

54.92

40.13

Profit Before Tax

11.02

9.26

Less: Provision for taxation

3.41

2.87

Profit After Tax

8.64

6.39

Balance brought forward from previous year

2221.87

2215.47

Balance carried forward to Balance Sheet

2230.51

2221.87

PERFORMANCE:

During the period under review your company has made a profit of Rs. 11.02 Lacs before making provision for Income tax amounting to Rs. 3.41 Lacs for the current year, thus a net credit balance of Rs. 8.64 Lacs has been transferred to Profit & Loss A/c for the current period.

CHANGE IN NATURE OF BUSINESS, IF ANY:

There were no changes in the nature of business of the Company during the year under review.

AMOUNT TRANSFERRED TO RESERVES:

Your Directors do not propose to transfer any amount to the general reserves.

DIVIDEND:

Your Directors do not recommend any dividend for the year.

TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND(IEPF):

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

MANAGEMENT DISCUSSION AND ANALYSIS:

There have been a number of causes behind growth of Indian economy in last couple of years. A number of market reforms have been instituted by Indian government and there has been significant amount of foreign direct investment made in India. Much of this amount has been invested into several businesses including knowledge process outsourcing industries. India’s foreign exchange reserves have gone up in last few years. Capital markets of India are doing pretty well too. All these factors have contributed to growth of Indian economy.

(a) INDUSTRY STRUCTURE AND DEVELOPMENT:

Your company provides consultancy services. The focus of the management is to increase its clientele and sustain the existing consultancy business.

(b) OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

In today''s complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organization''s success. Globalization, with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations to newer risks. As a result, today''s operating environment demands a rigorous and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. Increased competition and market volatility has enhanced the importance of risk management. The sustainability of the business is derived from the following:

i) Identification of the diverse risks faced by the Company.

ii) The evolution of appropriate systems and processes to measure and monitor them.

iii) Risk management through appropriate mitigation strategies within the policy framework.

iv) Monitoring the progress of the implementation of such strategies and subjecting them to periodical audit and review.

v) Reporting these risk mitigation results to the appropriate managerial levels.

(c) SEGMENT:

The primary segment of the Company is ''Consultancy Services''. Hence segment wise performance is not applicable.

(d) OUTLOOK:

As the Company has major equity investment in Essar Steel India Limited, a company engaged in Steel Business, its operations would also have a bearing on the performance of the Company.

(e) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUENCY:

Your Company has an effective system of accounting and administrative controls supported by an internal audit system with proper and adequate system of internal check and controls to ensure safety and proper recording of all assets of the Company and their proper and authorized utilization. As part of the effort to evaluate the effectiveness of the internal control systems, your Company''s internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from security related measures.

(f) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF EMPLOYEES:

During the year the Company maintained cordial relations with the employees of the Company. The Company acknowledges the contributions and services of its employees and wishes to place on record its appreciation of the efforts of the employees.

(g) CAUTIONARY STATEMENT:

The statement in this report, including the Management''s Discussion and Analysis Report, reflects the Company''s projections, estimates, expectations and predictions and contains a forward looking statement that involves risk and uncertainty. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Actual results, performances of achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only of the expectations as on the date.

DIRECTORS & KMPs:

(a) Retirement by rotation:

In accordance with the provisions of the Companies Act, 2013, Ms. Suparna Singh, Director retires by rotation and being eligible has offered herself for reappointment. Mr. N. B. Vyas, Mr. S. V. Venkatesan and Mr. Sujay Sheth continue to be directors of your Company.

(b) Cessation:

Mr. Neeraj Gupta resigned from the directorship of the Company w.e.f. February 12, 2016. The board wishes to place on record its sincere appreciation for the valuable services rendered by him during his tenure as a director of the Company.

(c) Declaration from Independent Directors:

The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149 (7) of the Companies Act, confirming that they meet the criteria of independence under Section 149(6) of the Companies Act and Regulation 16(1) (b) and 25 of Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulation 2015 (SEBI LODR Regulations).

(d) Annual Performance and Board Evaluation:

Pursuant to the provisions of Section 178 of the Act, read with Regulation 17 of the Listing Regulations, the Board of Directors carried out an annual evaluation of the performance of the Board as a whole, the Directors individually and the Board''s Report working of the committees of the Board. In a separate meeting of Independent Directors held on February 04, 2016, the performance of Non-Independent Directors, performance of the Board and the performance of the Chairman were evaluated, taking into account the views of all the directors of the Company. This would be further deliberated by the Board to ensure effective implementation of the findings of the evaluation.

(e) Key Managerial Personnel (KMP):

Mr. Ashish Vyas Company Secretary & Compliance officer has resigned on August 5, 2016 as the KMP of the Company. Mr. Girish Vyas continue to be a Chief Financial Officer of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility statement:-

(i) in the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, wherever applicable;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and loss of the Company for that period;

(iii) the directors have taken proper and sufficient care 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;

(iv) the directors have prepared the annual accounts for the financial year ended March 31, 2016 on a going concern basis;

(v) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; and

(vi) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

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

CHANGE IN SHARE CAPITAL:

During the year under review there was no change in the share capital of the Company.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering the nature of business of your company, the information required under Section 134 (3)(m) of the Companies Act, 2013 read with Companies (Accounts), Rules 2014 relating to Energy Conservation, Technology Absorption is not applicable. There were no foreign exchange earnings or outgo during the period under review.

RISK MANAGEMENT POLICY:

The Company has framed and adopted a Risk Management Policy. The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Company''s competitive advantage. The risk framework defines the risk management approach across the Company at various levels.

CORPORATE SOCIAL RESPONSIBILITY:

The Company has not developed and implemented any Corporate Social Responsibility as the said provisions are not applicable.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013:

All Related Party Transactions that were entered into during the financial year were on arm''s length and were in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the erstwhile Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The policy is available on the Company''s website www.essar.com. Detail of material related party transactions are given in the prescribed Form AOC - 2 and is appended to this report as Annexure A.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTISING COMPANY SECRETARY IN THEIR REPORTS:

There were no qualifications, reservations or adverse remarks made by the Statutory Auditors.

Pursuant to Section 203(1) of the Companies Act, 2013, Company had appointed CFO and CS.

COMPANY''S POLICY RELATING TO DIRECTORS'' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The Company has adopted a Policy on Remuneration and Criteria for evaluation of performance of Independent Directors. The Policy adopted by the Company covers the terms of appointment such as qualifications, positive attributes and independence of a director, remuneration for the directors, key managerial personnel and other employees as per the applicable provisions of the Companies Act, 2013. The Remuneration Policy is appended to this report as Annexure B.

NOMINATION AND REMUNERATION COMMITTEE:

The information pertains to Nomination and Remuneration Committee is furnished in the Corporate Governance Report, which forms part of this report.

DEPOSITS:

The Company has neither invited nor accepted any deposits from the public during the year. There are no unclaimed deposit(s) lying with the Company as on March 31, 2016.

STATUTORY AUDITORS:

Nisar & Kumar, Chartered Accountants, (Firm Registration No. 127820W), Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The Company has received a letter from them to the effect that they are willing to continue as Statutory Auditors and if re-appointed, their re-appointment would be within limits prescribed under Section 139 of the Companies Act, 2013 and they are not disqualified from being appointed as Auditors.

The Board of Directors recommends to re-appoint Nisar & Kumar, Chartered Accountants (Firm Registration No. 127820W) who was appointed as Statutory Auditors of the Company at last Annual General Meeting to hold office from the conclusion of 10th Annual General Meeting till the conclusion of 12th Annual General Meeting, subject to ratification of their appointment at Annual General Meeting to be held in 2016.

INTERNAL AUDIT:

The Company''s Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliances with operating systems, accounting procedures and policies of the Company and reports the same on quarterly basis to the Audit Committee.

MANAGERIAL REMUNERATION AND OTHER DETAILS:

The information required under section 197(12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure C to this report.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically and used efficiently and adequately protected.

HOLDING COMPANY:

Essar Capital Limited continues to be holding company of your Company. Essar Capital Holdings (India) Limited continues to be the ultimate holding company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint Venture and Associate Company.

MEETINGS OF THE BOARD:

The Board met six times during the year, the details of board meetings held and attendance of directors are provided in the Report on Corporate Governance forming part of this Report. The maximum time gap between any two meetings was less than 120 days as stipulated under SEBI''s Listing Obligations and Disclosure Requirements, 2015.

AUDIT COMMITTEE:

The Audit Committee of the Company comprises Mr. S. V. Venkatesan, Mr. N. B. Vyas and Mr. Sujay Sheth. Mr. S. V. Venkatesan is the Chairman of the Committee. Mr. Neeraj Gupta has stepped down as a member of the Audit Committee w.e.f. February 12, 2016. The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act and Regulation 18 of the Listing Regulations.

VIGIL MECHANISM:

The Company has established a vigil mechanism to deal with instances of fraud and mismanagement, if any. The mechanism also provides adequate safeguards against victimization of employees and Directors who express their concerns and also provides direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees of the Company in the exceptional cases. We confirm that during the financial year 2015-16, no employee or director was denied access to the Audit Committee.

EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure D and is attached to this Report.

SECRETARIAL AUDIT REPORT:

In terms of Section 204 of the Companies Act, 2013 and Rule made there under, CS Manish Baldeva, (Membership No. FCS 6180), Prop. M/s. M Baldeva Associates, Practicing Company Secretaries have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is attached as Annexure E to this report. The report is self-explanatory and do not call for any further comments.

CORPORATE GOVERNANCE REPORT:

The Company is committed to maintain the highest standards of Corporate Governance and adhering to the disclosure norms as set out by Securities and Exchange Board of India. The Report on Corporate Governance, as stipulated under Regulation 27 of the Listing Regulations, forms part of the Annual Report. Certificate of compliance from Mr. Manish Baldeva, (Membership No. FCS 6180), Prop. M/s. M Baldeva Associates, Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance, as stipulated under Regulation 27 of the Listing Regulations, has been annexed as part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

EMPLOYEES STOCK OPTIONS:

The Company has not provided any Stock Option Scheme to the employees.

ACKNOWLEDGEMENT:

Your directors express their appreciation for the contribution made by the employees in the progress of the Company. The Board also thanks the Company''s customers, vendors, investors and bankers for their continued support during the year.

Date: August 12, 2016 For and on behalf of

Place: Mumbai Board of Directors

Registered office:

Essar House,

5th Floor, 7, Esplanade, Director Director

Chennai - 600 108


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Ninth Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2014.

1. FINANCIAL RESULTS, BUSINESS AND MANAGEMENT''S DISCUSSION & ANALYSIS:

(Rs. In Lakhs)

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

Income 46.50 10.00 Less: Expenditure 36.26 18.16

Profit Before Tax 10.24 (8.16)

Less: Provision for taxation 3.17 14.29

Profit After Tax 7.07 (22.46)

Balance brought forward from 2208.40 2230.85

previous year

Balance carried forward to 2215.47 2208.40 Balance Sheet

DIVIDEND:

During the year under review, the profit after tax was Rs. 7.07 Lakhs against the loss after tax of Rs. 22.46 Lakhs for the previous year.

The directors do not recommend any dividend for the year.

Opportunities, Threats, Risks and Concerns Since focus of the Company is to continue as an investment holding company, management will look out for strategic investment opportunities in key emerging sectors and sustain the existing consultancy business.

As the Company has major equity investment in Essar Steel India Limited, a company engaged in Steel Business, its operations would also have a bearing on the performance of the Company.

Internal Control Systems and Internal Audit The Company has a proper and adequate system of internal controls. The internal control system is supplemented by a program of internal audits and review by the Management. The internal control system is designed to ensure that the financial and other records are reliable, for preparing financial statements and other data.

2. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956, Mr. Dhanpat Singh Nahata, Director retire by rotation and are being eligible for re-appointment. Mr. Neeraj Gupta continues to be directors of your Company.

The Board of Directors has co-opted, Mr. Sujay Sheth as an Additional Director designated as an Independent Director of the Company on 14th November, 2013. The Company has received a letter from shareholders'' nominating him for the post of Director of the Company.

The Company had, pursuant to the Listing Agreement entered into with the Stock Exchange, appointed Mr. N. B. Vyas, Mr. S. V. Venkatesan and Mr. Sujay Sheth as Independent Directors of the Company. As per Section 149(4) of the Companies Act, 2013 which came into effect from April 1, 2014, every listed Company is required to have at least one third of the total number of directors as an Independent Directors. In accordance with the provision Section 149 of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment as mentioned in the Notice of the forthcoming Annual General Meeting of the Company.

Mr. V. G. Raghavan resigned from the directorship of the Company w.e.f. November 13, 2013. The Board wishes to place on record his sincere appreciation for the valuable services rendered by Mr. V. G. Raghavan during his tenure as a Director of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement entered with the Stock Exchange.

3. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures, wherever applicable;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis.

4. PUBLIC DEPOSIT:

The Company has neither invited nor accepted any deposits from the public during the year. There are no unclaimed deposit(s) lying with the Company as on March 31, 2014.

5. AUDITORS:

Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting of the Company. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the rules there under, it is proposed to appoint Nisar & Kumar, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the 9th Annual General Meeting up to the conclusion of the next Annual General Meeting of the Company.

6. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering the nature of activities of your Company, the information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors), Rules 1988 relating to Energy Conservation, Technology Absorption is not applicable. The Company had no foreign exchange earnings or outgo during the period under review.

7. PARTICULARS OF EMPLOYEES:

Since there are no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, no such details are required to be given.

8. HOLDING COMPANY:

Essar Capital Limited continues to be holding company of your Company. Essar Capital Holdings (India) Limited continues to be the ultimate holding company.

9. CORPORATE GOVERNANCE REPORT:

The Company is committed to maintain the highest standard of Corporate Governance and comply to the Corporate Governance requirements as required under the Listing Agreement entered with the Stock Exchange. The disclosures as required in Clause 49 of the Listing Agreement have been furnished in the Annexure to the Directors'' Report under the head "Report on Corporate Governance". The requisite Certificate from the Statutory Auditors of the Company confirming the compliances with the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered with the Stock Exchange, is attached and forming part of this Annual Report.

10. ACKNOWLEDGEMENT

Your directors also wish to place on record their gratitude for the co-operation and assistance received from Banks, Stock Exchange and Shareholders, and thank them for their continued co-operation and support.

For and on behalf of the Board

sd/ sd/ Director Director

Place : Mumbai Date : August 13, 2014


Mar 31, 2012

To the Members of Essar Securities Limited,

The Directors have pleasure in presenting the Seventh Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2012.

1. FINANCIAL RESULTS, BUSINESS AND MANAGEMENT'S DISCUSSION & ANALYSIS:

(Rs. In Lakhs)

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

Income - 3339.85

Less: Expenditure 18.62 39.69

Profit Before Tax (18.62) 3300.16

Less: Provision for taxation 4.85 692.03

Profit After Tax (23.47) 2608.13

Dividend declared - (214.32)

Corporate dividend tax - (34.77)

Transfer to General Reserve - (131.00)

Balance brought forward from 2254.32 26.28 previous year

Balance carried forward to 2230.85 2254.32 Balance Sheet

DIVIDEND:

During the year under review, the loss after tax was Rs. 23.47 Lakh against the profit after tax of Rs. 26.08 Crore for the previous year. The loss was mainly due to Administrative Expenses.

The directors do not recommend any dividend due to the losses incurred during the year.

Threats, Risks and Concerns

As the Company has major equity investment in Essar Steel India Limited, a company engaged in Steel Business, its operations would also have a bearing on the performance of the Company.

Internal Control Systems and Internal Audit

Your Company has in-built internal control systems commensurate with the size and nature of operations of the Company. The financial statements would be reviewed periodically by the management. The Company has an internal audit system whereby deviations, if any, can be brought to the notice of the management quickly and remedial actions can be initiated immediately.

2. DIRECTORS:

Mr. V. G. Raghavan and Mr. S. M. Lodha continue to be director of your Company. Mr. Dhanpat Singh Nahata, Mr. Neeraj Gupta and Mr. N. B. Vyas were inducted on the Board as Additional Director at the Meeting of Board of Directors held on February 14, 2012, May 14, 2012 and August 24, 2012 respectively. Your company has received a letter from shareholders' nominating them for the post of Director of the Company liable to retire by rotation. Mr. V. G. Raghavan retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment.

Mr. Vikas Saraf resigned from the directorship of the Company w.e.f. April 28, 2012. The Board wishes to place on record their sincere appreciation for the valuable sen/ices rendered by Mr. Vikash Saraf during their tenure as a Director of the Company. Mr. Girish Sathe also resigned as Manager of the Company within the meaning of section 2(24) of the Companies Act, 1956 as well as from the post of Company Secretary w.e.f. May 14, 2012.

Mr. Ashish Vyas, Company Secretary was appointed as Manager of the Company within the meaning of section 2(24) of the Companies Act in accordance with section 269 read with Schedule XIII of the Companies Act. Necessary resolution for approval of shareholders with respect to his appointment as Manager also forms part of the notice of the ensuring AGM.

3. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures, wherever applicable;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended 31 st March, 2012 on a going concern basis.

4. PUBLIC DEPOSIT:

The Company has neither invited nor accepted any deposits from the public during the year. There are no unclaimed deposit(s) lying with the Company as on March 31, 2012.

5. AUDITORS:

M/s. Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting of the Company. The Company has received confirmation to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. Accordingly, the members' approval is being sought to their appointment as the Auditors of the Company at the ensuing Annual General Meeting.

6. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering the nature of activities of your Company, the information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors), Rules 1988 relating to Energy Conservation, Technology Absorption is not applicable. The Company had no foreign exchange earnings or outgo during the period under review.

7. PARTICULARS OF EMPLOYEES:

The disclosure as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, is not required as there are no employees covered by it.

8. HOLDING COMPANY:

Essar Capital Limited continues to be holding company of your Company. Essar Capital Holdings (India) Limited continues to be the ultimate holding company.

9. CORPORATE GOVERNANCE REPORT:

The Company is committed to maintain the highest standard of Corporate Governance and comply to the Corporate Governance requirements as required under the Listing Agreement entered with the Stock Exchange. The disclosures as required in Clause 49 of the Listing Agreement have been furnished in the Annexure to the Directors' Report under the head "Corporate Governance". The requisite Certificate from the Statutory Auditors of the Company confirming the compliances with the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered with the Stock Exchanges, is attached and forming part of this Annual Report.

10. CAUTIONARY STATEMENT

Estimation & expectation made in the report may differ from actual performance due to various economic conditions, Government policies and other related factors.

11. ACKNOWLEDGEMENT

Your directors also wish to place on record their gratitude for the co-operation and assistance received from banks, stock exchange, shareholders and various departments of Central and State Governments and thank them for their continued co- operation and support.

For and on behalf of the Board

V. G. Raghavan Dhanpat Singh Nahata Director Director

Place: Mumbai

Date: August 24, 2012

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