ESSAR PORTS LIMITED 36th Annual Report 2011-12
CONTENTS
MANAGEMENT INSIGHT
16 MD & CEO’s Message
CSR
18 Sustainability at Essar
COMPANY PROFILE
02 Essar Ports: Identity
04 Presence
06 Growth Plans
07 Financial Performance
GOVERNANCE
22 Profiles of the Board of Directors
26 Awards
27 Corporate Information
28 Directors’ Report
34 Corporate Governance Report
REVIEW OF FACILTIES
08 Vadinar
10 Hazira
12 Paradip
14 Salaya
FINANCIALS
43 Standalone Financial Statements
77 Consolidated Financial Statements
119 Financial Statements of Subsidiaries
Fully mechanised ports
Delivers superior service quality
EPL develops assets which are not
only fully-mechanised but environment-
friendly as well. A keen focus on
world-class infrastructure allows it to
deliver superior service quality to its
customers.
Faster turnaround time
Improves efficiency
EPL’s facilities are highly efficient due to
fast turnaround times. These efficiencies
are dependent on deep draft, quick
evacuation, and connectivity to the
hinterland through rail and road and
extensive storage facilities.
Forward expansion with consistent growth
Results in significant returns
EPL’s consistent capacity expansion,
over the years, ensures that it will be
well-positioned to capture the growth
of the Indian ports sector in the years to
come. Growth in revenues has mirrored
EPL’s expansion in capacity. A 63%
CAGR growth in revenues over the last 3
years translated into a topline of
Rs. 1,131 crore in FY12.
SCALEAs the 2nd largest private sector port company
in India
SERVICE QUALITYWith the implementation of superior infrastructure
EFFICIENCYThrough the fastest turnaround times for cargo
evacuation in the industry
GROWTHWith consistent capacity addition over the years
VALUEThrough assured earnings from anchor customers
1
Greater scale
Unlocks growth potential
Essar Ports Limited (EPL) is the second
largest private sector port company in
the country with respect to capacity and
throughput. The Company’s current
capacity of 88 Million Metric Tonnes Per
Annum (MMTPA) is expected to increase
to 158 MMTPA by FY14. The current cargo
volume of 43 MMTPA is to be increased to
125 MMTPA by FY15, in line with the
capacity expansion.
Improved value through assured earnings
Facilitates long-term visibility
EPL’s anchor customers – Essar Steel,
Essar Oil and Essar Energy Plc ensure
secured annuities with respect to revenues
and cargo volumes. Further, Take-or-Pay
(ToP) agreements with these customers
provide visibility of long-term earnings to
the Company.
2 Annual Report 2011-12
ESSAR PORTS
3
Essar Ports Limited (EPL) is part of the
multinational Essar Group, one of India’s
largest conglomerates with a presence across
the energy, steel, infrastructure and services
sectors. The second largest private sector
ports company in India, by capacity and
throughput, EPL operates ports for handling
liquid, dry bulk, break bulk and general cargo.
Operational facilities at Vadinar and Hazira,
Gujarat, with an aggregate capacity of
88 MMTPA, are used primarily by anchor
customers – Essar Steel, Essar Oil and Essar
Power. These facilities handle incoming raw
materials such as crude oil, iron ore / pellets,
limestone, dolomite and coal, and outgoing
finished goods such as petroleum products
and steel products.
EPL is in the process of increasing its overall
capacity to 158 MMTPA with expansion
projects at Hazira, a new port at Salaya,
Gujarat, and two terminals at Paradip, Odisha.
These projects will address the expected
increase in traffic from plant expansions by the
Company’s anchor customers, and support
additional business from third-party customers.
IDENTITY
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4 Annual Report 2011-12
PRESENCE
EPL’S SITES ARE STRATEGICALLY LOCATED
BOTH ON THE EAST AND WEST COASTS OF
INDIA.
Existing and upcoming sites at Vadinar, Hazira
and Salaya are on the western coast of India
in Gujarat to service the growing demand of
the land-locked northern, north-western and
central regions of India. Two days away from
major ports in the Middle East, the state is
responsible for importing 55% of India’s crude
requirement.
Paradip, on the eastern coast of India in
Odisha, is an important location for the import
of coal. The sites at Paradip will service mineral
and metals-rich eastern India and address
cargo servicing requirements for the steel and
power industries.
5
VADINAR
58 MMTPA Current Capacity
HAZIRA
30 MMTPA Current capacity
50 MMTPA Expanded capacity
SALAYA
20 MMTPA
Capacity (under construction)
16 MMTPA Current Capacity
14 MMTPA
Capacity (under construction)
PARADIP
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6 Annual Report 2011-12
EPL is in the process of expanding
its aggregate capacity to
158 MMPTA by 2014 to address
the rising cargo handling needs of
anchor customers and third-party
clients. The expansion project
at the Vadinar Oil Terminal
has increased its capacity to
58 MMTPA. The capacity of the
Hazira facility is to be increased
to 50 MMTPA. This will be
accomplished by the addition of
20 MMTPA capacity, through
the development of 1,100m of
waterfront. The balance capacities
will be addressed through a
20 MMTPA new bulk terminal in
Salaya, Gujarat, a 16 MMTPA
bulk cargo export terminal and
a 14 MMTPA coal terminal at
Paradip Port in Paradip, Odisha.
Of the total expanded capacity
GROWTH PATH58 MMTPA will be dedicated to
servicing wet cargo, i.e. crude
oil and petroleum products, at
Vadinar while 100 MMTPA across
Hazira, Salaya and Paradip will
be utilised in servicing dry, i.e.
general, break bulk and
project cargo.
7
FINANCIAL PERFORMANCE
CARGO MIX
Crude (SPM)
Liquid Product (Jetty)
Liquid Product (Road/Rail)
Liquid Intermediate
Dry Bulk
Breakbulk/Containers
Project Cargo
MMTPA
Volume: 39.55 MMTPA
2011
13.2
8.7
5.01
8.53
3.140.92
0.05
Crude (SPM)
Liquid Product (Jetty)
Liquid Product (Road/Rail)
Liquid Intermediate
Dry Bulk
Breakbulk/Containers
Project Cargo
MMTPA
Volume: 43.23 MMTPA
12.18
8.294.3410.13
6.4
1.78 0.11
2012
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
FY11 FY120
-20
-40
20
40
60
30.0
63.1
64.0
PROFIT AFTER TAX (RS. CRORE)
FY10 FY11 FY12Vadinar Hazira
1000
800
600
400
200
0
326.5
515.4
896.7
326.5
368.3
147.1
596.2
300.5
EBITDA (RS. CRORE)
1200
1000
800
600
400
200
0FY10 FY11 FY12
Vadinar Hazira
427.4
502.9
244.9
698.9
432.9
427.4
747.4
1131.8
REVENUES (RS. CRORE)
-60
FY10
8 Annual Report 2011-12
Essar Ports’ Vadinar facility is an integrated,
all-weather deep draft oil terminal at Vadinar,
Gujarat, with marine, storage and evacuation
facilities. It is one of the deepest natural draft
terminals in India and does not require any
maintenance dredging. Vadinar is situated in the
Jamnagar district, Gujarat, which is among the
largest refining hubs in the world. With a current
capacity of 58 MMTPA, Vadinar is well-positioned
to handle the crude and petroleum product
requirements of customers.
The offshore Single Point Mooring (SPM) facility
at the terminal is capable of receiving crude oil
through VLCCs (Very Large Crude Carriers) up to
325,000 Dead Weight Tonne (DWT).
A 12 MMTPA expansion project was
commissioned in April, 2011 to meet the
increased liquid cargo requirements of Essar Oil.
An anchor customer, Essar Oil recently enhanced
its refinery capacity to 20 MMTPA. The project
involved an additional product jetty, Jetty B. It
also included development of crude oil tanks
and product tanks for the storage of refined and
intermediate petroleum products and a new road
gantry. Jetties A and B are capable of servicing
coated Aframaxes of up to 100,000 DWT.
VADINAR
STORAGE CAPACITIES
1,136,300 KLCrude and other feedstock tank storage
TOTAL CAPACITY
58 MMTPAat Vadinar oil terminal
1,806,438 KLProduct and intermediate storage tanks
MARINE CAPACITIES
32 m draftSPM :
20 m draftJetty A:
16 m draftJetty B:
Vadinar provides port and terminal handling, marine services and evacuation facilities for crude oil, intermediate products and petroleum products, including:
> Unloading of crude oil and
product evacuation for the export market and domestic markets;
> Product evacuation through
marine, road & rail
infrastructure
> Storage and handling of crude oil and refined petroleum products.
SERVICES
During the year under review,
Vadinar made significant
achievements.
These are:
> 12 MMT increase in the
capacity of the terminal, from
46 MMTPA to 58 MMTPA
> 4% increase in cargo volume
from 30.05 MMT in FY11 to
31.21 MMT in FY12
> The successful renewal of ISO
2800 Security Management
and ISO 9001-2008 Quality
Management System
certifications
OPERATIONAL HIGHLIGHTS
9
> 6 road gantries
> Railcar loading facilities to
simultaneously load 2 rakes
> On-site facility for transporting
0.5 MMTPA LPG through the
GAIL LPG pipeline
REVIEW OF FACILITIES
EVACUATION FACILITIES
CONNECTIVITY
Road:
Connected to the four-lane
National Highway 8B by a 130
km four-lane state highway
Rail:
Connected to a broad-gauge
Western Railway line by an 11 km
branch line from Modhpur
CONNECTIVITY
Road:
Connected to the four-lane
National Highway 8B by a 130 km
four-lane state highway
Rail:
Connected to a broad-gauge
Western Railway line by an 11 km
branch line from Modhpur
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> All-weather, deep draft berth
with direct berthing for vessels
> Dedicated navigational channel
FACILITIES
Hazira provides port and terminal
handling, marine services and
cargo handling services for dry
bulk, break bulk and project
cargoes, including:
> Pilotage and towage services
to vessels
> Mechanised cargo handling
services for unloading dry bulk
cargo such as iron ore/pellets,
limestone and thermal and
coking coal
> Loading of finished steel cargo
for the export market and the
domestic market
> Loading and unloading of
project cargo
SERVICES
12.02 MMTCargo volume for FY12
243 Vessels handled in FY12
ISO 9001:2008,
ISO 14001:2004
& OHSAS
18001:2007 Certifications awarded
at Hazira bulk terminal
TOTAL CAPACITY
30 MMTPA
11
The Essar Bulk Terminal at Hazira, Gujarat,
(Hazira) is a 30 MMTPA all-weather, deep draft
dry bulk port and terminal. The port handles
iron ore, coal, limestone, break bulk cargo
such as pipes and coils and project cargo. The
Hazira terminal can accommodate lightered
Capesizes and fully-loaded Minicape vessels of
upto 105,000 DWT.
The Hazira terminal has fully mechanised
facilities and modern equipment for handling
break bulk cargo.
HAZIRA
OPERATIONAL HIGHLIGHTS CONNECTIVITY
Road:
Connected to National Highway 6
Rail:
Proximity to the Mumbai-Delhi
railway line
> A 26% increase in cargo handled, from 9.50 MMT in FY11 to 12.02 MMT in FY12
> An increase in total vessels handled from 190 vessels in FY11 to 243 vessels in FY12
> Third-party cargo handled
> ISO 9001:2008 Quality Management, ISO 14001:2004 Health & Safety, OHSAS 18001:2007 Environment certifications awarded
> In principal approval received from the Indian Railways for a double track, high speed, electrified line connectivity to the Mumbai-Delhi railway line
EXPANSION PROJECT
EPL plans to implement a
20 MMTPA expansion project at
Hazira to handle general cargo,
coal and containers and to
significantly extend the length of
the existing berth. The new facility
will have berth drafts of 16 m
and will be able to handle fully-
loaded Capesized carriers.
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The Essar Bulk Terminal at Paradip, Odisha,
(Paradip) is an existing 230 m long berth
at the Paradip Port – CQ3 (Central Quay
3). With a planned capacity of 16 MMPTA,
Paradip is being mechanised and upgraded
on the central dock. Paradip will handle dry
bulk cargo, including general cargo for Essar
Steel. An anchor customer, Essar Steel, is
constructing two 6 MMTPA General cargo
pelletisation plants in Paradip. Proximity of
the terminal to these plants allows the easy
movement of ore to Essar Steel’s plant in
Hazira. The terminal is also strategically located
close to the integrated steel plants of SAIL,
Tata Steel, Jindal Steel & Power Ltd., Bhushan
Steel and Visa Steel. It is also in proximity to
several thermal power plants using imported
coal to blend their fuel. During the year under
review, 92% of the mechanisation of Paradip’s
general cargo berth was completed.
PARADIP
An all-weather, mechanised,
deep draft berth with the ability
to handle large size ships will be
commissioned by Q3 FY13.
FACILITIES (DRY BULK)
16 MMTPA Capacity at Paradip dry bulk berth
14 MMTPACapacity at Paradip coal berth
92%Construction of dry bulk berth
completed as of March 31, 2012
17.1 mOperational draft at coal berth
12.5 mOperational draft at dry bulk berth
13
Essar Paradip Terminals is being
developed as a greenfield, all-
weather, deep draft coal berth
at the Paradip Port. The project
will comprise of a 17.1 m deep
draft coal berth for third-party
customers with a capacity of
14 MMTPA. The terminal will
be able to accommodate fully-
loaded Capesized vessels of up to
170,000 DWT.
As a dedicated third-party
terminal, it is the first Public-
ESSAR PARADIP TERMINALS CONNECTIVITY
Road:
Connected to National Highway
5A
Rail:
The terminal’s stockyard will have
connectivity with the main railway
line
Private Partnership (PPP) project
for Essar. The berth will handle
coking and thermal coal. The
Paradip Port Trust has granted
Essar Paradip Terminals a
concession for the development
and operation for a period of
30 years. Under the terms of
the concession agreement,
coal imports shall be exclusively
handled at the coal berth, during
the exclusivity period of the initial
two years.
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The following facilities are being
developed at Salaya:
> A fully mechanised berth with
an operational draft
of 14 m
> A dedicated navigational
channel
FACILITIES
15
The Essar Bulk Terminal Salaya (Salaya) is
being constructed as a 20 MMTPA dry bulk
port and terminal facility at the Salaya port,
Gujarat.
The terminal will be capable of handling
Minicape vessels of up to 105,000 DWT. The
terminal will primarily cater to incoming and
outgoing dry bulk cargo requirements with a
focus on coal, pet coke and bauxite. Salaya
has received an approval for construction of
the jetty and associated port and terminal
facilities. During the year under review, 53%
of the construction was completed at Salaya.
Additionally, environment and CRZ clearances
were received. Forest clearance for part of the
project is awaited.
SALAYA
Salaya will provide cargo handling
services for power plants
operated by the Essar Group
and also handle cargo for third
party customers.
SERVICES CONNECTIVITY
Road:
Connected by a 135 km
four-lane state highway to the
four-lane National Highway 8B
Rail:
15 km from the Jamnagar-Okha
line
20 MMTPACapacity at Salaya dry bulk terminal
53%Construction completed as of
March 31, 2012
14 mOperational draft at the terminal
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16 Annual Report 2011-12
Recently, we have entered into a strategic partnership with Port of Antwerp International – Europe’s second largest port. This partnership is expected to increase the cargo flow between Port of Antwerp and your Company’s terminals. The partnership will also facilitate in developing world class port facilities and further improve the operational efficiency of our terminals.
“
“
> Rajiv Agarwal
MD & CEO’S MESSAGE
17
Infrastructure is the backbone of an economy. India urgently needs quality infrastructure to maintain its growth momentum and further accelerate the growth of its economy. Ports are part of India’s core infrastructure needs which have to be developed rapidly to cater to the growing cargo handling requirements. Traffic at ports is expected to increase from around 900 MMPTA at present to 2,500 MMPTA by 2020. Considering the delay in the addition of port capacity and only a gradual progress in awarding and completion of projects, there will be surplus demand in port capacity. This means port assets will remain fully utilised over the next few years.
This was the first full year of operation of your Company after the demerger of the shipping, logistics and oilfields services businesses. Your Company has delivered a robust performance with increased cargo handling, revenue, EBITDA and profit. Compared to the port segment of the Company during FY11, before the demerger, revenue increased by 51% to Rs. 1,131 crore; EBITDA increased by 65% to Rs. 913 crore; and Net Profit more than doubled to Rs 63.9 crore in FY12. The strategy of having long-term contracts for cargo handling with our anchor customers has insulated us to a certain extent from the vagaries of the market.
Your Company commissioned a 12 MMTPA expansion project at Vadinar on April 1, 2011 as per schedule thereby increasing the cargo handling capacity from
76 MMTPA to 88 MMTPA. Other under-construction projects at Paradip, Odisha, and Salaya, Gujarat, are progressing well. A 16 MMPTA dry bulk terminal for export at Paradip is expected to be commissioned during FY13 while 50% of work for the coal terminal at Salaya has been completed. Construction activities of the coal terminal at Paradip and the expansion project at Hazira are expected to start in the FY13.
We believe that partnership improves capabilities in today’s globalised world. Recently, we have entered into a strategic partnership with Port of Antwerp International which is an investment arm of Port of Antwerp – Europe’s second largest port. This partnership is expected to increase the cargo flow between Port of Antwerp and your Company’s terminals. The partnership will also facilitate in developing world class port facilities and further improve the operational efficiency of our terminals.
The port sector plays a significant role in supporting growth in the Indian economy. Huge demand for cargo handling services highlights the growth potential of the sector. Your Company offers a comprehensive range of port and terminal services for liquid, dry bulk, break bulk and general cargo.
We firmly believe in our business model for sustainable growth. We have created world-class facilities for our customers by reducing their costs and thereby improving their competitiveness. We believe in symbiotic relationships where the
progress of our customers leads to our progress.
We are focused on developing assets that are environmentally friendly and offer world class infrastructure. Your Company has an exemplary track record in health, safety and environment. Both of our terminals have achieved zero Loss Time Injury (LTI) during the year. Your Company contributes significantly to the development of local communities through various CSR initiatives undertaken by your Company.
We have progressed well in the last 5 years; in 2007 our first facility at Vadinar was commissioned. We are one of the fastest growing port companies in India with presence at strategic locations on the west and east coast of India. We expect our port capacity to reach 158 MMTPA by 2014 when all our projects under construction and development get commissioned.
I would like to express my sincere gratitude to the Board of Directors for their support and guidance and to all shareholders, stakeholders and employees for their unwavering support during the year. As the manufacturing sector grows and trade increases, traffic at ports will increase substantially. We will be well-positioned to contribute to the growth of the sector.
With Best Wishes,
Rajiv Agarwal
Managing Director & CEO
“ “This was the first full year of operation of your Company after the demerger of the shipping, logistics and oilfields services businesses. Your Company has delivered a robust performance with increased cargo handling, revenue, EBITDA and profit.
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SUSTAINABILITY AT ESSAR
19
> Enhanced risk management
and mitigation
> Improving and sustaining the
quality of products and services
> Transparency in disclosure,
compliance and assurance
> Building a learning organisation
with an engaged workforce
> Institutionalising the culture of
safety
> Engaging and investing in the
community
ECONOMIC
OBJECTIVES
SOCIAL
OBJECTIVESENVIRONMENTAL
OBJECTIVES
We will be a respected global entrepreneur, through the power of positive action
We are committed to innovative growth through our personal passion, reinforced by a professional mindset, creating value for all those we touch
OUR VISION
OUR MISSION
OUR SUSTAINABILITY
POLICY &
OBJECTIVES
> Environmental Impact
Assessment
> Enhanced pollution control and
waste management
> Reducing emissions and
carbon footprint
> Efficient resource management
At Essar, we have integrated our Mission with our sustainability policy and objectives to realise our vision of being a respected global entrepreneur.
We are committed to aligning individual business plans with key Environmental, Social and Governance (ESG) objectives.
We benchmark our ESG performance, guided by our policies at the Group and business levels.
Our key sustainability achievements include enhanced disclosure, reporting and assurance of our ESG performance, certification to management systems such as the ISO 9001, OHSAS 18001 and ISO 14001, and establishing the Essar Foundation to spearhead our social responsibility efforts at all our operational sites.
“Sustainable development is integral to Essar Group’s over-arching business model. Our approach to sustainability focuses on the economic, social and environmental activities at all our operational locations around the world.
“
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ENVIRONMENT
Mangrove Plantation at Dandi
and Navsari
Essar has taken up the
responsibility for the plantation
and conservation of mangroves
near Dandi and Navsari in
Gujarat through an Ecological
Development programme. The
total area proposed to be covered
is about 500 hectares of which,
as on date, plantation in 400
hectares has been completed.
Tree Plantation drive
A large number of CSR initiatives
undertaken by the Essar
Foundation focus on children in
the age group of 0 to 6 years. The
aim is ‘to catch them young’ and
instill the right attitude towards
education and healthy living to be
carried forward for a lifetime.
With the aim of generating
interest in young minds, Essar
organised tree plantation drives for
kindergarten students in Vadinar.
Each child planted a sapling and
the responsibility of nurturing
the sapling was assigned to the
child. Teachers and the Essar
team explained the children the
importance of trees and how to
nurture the saplings. At the end
of the programme, all 52 children
were excited about caring for their
own sapling and promised to not
damage other plants in the school
premises while playing.
Coastal Cleanup
In order to ensure that the
residents of Mumbai can enjoy
clean and beautiful beaches,
Essar, in association with the
Coast Guard, conducts a Coastal
Clean-up campaign on the World
Environmental Day to clean up
the Chowpatty and Juhu beaches
in Mumbai. Many schools, social
groups from colleges, members of
the Coast Guard and employees
from the Company, including the
Company’s senior management
and staff, participate in the
campaign.
21
SOCIAL
Essar Salaya Stitching Centre
Taking forward the endeavour
to promote the spirit of
entrepreneurship in our
stakeholder communities, Essar
Foundation and Essar Bulk
Terminal (Salaya) Limited (EBTSL)
set up a stitching centre for
women and adolescent girls in the
Salaya municipality. Essar saw the
potential of the centre to foster
women’s empowerment in the
community and offered to adopt
the centre. The objective of the
centre is to create opportunities
for local women to expand their
horizons beyond the boundaries
of their small port town and
learn from the outside world. It
has since been renamed ‘Essar
Salaya Stitching Centre’ by the
community. The Essar Salaya
Stitching Centre is a joint initiative
between Essar and the Salaya
community, currently catering to
200 women and adolescent girls
from the community.
Essar has facilitated the stitching
centre with government and bank
linkages. Essar has provided
master trainers to increase
employability and marketability of
products prepared by the budding
entrepreneurs. State-of-the-
art industrial sewing machines,
personality development and adult
literacy programmes, exposure
visits and health awareness,
contribute to the annual calendar
of the centre, targeting the all-
round development of women.
Provision of Teaching Learning Materials
To promote art as an alternate means of imparting education, Essar organised the Extending Hand programme at Dwarka. Various drawing and painting related Teaching Learning
Materials (TLM) were provided to approximately 300 underprivileged children. Employees and their families also contributed in the initiative and provided biscuits, toys and clothes.
Adoption of the girl child
Every year more than 200 million children under the age of 5 are not able to reach their full potential due to poverty, gender discrimination, conflict, malnutrition, inadequate care and lack of educational opportunities. Essar took a conscious call and adopted a few girl children from Navyug School Vadinar. All expenses towards their education, including uniforms and books, are taken care of. It is ensured that each girl child gets the material and emotional support she needs to succeed in school and beyond through an enhanced approach that includes academic support, mentoring and life skills training.
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PROFILES OF THE BOARD OF DIRECTORS
23
Mr. Anshuman Ruia
Director
Mr. Ruia is a Director on the Board of major companies of the Essar Group. With a Bachelor’s Degree in
Commerce, Mr. Ruia has over a decade of experience in overseeing the Group’s major businesses and has
been involved in new business ventures of the Group in India and overseas.
Mr. Ruia is known for his financial expertise and project execution skills. He has overseen the Group’s
BPO and Power businesses and was instrumental in creating Aegis, the BPO arm of Essar. He is also
responsible for the expansion and diversification of the Power business into new, renewable energy
sources and its entry into the transmission and distribution segment.
Mr. Rajiv Agarwal
Managing Director & CEO
Mr. Agarwal is a Chartered Accountant, Cost and Works Accountant and Company Secretary by
qualification with over 25 years of experience in industries like Retail, BPO, Telecom, Manmade fibres,
Shipping and Logistics.
He joined the Essar Group in 1997 as Chief Operating Officer in Essar Telecom. Mr. Agarwal held the
position of CEO and Director of The Mobile Store Limited and created a well-recognised and strong Indian
Telecom Brand in just 2 years.
Mr. Agarwal has won a series of accolades and awards including CEO of the Year Award – 2009 Asia
Retail Congress, Retail Professional of the Year (2008) at Franchise India and Best Retailer in Telecom
Segment. Mr. Agarwal is also a Director on the Board of various other Indian companies.
Mr. K. K. Sinha
Executive Director
Mr. Sinha has done his B.Sc (Engg.) in Mechanical Engineering from BIT, Sindri and has obtained his MBA
from FMS, University of Delhi.
Mr. Sinha has over 32 years of experience with industry majors such as Petronet India Ltd., Indian Oil
Corporation and Bokaro Steel Limited. Prior to joining Essar, he was Managing Director at Petronet India
Limited, a position he held since 2000. Mr. Sinha has served Indian Oil Corporation for over 27 years in
various capacities. As Executive Director, IOC he was responsible for implementation of the entire pipeline
projects of IOC. Mr. Sinha is also a Director on the Board of various other Indian companies.
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24 Annual Report 2011-12
Mr. Shailesh Sawa
Director Finance
Mr. Sawa is a qualified Chartered Accountant and Cost and Works Accountant. Mr. Sawa has a rich and
varied experience of around 25 years in the fields of Finance and Capital Markets.
Mr. Sawa has been associated with the Essar Group since 1994. He was associated with Essar Oil
Limited since January 2002 as the Chief Financial Officer of Essar Oil’s Refinery Expansion Division. He
spearheaded the fund-raising for the refinery expansion plan. He has been working with Essar Ports as
Director Finance for past 2 years.
Prior to joining Essar group, Mr. Sawa has been associated with many organisations like Gujarat Ambuja
Cements Limited, Modern Woollens Limited and Securities & Exchange Board of India.
Mr. Sawa is also a Director on the Board of various other Indian companies.
Mr. R. N. Bansal
Independent Director
Mr. Bansal is a Commerce Graduate and M.A. (Economics) and a Fellow Member of the Institute
of Chartered Accountants of India, Associate Member of the Institute of Chartered Secretaries and
Administrators, London and Associate Member of the Institute of Company Secretaries of India.
He joined the Department of Company Affairs in December 1956. He was the Registrar of Companies,
Punjab, Tamil Nadu and Maharashtra. Mr. Bansal has served as a Government Nominee Director on all
major Stock Exchanges of India. He was the Additional Director of Inspection & Investigation, Company
Law Board, New Delhi, Regional Director (Southern and Western Regions), Director (Investment) and
Additional Controller of Capital Issues and member of Company Law Board.
Mr. Bansal is also a recipient of the Silver Elephant Award. Mr. Bansal is serving as an independent
professional Director on the Board of various Indian public limited companies.
Mr. K. V. Krishnamurthy
Independent Director
Mr. Krishnamurthy, a Chartered Accountant, is a fellow member of the Indian Institute of Bankers and
was a member of its Governing Board. He has over 33 years of experience in Public Sector Banking.
His areas of specialisation include both domestic and international banking, treasury management, risk
management, foreign exchange management and human resource management.
He is credited with the remarkable turnaround of both Bank of India and Syndicate Bank. He has been
the Chairman/Director of nationalised banks like Bank of India, Bank of Baroda, Syndicate Bank and
other financial institutions like Indo Hong Kong International Finance Company Limited, Export Credit
Guarantee Corporation of India and Agricultural Finance Corporation of India Limited.
Mr. Krishnamurthy is also a Director on the Board of various Indian public limited companies.
25
Mr. Dilip J. Thakkar
Independent Director
Mr. Thakkar, a practicing Chartered Accountant by profession since last 46 years is a Partner of M/s. Jayantilal
Thakkar & Co. and Jayantilal Thakkar Associates, Chartered Accountants, Mumbai. Mr. Thakkar has vast
experience in the fields of Accounts, Finance, Taxation, FEMA etc.
Mr. Thakkar is also a Director on the Board of various Indian public limited companies.
Mr. Deepak Kumar Varma
Independent Director
Mr. Varma, a B.E. (Mechanical) and MBA by qualification, is a Management Consultant and Arbitrator by
profession and is a member of the Indian Council of Arbitrators.
During his career, Mr. Varma has held various senior management positions in SAIL. He was also the Chairman
and Managing Director of Hindustan Shipyard Limited, Chairman and Managing Director of Cochin Shipyard
Limited, Managing Director of National Ship Design & Research Centre (NSDRC), Chairman and Managing
Director of Rashtriya Chemical & Fertilizers Limited, Chairman and Managing Director of Fertilizers & Chemicals
(Cochin), Director & Group Leader of Oman India Fertilizers (OMIFCO), Chairman of the Standing Conference of
Public Enterprises, the Apex Body of all Central PSUs.
Mr. Varma is also a Director on the Board of various Indian public limited companies.
Mr. T. S. Narayanasami
Independent Director
Mr. Narayanasami has over 40 years of experience in the field of Banking and Finance.
Mr. Narayanasami was associated with Bank of India as Chairman and Managing Director. Prior to that, he was
the Chairman & Managing Director of Indian Overseas Bank. He was also the Chairman & Managing Director of
Andhra Bank. He has served as Executive Director of Punjab National Bank.
Mr. Narayanasami is also a Director on the Board of various other Indian companies.
Mr. Jan Adam
Director
Mr. Adam aged 50 years has studied Economics at the University of Antwerp and has specialised in
Accountancy from the University of Gent. Presently Mr. Adam is the Chief Financial Officer of Port of Antwerp
International UK Limited.
Mr. Adam has joined the Antwerp Port Authority as Chief Financial Officer in 2001 with overall responsibility over
the finance departments, IT, port dues, in house logistics and car fleet.
Mr. Adam is also a Director on the Board of various companies overseas.
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
26 Annual Report 2011-12
VADINAR
HAZIRA
> Silver award for the Port
and Terminal sector at the
Greentech Safety Awards
2012 for achievements in
Safety Management
> Certifications received from the
Indian Register of Shipping:
> ISO 9001:2008 certification
for Quality Management
> ISO 14001:2004
certification for Environment
Management
> OHSAS 18001:2007
certification for
Occupational Health
AWARDS
> Gold award at the Royal
Society for the Prevention
of Accidents Occupational
Health and Safety Awards
2012 for prevention of
accidents and ill health
> Gold award at the Greentech
Safety Awards 2011 for
Safety Management
> Certifications received from
the American Bureau of
Shipping and Det Norkse
Veritas:
> ISO/TS 29001:2007
certification for Quality
Management – Petroleum
Sector
> ISO 9001:2008 certification
for Quality Management
> ISO 28000:2007
certification for Security
Management
> OCIMF Terminal
Compliance Verification
> Certificate of
Classification
> ISO 14001:2004
certification for Environment
Management
Essar Ports’ facilities
at Vadinar and Hazira
have received several
accreditations in
recognition of achieving
global standards of health,
safety and environment.
> OHSAS 18001:2007
certification for
Occupational Health
Vadinar has also been awarded
the Sword of Honour by the
British Safety Council for safety
management in the past
27
CORPORATE INFORMATION
BOARD OF DIRECTORS
Anshuman Ruia
Director
R. N. Bansal
Independent Director
Dilip J. Thakkar
Independent Director
K. V. Krishnamurthy
Independent Director
Deepak Kumar Varma
Independent Director
T. S. Narayanasami
Independent Director
Jan Adam
Director
Rajiv Agarwal
CEO & Managing Director
K. K. Sinha
Executive Director
Shailesh Sawa
Director Finance
COMPANY SECRETARY
Manoj Contractor
AUDITORS
Deloitte Haskins & Sells
AUDIT COMMITTEE
Anshuman Ruia
R. N. Bansal
K. V. Krishnamurthy
Deepak Kumar Varma
SHAREHOLDERS’ GRIEVANCE COMMITTEE
R. N. Bansal
Deepak Kumar Varma
Rajiv Agarwal
Shailesh Sawa
SHARE TRANSFER COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
COMPENSATION COMMITTEE
R. N. Bansal
Dilip J. Thakkar
Deepak Kumar Varma
REGISTRARS & TRANSFER AGENTS
Data Software Research Company Private Limited
19, Pycroft Garden Road, Off Haddows Road
Nungambakkam, Chennai 600006
Tel: (044) 2821 3738, 2821 4487 Fax: 2821 4636
e-mail: [email protected]
REGISTERED OFFICE
Administrative Building
Essar Refinery Complex
Okha Highway (SH-25)
Taluka Khambhalia
District Jamnagar, Gujarat 361 305
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi, Mumbai 400 034
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
28 Annual Report 2011-12
DIRECTORS’ REPORT
To the Members of Essar Ports LimitedYour Directors take pleasure in presenting the Thirty-Sixth Annual Report of your Company together with Audited
Accounts for the year ended March 31, 2012.
1. FINANCIAL RESULTS
The summary of consolidated and standalone financial results of your Company for the year ended March 31, 2012 are
furnished below:
(Rs. in crore)
Particulars Consolidated Standalone
For the
year ended
March 31, 2012
For the
year ended
March 31, 2011
For the
year ended
March 31, 2012
For the
year ended
March 31, 2011
Total Income 1,131.06 2,086.12 52.56 659.36
Total Expenditure 217.85 1,174.10 23.52 378.55
EBITDA 913.21 912.02 29.04 280.81
Less: Interest & Finance charges 420.81 473.75 92.40 184.07
Less: Provision for Depreciation 220.24 320.83 7.40 59.87
Profit before exceptional item 272.16 117.44 (70.76) 36.87
Less: Exceptional item 235.51 - - -
Profit after exceptional item and before Tax 36.65 117.44 (70.76) 36.87
Less: Provision for Tax (62.19) 34.60 (0.23) 16.00
Profit before Share of Minority Interest 98.84 82.84 (70.99) 20.87
Less: Share of Minority Interest 34.89 12.69 - -
Profit after Tax 63.95 70.15 (70.99) 20.87
Note: The consolidated and standalone financial figures for the year ended March 31, 2011 include the figures attributable
to the demerged shipping & logistics and oilfields services businesses upto September 30, 2010 and hence are not
comparable with the figures for the year ended March 31, 2012.
29
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
2. DIVIDEND Your Company proposes a dividend of 5% on the equity
shares of the Company.
3. MANAGEMENT DISCUSSION & ANALYSIS
Indian Economy and Infrastructure Sector The Indian Economy grew by a moderate 6.5% in FY12
compared to 8.4% in the last two years. In spite of this slowdown, India remains one of the fastest growing economies in the world. Manufacturing has showed signs of deceleration in FY12, with growth of Index of Industrial Production (IIP) slowing to 2.8% in FY12, as against a high of 8.2% in the previous year. On the other hand, fundamentals of the economy remain strong, backed by promising growth in external trade. Exports registered a growth of 21% in FY12 to USD 303.7 billion while imports registered a growth of 32.2% to USD 488.6 billion. India had the fastest growth in exports among major economies in 2011, with shipments rising 16.1% compared to global average growth of 5% and a 9.3% growth in China.
Indian Economy witnessed high inflation during the year and to control that Reserve Bank of India (RBI) introduced monetary controls. Recently, RBI relaxed its monetary control as is evident from the 50 basis point reduction in Repo rate in April 2012. Several banks have reduced their lending and deposit rates following the monetary policy announcement, this will fuel the investment in and growth of the economy.
The focus of the Government is on growth of the infrastructure sector to ensure that earlier growth targets set in the ports, roads, steel and power sectors are achieved and the economy gets back to 8% plus growth rate trajectory.
Ports Sector Indian ports have handled a total of 929 million metric
tonnes (MMT) of cargo during FY12 registering a moderate growth of 5% compared to 884 MMT of cargo handled during FY11. The ports sector in India has grown at a CAGR of 10% in the last 10 years.
However, in the last 2 years, growth in the ports sector has been below its potential due to imposition of higher export duty on iron ore and higher railway charges for transportation of iron ore. Growth of the port sector has also been affected by rise in prices of imported coal. However, these issues are expected to be temporary in nature and the port sector growth story is expected to remain intact in the long run.
Growth of the port sector is linked to the growth of Indian economy and external trade. The Indian economy is expected to achieve growth rates of 8-9% in the next few years. Similarly, the growth in trade is expected to be robust resulting in growth of traffic. As per Maritime Agenda 2010-20 published by the Ministry of Shipping, port traffic is expected to reach to 2,495 MMT by 2020 from 850 MMT in 2010. As the economy grows, port traffic will increase and more investment opportunities will be created in this sector. Considering high capacity utilisation of existing port assets and expected higher traffic growth in future, new capacity addition in ports will have good utilisation and the port sector will remain an attractive investment destination.
Challenges faced by the port sectorSeveral port projects have been affected due to procedural delays linked to approvals and clearances required for the
projects. Connectivity of ports is another major challenge as it is critical for the ports to operate at their optimum capacity. Government initiatives for development of port connectivity as linkages to the hinterland would provide necessary boost to the sector.
Essar Ports – performanceYour Company is one of the largest private sector port and terminal companies in India and the year under review has been a good year for the Company.
Strategic partnership with Port of AntwerpYour Company has entered into a Strategic partnership with the Port of Antwerp International which is an investment arm of the Port of Antwerp (POA). POA is the second largest port in Europe.
The partnership envisages collaboration in the areas of training and consultancy services, port planning, traffic flow, quality and productivity improvement and will further build a mutually beneficial commercial relationship based on mutual business and investment preferences.
Port of Antwerp International UK Limited has also invested approximately Rs. 175 crore in the Global Depository Securities of your Company.
MM
TP
A
2005-06
Traffic Capacity570
660
2010-11 2016-17 2019-20
Source: Maritime Agenda 2010-2020, Ministry of Shipping
3000
2500
2000
1500
1000
500
0
884
1088
2019
2591
3126
2495
30 Annual Report 2011-12
Your Company has issued 52,666 Global Depository Securities representing 1,74,32,446 underlying equity shares of Rs. 10/- each at a premium of Rs. 90/- per share.
Highlights:
capacity terminal has been commissioned on April 1, 2011 by Vadinar Ports & Terminals Limited.
from 39.55 MMT in FY11 to 43.23 MMT in FY12.
(for the port segment prior to demerger) to Rs. 1,131 crore in FY12.
(for the port segment prior to demerger) to Rs. 913 crore in FY12.
segment prior to demerger) to Rs. 63.9 crore in FY12.
Essar Bulk Terminal Limited.
Environment resulted in ISO 9001 certification for quality; ISO 14001certification for Environment and OHSAS 18001 certificates for occupational health and safety for the Company’s Vadinar and Hazira facilities.
Performance UpdateThis was the first full year of operations for your Company post the demerger of shipping & logistics and oilfields services businesses. Despite global slowdown and several other challenges being faced by the Indian economy, your Company has performed exceptionally well in all areas of operations inter alia:
at Hazira and expansion of the port facilities at Vadinar for handling increased cargo.
billed volume but also substantial increase in realisation per tonne. The realisation on billed volume increased by 26% during the year from Rs. 185/MMT in FY11 to Rs. 233/MMT in FY12. The increase in billed volume and realisation has led to 51% growth in revenue from Rs. 746 crore in FY11 (for the port segment prior to demerger) to Rs. 1,131 crore in FY12.
facilities on April 1, 2011, which has increased revenues substantially due to higher facility usage charges and higher throughput. At Hazira, billed volume increased substantially as per the cargo handling contract with customers. 3rd party cargo handling at Hazira contributed 4% to the total revenue at Hazira.
one of the highest in the industry, an increase from 73% in FY11. The EBITDA of your Company increased by 65% from Rs. 550 crore in FY11 (for the port segment prior to demerger) to Rs. 913 crore in FY12.
liability of Rs. 235.5 crore as long term debt as per the agreement with the lenders of Vadinar Oil Terminal Limited, which will be paid between 2019 and 2023 and carries an interest of 5% p.a.
Progress of the project under implementation
iron ore is close to commissioning and is expected to be completed during second quarter of FY13.
coal berth at Salaya is as per plan. All important equipment like ship unloader, ship loader and stacker cum reclaimer have been delivered at the site.
is expected to commence during second half of FY13. Environment clearance and stage I forest clearance have been received and final forest clearance is expected shortly.
Risk and Concerns Implementation and operation of port and terminal
facilities are dependent on various regulatory approvals and government policies. Changes in macro economic factors like inflation, interest rate, world trade and natural catastrophes also play an important role in the trade of goods and cargo.
Any adverse change in the above may affect the performance of your Company. Your Company
1200.0
900.0
800.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0.0
CAGR 67%
CAGR 63%
Revenue (Rs. Crore)
EBITDA (Rs. Crore)
1131.0
746.5
427.4
326.5
550.9
913.2
1000.0
800.0
600.0
400.0
200.0
0.0FY10
FY10
FY11 EBITDA
Margin 74%
FY12 EBITDA
Margin 81%
FY11 FY12
FY11 FY12
427.4 502.9
244.9
698.9
432.9
Vadinar
Vadinar
Hazira
Hazira
427.4
368.3
147.1
596.2
300.5
31
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
periodically reviews the risks associated with the business and takes steps to mitigate and minimise the impact of risks.
4. QUALITY, SAFETY AND ENVIRONMENT Your Company, in order to ensure highest standard of
safety, has implemented and initiated various measures
Management Systems. The initiatives by your Company have been rewarded with several recognitions. Some of the key recognitions are as follows:
certified by British Standard for Occupational Health & Safety Advisory Services (OHSAS) for, ‘Zero Gas Release’, ‘Zero Fire Incident’ and ‘Zero Loss Time Accident or No Loss Time Accident’.
during the year under review.
VOTL successfully achieved the ‘Zero Spill / No Spill’, target and ‘Reduction of Emission’.
for the following ISO certifications:
System by ABS
- ISO 14001:2004 Environment Management System by Det Norske Veritas (DNV)
- ISO 18001:2007 OHSAS by DNV
- ISO 28000:2007 Security Management System by ABS
- OCIMF Terminal Baseline Criteria Certification by ABS
Zero Loss Time Injury during the year.
Health & Safety
- ISO 14001:2004 Environment Management
The terminal of EBTL also has the Navigation Safety at Ports Committee (NSPC) approval from the Director General of Shipping, Mumbai.
5. INTERNAL CONTROL FRAMEWORK Your Company conducts its business with integrity and
high standards of ethical behaviour and in compliance with the laws and regulations that govern its business. Your Company has a well-established framework of internal controls in its operations, including suitable monitoring procedures. In addition to an external audit, the financial and operating controls of your Company at various locations are reviewed by Internal Auditors, who report their observations to the Audit Committee of the Board.
6. HUMAN RESOURCE Human resources have always been the key to
success of your Company’s business. New teams were constituted to steer projects at Salaya Port near Jamnagar and Paradip Port in Odisha. A balance of internal and external talent was maintained to ensure right skills are available to initiate project activities. A large number of fresh talent comprising engineers and management graduates were deployed to nurture future Essar Ports facilities.
At the existing ports of Hazira and Vadinar, special emphasis was laid on the training of employees with a combination of “On the job and Off the job” training. Your Company has introduced technology-enabled HR practices in Performance Management and Training to streamline and strengthen these practices.
7. INFORMATION TECHNOLOGY Your Company successfully implemented SAP in its
financial and related systems. For dry bulk as well as oil terminals, systems have been implemented to capture end-to-end workflow covering all activities from pre-arrival intimations to actual departure of vessels. Expected berth occupancy is being plotted thereby optimising the berth utilisation and increasing berth efficiency. Various dashboard reports have been implemented in the system for berth performance and resource monitoring.
8. SUBSIDIARIES As on March 31, 2012, the following were the subsidiaries
of your Company:
1. Vadinar Oil Terminal Limited (VOTL)
2. Vadinar Ports & Terminals Limited (a subsidiary of VOTL)
3. Essar Bulk Terminal Limited
4. Essar Bulk Terminal (Salaya) Limited
5. Essar Paradip Terminals Limited
6. Essar Bulk Terminal Paradip Limited
In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.
9. DIRECTORS In accordance with the provisions of the Companies Act,
1956 and the Articles of Association of the Company, Mr. Deepak Kumar Varma, Mr. K. V. Krishnamurthy and Mr. Rajiv Agarwal retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.
32 Annual Report 2011-12
Mr. Shashi Ruia resigned from the directorship of your Company on May 25, 2012. Your Board places on record their appreciation for the invaluable contribution made by Mr. Ruia in the growth and progress of the Company during his tenure as Director.
Mr. Jan Adam has been appointed as an Additional Director on May 30, 2012. The Company has received a notice from a member proposing the appointment of Mr. Adam as a Director of your Company.
10. AUDITORS Your Company’s Auditors, Messrs. Deloitte Haskins
& Sells, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.
The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 (the Act) and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.
11. CORPORATE GOVERNANCE The Company has complied with the requirements
under the Corporate Governance reporting system. The disclosures as required therein have been furnished in the Annexure to the Directors’ Report under the head “Corporate Governance”.
12. PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988
This does not apply to your Company as the Ports & Terminals industry is not included in the Schedule to the relevant rules.
Foreign exchange earnings and outgo are summarised below:
Total Foreign Exchange:(1) Earned (including freight, charter, : Rs. 7.98 crore
hire earnings, interest income, etc.)
(2) Used (including loan repayments, : Rs. 11.67 crore interest,operating expenses, etc.)
13. PARTICULARS OF EMPLOYEES Information as per Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the Annexure forming part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees under u/s 217(2A) of the said Act. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary for the same at the Registered Office of the Company.
14. STATEMENT OF DIRECTORS RESPONSIBILITIES Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there have been no material departures;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
d) the Directors have prepared the annual accounts on a going concern basis.
15. APPRECIATION AND ACKNOWLEDGEMENTS Your Directors express their sincere thanks and
appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company.
Your Directors also thank its bankers and other business associates for their continued support and co-operation during the year.
For and on behalf of the Board
Rajiv Agarwal Shailesh Sawa
Managing Director Director Finance
Mumbai
May 30, 2012
33
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
Annexure to the Director’s ReportInformation required to be disclosed as per Securities and Exchange Board of India (Employees Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999
Sr.
No.
Particulars Details
(a) Options granted 7,40,334
(b) The pricing formula The Options have been granted at a price which is equal to the closing
price of the equity shares on the stock exchange having the highest trading
volume a day prior to the meeting of the Compensation Committee.
(c) Options Vested Nil
(d) Options Exercised Nil
(e) Total number of shares arising as a result of exercise of
Options (Equity shares of Rs. 10/- each)
Not Applicable
(f) Options lapsed Nil
(g) Variation of terms of Options None
(h) Money realised by exercise of Options Nil
(i) Total Number of Options in force 7,40,334
(j) Employee-wise details of options granted to
i) Senior Managerial Personnel: Mr. Rajiv Agarwal - 2,31,954
Mr. Shailesh Sawa - 1,23,285
ii) Any other employee who receives a grant,
in any one year, of Options amounting to
5% or more of Options granted during
that year
Mr. Tej Nargundkar - 1,47,595
Capt. Rajen Sachar - 43,408
Capt. Rajesh Beri - 67,797
Mr. P. K. Srivastava - 49,568
Mr. S. Shanmugam - 45,952
iii) Identified employees who were granted Options,
during any one year, equal to or exceeding 1%
of the issued capital (excluding outstanding
warrants and conversions) of the Company at
the time of grant
Nil
(k) Diluted Earnings Per Share (EPS) pursuant to issue of
shares on exercise of option calculated in accordance
with [Accounting Standard (AS) 20 ‘Earnings per
Share’].
Not applicable as the Options are anti-dilutive.
(l) Where the Company has calculated the employee
compensation cost using the intrinsic value of the
stock Options, the difference between the employee
compensation cost so computed and the employee
conpensation cost that shall have been recognised if it
had used the fair value of the difference on profits and
on EPS of the Company shall also be disclosed
If the compensation cost on account of stock Options was computed
using the fair value method, the compensation cost and loss for the year
would have been higher by Rs. 26.78 lakhs. The impact on EPS for the
year would be Rs. 0.01.
(m) Weighted-average exercise prices and weighted-
average fair values of Options shall be disclosed
separately for Options whose exercise price either
equals or exceeds or is less than the market price of
the stock.
Rs. 71.10 per Option
(n) A description of the method and significant
assumptions used during the year to estimate the fair
values of Options, including the following weighted-
average information:
(i) Risk-free interest rate 8.36%
(ii) expected life 5 - 7 years
(iii) expected volatility 64.81%
(iv) expected dividends Nil
(v) the price of the underlying share in market at
the time of Option grant
Rs. 71.10
34 Annual Report 2011-12
1. STATEMENT ON COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:
Your Company believes that adhering to global standards of Corporate Governance is essential to enhance shareholder
value and achieve long term corporate goals. The Company’s philosophy on Corporate Governance stresses the
importance of transparency, accountability and protection of shareholder interests. The Board oversees periodic review
of business plans, monitors performance and ensures compliance of regulatory requirements including SEBI Regulations
and Listing requirements.
2. BOARD OF DIRECTORS:
The Independent Directors constitute half the total number of Directors.
A. Composition, Category, Attendance and Number of other Directorships of the Directors are furnished below:
As at March 31, 2012, the Board consisted of ten members. The composition, category of directors and directorships
held in other companies was as under:
Name of Director Category of Director * No. of outside
Directorships in other
Indian public companies
**No. of Committee
positions held in other public
companies
Chairman Member
Mr. Shashi Ruia (Chairman) Promoter Non-Executive 2 – –
Mr. Anshuman Ruia Promoter Non-Executive 2 – 1
Mr. R. N. Bansal Independent Non-Executive 8 4 3
Mr. K. V. Krishnamurthy Independent Non-Executive 8 4 4
Mr. Dilip J. Thakkar Independent Non-Executive 13 5 4
Mr. Deepak Kumar Varma Independent Non-Executive 3 – 2@ Mr. T. S. Narayanasami Independent Non-Executive 8 – 4
Mr. Rajiv Agarwal (CEO & Managing Director)
Non-Promoter Executive 8 – 5
@ Mr. K. K. Sinha (Chief Executive Officer) Non-Promoter Executive 8 – 6
Mr. Shailesh Sawa (Director Finance) Non-Promoter Executive 7 – 5
* excludes foreign companies, private limited companies, Section 25 companies and Alternate Directorships. ** includes
membership of Audit and Shareholders’ Grievance Committee only. @ Mr. T. S. Narayanasami has been appointed as an
Independent Director and Mr. K. K. Sinha has been appointed as a Director in wholetime employment w.e.f. July 4, 2011.
Mr. N. Srinivasan, Independent Director and Mr. A. R. Ramakrishnan, Wholetime Director resigned from the Board of the Company
w.e.f. May 22, 2011, Mr. V. Ashok, Director resigned from the Board of the Company w.e.f. June 14, 2011 and Mr. S. V. Venkatesan,
Independent Director resigned from the Board of the Company w.e.f. July 5, 2011.
CORPORATE GOVERNANCE REPORT
35
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
B. Details of Board Meetings held during the year:
Sr.
No.
Date Board Strength No. of Directors present
1 May 3, 2011 12 11
2 July 4, 2011 9 8
3 August 9, 2011 10 8
4 October 19, 2011 10 8
5 February 2, 2012 10 7
C. Attendance of Directors at Board Meetings and at the last Annual General Meeting:
Director No. of Board Meetings attended Attendance at last AGM
Mr. Shashi Ruia 3 N
Mr. Anshuman Ruia 4 N
Mr. R. N. Bansal 4 Y
Mr. K. V. Krishnamurthy 5 N
Mr. Dilip J. Thakkar 2 N
Mr. Deepak Kumar Varma 5 N
Mr. T. S. Narayanasami* 2 N
Mr. Rajiv Agarwal 5 Y
Mr. K. K. Sinha* 3 Y
Mr. Shailesh Sawa 5 Y
Mr. N. Srinivasan** 1 NA
Mr. S. V. Venkatesan# 2 NA
Mr. A. R. Ramakrishnan** 1 NA
Mr. V. Ashok+ Nil NA
* were appointed as a Directors on July 4, 2011
**ceased to be Directors on May 22, 2011
#ceased to be Director on July 5, 2011
+ceased to be Director on June 14, 2011
3. AUDIT COMMITTEE:
The Audit Committee inter alia performs all the functions
specified under the Companies Act, 1956 and Clause
49 of the Listing Agreement.
Composition:
As on March 31, 2012, the Committee comprised
of four Directors of which three were Independent
Directors.
The Chairman of the Audit Committee is an Independent
Director. All the members of the Committee are financially
literate and have relevant financial management and / or
audit exposure. The Managing Director, Chief Executive
Officer, Director Finance, Head - Accounts, Statutory
Auditors and Internal Auditors attend the meetings. The
Company Secretary is the Secretary to the Committee.
Details of Audit Committee Meetings held during the year:
Sr. No.
Date Committee Strength No. of Members present
1 May 3, 2011 4 4
2 July 4, 2011 4 4
3 August 9, 2011 4 3
4 October 19, 2011 4 3
5 February 2, 2012 4 3
36 Annual Report 2011-12
Attendance at Audit Committee Meetings:
Director No. of meetings held No. of meetings attended
Mr. R. N. Bansal, Chairman 5 4
Mr. N. Srinivasan* 5 1
Mr. S. V. Venkatesan** 5 2
Mr. Anshuman Ruia 5 3
Mr. Deepak Kumar Varma# 5 4
Mr. K. V. Krishnamurthy+ 5 3
* resigned from the Audit Committee w.e.f. May 22, 2011
**resigned from the Audit Committee w.e.f. July 5, 2011
#appointed on the Audit Committee on May 3, 2011
+appointed on the Audit Committee on July 4, 2011
4. REMUNERATION TO DIRECTORS:
Details of Remuneration paid to the Managing Director and Wholetime Directors during the year ended March 31,
2012 is as under:
(Rs.)
Name of Director Basic Salary Allowances,
Perquisites and
other benefits
Contribution
to Provident &
Superannuation Fund
Total
Mr. Rajiv Agarwal, CEO &
Managing Director
44,37,228 1,66,17,770 5,32,464 2,15,87,462
Mr. A. R. Ramakrishnan*
Wholetime Director
6,83,871 8,19,763 82,065 15,85,699
Mr. K. K. Sinha*
Chief Executive Officer
39,35,011 28,17,133 4,72,201 72,24,345
Mr. Shailesh Sawa
Director Finance
46,64,043 61,37,336 5,59,680 1,13,61,059
* was in the employment of the Company for part of the year.
The services of the aforesaid Executive Directors can be mutually terminated by giving three months notice or three
months salary in lieu thereof.
Stock Options
The following Stock Options have been granted to the Executive Directors:
Name of Director No. of Stock Options Granted
Mr. Rajiv Agarwal 2,31,954
Mr. Shailesh Sawa 1,23,285
These Stock Options have been granted on November 28, 2011. One third of the Options granted shall be vested at the
end of the third, fourth and fifth years respectively from the date of grant. The vested Options can be exercised over a
period of seven years from the date of vesting of the Options. One Option is equal to one Equity Share of Rs. 10/- each
of the Company. The Options have been granted at a price of Rs. 70.10 per Option.
37
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
Details of sitting fees paid to Non-Executive Directors for the meetings held during the year ended March 31, 2012:
Non-Executive Directors Sitting Fees paid for Board /
Committee meetings (Rs.)
Mr. Shashi Ruia 40,000.00
Mr. Anshuman Ruia 90,000.00
Mr. R. N. Bansal 120,000.00
Mr. K. V. Krishnamurthy 110,000.00
Mr. Dilip J. Thakkar 30,000.00
Mr. Deepak Kumar Varma 140,000.00
Mr. S. V. Venkatesan* 30,000.00
Mr. T. S. Narayanasami* 40,000.00
* were directors for part of the year
Except for the Stock Options mentioned above, no shares or convertible instruments are held by any members of the Board.
5. SHAREHOLDERS’ GRIEVANCE COMMITTEE AND SHARE TRANSFER COMMITTEE:
A. Shareholders Grievance Committee:
Terms of Reference:
To redress grievances and complaints of members on all matters pertaining to their shareholding in the Company.
Composition:
The Committee comprised of Mr. R. N. Bansal,
Mr. Deepak Kumar Varma, Mr. Rajiv Agarwal and
Mr. Shailesh Sawa.
The committee met 2 times during the year ended
March 31, 2012.
B. Share Transfer Committee:
Terms of Reference:
To oversee the functioning of the Registrar &
Share Transfer Agent and ensure that the process
of share transfers, transmission and issue of
duplicate shares is effective and efficient.
Composition:
The Committee comprised of Mr. Rajiv Agarwal,
Mr. K. K. Sinha and Mr. Shailesh Sawa.
The Board has further authorised the Executive
Directors and Company Secretary to approve the
Share Transfers and other related transactions
on a regular basis under the supervision of the
Committee.
The committee met 4 times during the year ended
March 31, 2012.
Details of shareholders complaints received,
solved and pending share transfers:
There were no complaints pending at the beginning
of the year. A total of 141 complaints were
received during the year ended March 31, 2012,
most of which being non-receipt of dividend and
non-receipt of share certificates. All the complaints
were redressed under the supervision of the
Committee and no complaints were outstanding
as on March 31, 2012.
All the valid share transfer requests received during
the year were duly attended to and processed in
time. There were no valid requests pending for
share transfers as on March 31, 2012.
6. GENERAL BODY MEETING:
(a) Details of General Meetings held in last three years:
Financial year Meeting Date Time Location
2008 - 09 AGM 31-07-09 3.30 PM Administrative Building, Essar
Refinery Complex, Okha Highway
(SH-25), Taluka Khambhalia,
District - Jamnagar, Gujarat 361 305
2009 - 10 AGM 24-07-10 3.00 PM
EGM 30-11-10 10.00 AM
2010 - 11 AGM 09-09-11 12.00 noon
38 Annual Report 2011-12
8. MEANS OF COMMUNICATION:
Financial results and other information about the Company The quarterly and annual financial results are submitted
to the BSE Limited and National Stock Exchange of
India Limited which is uploaded on their websites.
These results are also displayed on the Company’s
website: www.essar.com
Publication of financial results Published in major newspapers such as Business
Standard and Jai Hind
Presentation to Institutional Investors and to the Analyst Press releases and presentations made to Institutional
Investors and Analysts are displayed on the Company’s
website: www.essar.com
Management Discussion & Analysis Forms part of the Annual Report, which is mailed to the
shareholders of the Company
9. GENERAL SHAREHOLDERS INFORMATION:
A. Annual General Meeting details:
Date September 27, 2012
Venue Administrative Building, Essar Refinery Complex
Okha Highway (SH-25), Taluka Khambhalia
District Jamnagar, Gujarat 361 305
Time 2.30 p.m.
Book Closure September 22, 2012 to September 27, 2012
(both days inclusive)
(b) Special Resolutions passed in the previous
three Annual General Meetings:
July 24, 2010:
A special resolution enabling the Company
to issue Equity Shares, Foreign Currency
Convertible Bonds, Global Depository Receipts,
etc. was passed:
September 9, 2011:
- Remuneration to be paid to Mr. Rajiv
Agarwal, CEO & Managing Director.
- Remuneration to be paid to Mr. Shailesh
Sawa, Director Finance.
- Remuneration to be paid to Mr. K. K. Sinha,
Chief Executive Officer.
- To issue Equity Shares, Foreign Currency
Convertible Bonds, Global Depository
Receipts, etc.
- Implement the Stock Option Scheme and
grant of Options thereunder.
- Extend the Stock Option Scheme to
employees of holding and subsidiary
companies.
(c) No resolutions are proposed to be passed at
the ensuing Annual General Meeting which
require approval of members through Postal
Ballot.
7. DISCLOSURES:
transactions made by the Company with its
Promoters, Directors or Management, their
relatives, its subsidiaries, etc., that may have
potential conflict with the interest of the Company
at large.
are disclosed in Note No. 32 forming part of the
financial statements in the Annual Report.
has been imposed on the Company by Stock
Exchanges / SEBI /Statutory Authorities on
matters related to Capital Markets.
39
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
B. Financial Calendar:
Financial year of Company April 1, 2012 to March 31, 2013
First Quarter results On or before August 14, 2012
Second Quarter results On or before November 14, 2012
Third Quarter results On or before February 14, 2013
Annual results for the year On or before May 30, 2013
C. Registrars and Share Transfer Agents:
Data Software Research Company Private Limited
19, Pycrofts Garden Road, Off Haddows Road
Nungambakkam, Chennai- 600 006
Tel:(044) 2821 3738, 2821 4487
Fax: (044) 2821 4636
E-Mail: [email protected]
D. Share Transfer System:
To expedite the process of share transfers,
transmission, etc., the Board of your Company
has delegated these powers to the Executive
Directors and the Company Secretary.
All valid share transfer requests received by the
Company in physical form are registered within
an average period of 15 days. The Company
dematerialises the shares after getting the
dematerialisation requests being generated by the
Depository Participants.
E. Listing on Stock Exchanges:
The Company’s securities are listed on the following Stock Exchanges:
BSE Limited National Stock Exchange of India Limited
Phiroze Jeejeebhoy Towers
Dalal Street, Mumbai 400 023
Exchange Plaza, Bandra Kurla Complex
Bandra East, Mumbai 500 051
Code: 500630 Code : ESSARPORTS
Annual Listing fee for the year 2012-13 has been paid to both the exchanges.
Market price data (High/Low) during each month in the year 2011-2012 on the BSE Limited and National Stock
Exchange of India Limited:
BSE Limited National Stock Exchange of India Limited
Month Highest Lowest Month Highest Lowest
May 31, 2011 125.00 75.00 May 31, 2011 128.20 77.50
June 125.00 88.50 June 125.00 88.75
July 106.45 91.00 July 107.40 85.70
August 93.75 67.25 August 95.90 67.05
September 78.50 58.50 September 78.40 58.00
October 80.30 51.60 October 80.40 51.55
November 96.90 63.15 November 96.90 63.50
December 73.45 46.90 December 73.05 46.65
January 66.75 49.60 January 66.85 49.00
February 73.75 59.40 February 73.70 59.25
March 84.95 63.35 March 85.00 63.10
Scrip Code : 500630 Scrip Code : ESSARPORTS
* The shares of the Company were re-listed subsequent to the demerger of the shipping & logistics and oilfields
services businesses w.e.f. May 31, 2011 and hence the share price data and movement given above is with effect
from May 31, 2011.
40 Annual Report 2011-12
Share Price performance in comparison to BSE Sensex
BS
E S
ensex
Share
Price
Months
Share price on BSE BSE Sensex
Share Price Movement versus BSE Sensex
120.00
19000
18500
18000
17500
17000
16500
16000
15500
15000
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
May
- 11
Jun -
11
Jul -
11
Aug -
11
Sep
- 1
1
Oct
- 11
Nov
- 11
Dec -
11
Jan -
12
Feb
- 1
2
Mar
- 12
F. Shareholding Pattern as on March 31, 2012:
Shareholding by No. of Shares %
Promoters 34,35,87,159 83.71
Financial Institutions / Mutual Funds / Banks / Insurance Companies 5,11,928 0.12
Other Corporate Bodies 96,04,924 2.34
Non-Domestic Companies / Foreign Banks 15,115 0.01
Foreign Institutional Investors 3,41,73,275 8.33
Non-Resident Individuals 6,30,617 0.15
Public 2,19,32,534 5.34
Total 41,04,55,552 100.00
G. Distribution of Shareholding as on March 31, 2012:
No. of equity shares held Number of
shareholders
% of
shareholders
Total number
of shares
% of holding
Upto 5000 105,335 99.55 16,266,563 3.96
5001-10000 226 0.21 1,623,526 0.40
10001-20000 96 0.09 1,377,932 0.34
20001-30000 37 0.04 921,497 0.22
30001-40000 23 0.02 780,098 0.19
40001-50000 14 0.01 629,566 0.15
50001-100000 33 0.03 2,484,872 0.61
100001 and above 44 0.05 386,371,498 94.13
Total 105,808 100.00 410,455,552 100.00
41
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
H. Compliance Officer : Mr. Manoj Contractor
Company Secretary
I. Registered Office : Administrative Building
Essar Refinery Complex
Okha Highway (SH-25)
Taluka Khambhalia
District Jamnagar
Gujarat 361 305
J. Corporate Office : Essar House
11, Keshavrao Khadye Marg
Mahalaxmi, Mumbai 400 034
Tel: (022) 6660 1100
Fax: (022) 2354 4312
E Mail:[email protected]
K. Status of Dematerialisation of shares as on March 31, 2012 (POST DEMERGER):
Mode No. of shares No. of folios %
Physical 56,60,942 54,512 1.38
Demat 40,47,94,610 51,296 98.62
TOTAL 41,04,55,552 1,05,808 100.00
10. NOMINATION FACILITY:
Shareholders holding shares in physical form and
desirous of making a nomination in respect of their
shareholding in the Company, as permitted under
Section 109A of the Companies Act, 1956 are
requested to submit to the R&T Agent of the Company
the prescribed nomination form.
11. OUTSTANDING GDRS / ADRS / WARRANTS OR
ANY CONVERTIBLE INSTRUMENTS, CONVERSION
DATE AND LIKELY IMPACT ON EQUITY:
As on March 31, 2012 there are 2,800 Foreign
Currency Convertible Bonds (FCCB’s) aggregating
USD 40,000,000.00 which can be converted into
equity shares of the Company at a conversion price of
Rs. 91.70 per share. As per the terms of the offering,
the USD - INR conversion rate has been fixed at
1 USD = 46.94 INR. These FCCBs are listed on the
Singapore Exchange Securities Trading Limited.
12. SECRETARIAL AUDIT:
A qualified practicing Company Secretary carries out
secretarial audit to reconcile the total admitted capital
with National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL) and
the total issued and listed capital. The audit confirms
that the total issued / paid up capital is in agreement
with the total number of shares in physical form and the
total number of dematerialised shares held with NSDL
and CDSL.
13. NON-MANDATORY REQUIREMENTS:
1. Remuneration Committee:
The Committee comprises of three Non-Executive
Directors with the Company Secretary as the
Secretary of the Committee. The Committee is
empowered to formulate and recommend to
the Board from time to time, the compensation
structure for Managing / Executive / Wholetime
Directors and to administer and supervise the
Employee Stock Option Schemes, whenever
applicable.
2. Shareholders right:
Quarterly financial results are available on the
website of the Company i.e. www.essar.com. No
separate financials are sent to shareholders of the
Company.
3. Audit qualifications:
There are no audit qualifications in the Auditor’s
report on the financial statements to the
Shareholders of the Company.
42 Annual Report 2011-12
Auditor’s Certificate on Corporate Governance
To the Members of Essar Ports Limited
We have examined the compliance of conditions of corporate
governance by Essar Ports Limited (formerly known as Essar
Shipping Ports & Logistics Limited) (“The Company”) for the
year ended March 31, 2012, as stipulated in Clause 49 of the
Listing Agreement entered into by the said Company with
Stock Exchanges in India.
The compliance of conditions of Corporate Governance is the
responsibility of the management. Our examination has been
limited to review of procedures and implementation thereof,
adopted by the Company for ensuring the compliance of
conditions of the Corporate Governance. It is neither an audit
nor an expression of opinion on the financial statements of
the Company.
In our opinion and to the best of our information and according
to the explanations given to us, we certify that the Company
For Deloitte Haskins & Sells
Chartered Accountants
(Firm Regn. No. 117365W)
Khurshed Pastakia
Partner
Mumbai (Membership No. 31544)
May 30, 2012
Rajiv Agarwal
CEO & Managing Director
Mumbai
May 30, 2012
Declaration on Compliance of the Company’s Code of
Conduct to the Members of Essar Ports Limited
has complied with the conditions of Corporate Governance
as stipulated in the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance
as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted
the affairs of the Company.
The Company has framed a specific Code of Conduct for
the members of the Board and the Senior Management
Personnel of the Company pursuant to Clause 49 of the
Listing Agreement with the Stock Exchanges to further
strengthen Corporate Governance practices in the
Company.
All the members of the Board and Senior Management
Personnel of the Company have affirmed due observance
of the said Code of Conduct in so far as it is applicable to
them and there is no non-compliance thereof during the
year ended March 31, 2012.
43
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
TO THE MEMBERS OF
ESSAR PORTS LIMITED
(Formerly known as Essar Shipping Ports & Logistics
Limited)
1. We have audited the attached Balance Sheet of ESSAR
PORTS LIMITED (formerly known as Essar Shipping
Ports & Logistics Limited) (“the Company”) as at March
31, 2012, the Statement of Profit and Loss and the Cash
Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial
statements are the responsibility of the Company’s
Management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting
the amounts and the disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and the significant estimates
made by the Management, as well as evaluating the
overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order,
2003 (CARO) issued by the Central Government in
terms of Section 227(4A) of the Companies Act, 1956,
we enclose in the Annexure a statement on the matters
specified in paragraphs 5 of the said Order.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report as follows:
a. we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit;
b. in our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
d. in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956;
e. in our opinion and to the best of our information
and according to the explanations given to us, the
said accounts give the information required by the
Companies Act, 1956 in the manner so required
and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in the case of the Balance Sheet, of the state of
affairs of the Company as at March 31, 2012;
ii. in the case of the Statement of Profit and Loss,
of the loss of the Company for the year ended
on that date; and
iii. in the case of the Cash Flow Statement, of the
cash flows of the Company for the year ended
on that date.
5. On the basis of the written representations received
from the Directors as on March 31, 2012 taken on
record by the Board of Directors, none of the Directors
is disqualified as on March 31, 2012 from being
appointed as a director in terms of Section 274(1)(g) of
the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 30, 2012
Standalone Auditors’ Report
44 Annual Report 2011-12
(Referred to in paragraph 4 of our report of even date)
(i) Having regard to the nature of the Company’s business /
activities / result, clauses (vi), (viii), (xii), (xiii), (xiv), (xviii), (xix)
and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets.
(b) The fixed assets were physically verified during
the year by the Management in accordance with
a regular programme of verification which, in our
opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According
to the information and explanation given to us,
no material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information
and explanations given to us, the Company has
not made substantial disposals of fixed assets
during the year and the going concern status of the
Company is not affected.
(iii) In respect of its inventory, as explained to us, the
Company is not required to maintain any inventories for
its operation. Hence the provisions of clause (ii) (a) to (ii)
(c) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and
explanations given to us, the Company has neither
granted nor taken any loans, secured or unsecured,
to / from companies, firms or other parties listed in
the Register maintained under Section 301 of the
Companies Act, 1956. Hence, the provisions of clause
(iii) (b) to (iii) (g) of the Order are not applicable to the
Company.
(v) In our opinion and according to the information and
explanations given to us, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business with regard to
purchases of inventory and fixed assets and the sale of
goods and services. During the course of our audit, we
have not observed any major weakness in such internal
control system.
(vi) In our opinion and according to information and
explanation given to us, there are no contracts
or arrangements that need to be entered into the
register maintained in pursuance of Section 301 of the
Companies Act, 1956.
(vii) In our opinion, the Company has an adequate internal
audit system commensurate with the size and the nature
of its business.
(viii) According to the information and explanations given to
us in respect of statutory dues:
(a) The Company has generally been regular in
depositing undisputed dues, including Provident
Fund, Income-tax, Tax Deducted at source, Sales
Tax, Service Tax, Custom Duty, Cess and other
material statutory dues applicable to it with the
appropriate authorities. As informed to us, the
provisions for Investors Education and Protection
Fund, Employee’s State Insurance, Sales Tax,
Wealth Tax and Excise duty were not applicable to
the Company during the year.
(b) There were no undisputed amounts payable in
respect of above statutory dues in arrears as
at March 31, 2012 for a period of more than six
months from the date they became payable.
(c) There were no due pending to be deposited on
account of any dispute in respect of Income-tax,
Service Tax, Custom Duty and Cess as on March
31, 2012.
(ix) The Company does not have accumulated losses as at
the end of the financial year. The Company has incurred
cash losses in the financial year covered by the audit;
however no cash loss were incurred in the immediately
preceding financial year.
(x) In our opinion and according to the information and
explanations given to us, the Company has not defaulted
in the repayment of dues to banks, financial institutions
and debenture holders.
(xi) In our opinion and according to the information and
explanations given to us, the terms and conditions of
the guarantees given by the Company for loans taken by
others from banks and financial institutions are not prima
facie prejudicial to the interests of the Company.
Annexure to the Auditors’ Report
45
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(xii) In our opinion and according to the information and
explanations given to us, working capital loans of
Rs. 30,000 lakhs have been applied by the Company
for purchase of investment in the equity of subsidiary
companies.
(xiii) On the basis of an overall examination of the balance
sheet as at March 31, 2012 and the cash flow statement
of the Company for the year then ended and according
to the information and explanation given to us, we report
that funds raised on short-term basis amounting to
Rs. 29,744.01 lakhs have, prima facie, been used for
long term purpose.
(xiv) To the best of our knowledge and according to the
information and explanations given to us, no fraud by
the Company and no material fraud on the Company
has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 30, 2012
Annexure to the Auditors’ Report
46 Annual Report 2011-12
(Rs. in lakhs)
Particulars Note No.As at
March 31, 2012
As at
March 31, 2011
I. EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 41,058.61 41,058.61
(b) Reserves and surplus 4 223,352.61 232,515.73
264,411.22 273,574.34
2 Non-current liabilities
(a) Long-term borrowings 5 40,462.60 66,618.00
(b) Deferred tax liabilities (Net) 29 – –
(c) Other long term liabilities 6 12,955.94 2,119.88
(d) Long-term provisions 7 139.57 107.06
53,558.11 68,844.94
3 Current liabilities
(a) Short-term borrowings 8 3,500.00 3,500.00
(b) Trade payables 9 1,556.58 –
(c) Other current liabilities 10 57,129.70 6,853.27
(d) Short-term provisions 7 2,172.03 169.69
64,358.31 10,522.96
Total 382,327.64 352,942.24
II. ASSETS
1 Non-current assets
(a) Fixed assets
i) Tangible assets 11 8,890.70 4,639.70
(b) Non-current investments 12 365,942.00 331,296.60
(c) Loans and advances 13 1,217.92 585.67
(d) Other non - current assets 14b 1,662.72 –
377,713.34 336,521.97
2 Current assets
(a) Trade receivables 14a 730.97 –
(b) Cash and bank balances 15 212.86 3,867.08
(c) Loans and advances 13 2,143.07 12,454.19
(d) Other current assets 14b 1,527.40 99.00
4,614.30 16,420.27
Total 382,327.64 352,942.24
See accompanying notes forming part of the financial statements
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
Standalone Balance Sheet as at March 31, 2012
47
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
(Rs. in lakhs)
Particulars Note No.For the year ended
March 31, 2012
For the year ended
March 31, 2011
REVENUE FROM OPERATIONS 16 3,622.00 48,686.69
Other income 17 1,634.36 17,249.35
Total Revenue 5,256.36 65,936.04
EXPENSES
Employee benefits expense 18 927.46 4,780.35
Operating expenses 19 726.48 31,275.89
Establishment and other expenses 20 698.39 1,797.39
Total Expenses 2,352.33 37,853.63
Earning before finance cost, depreciation and
amortisation and tax 2,904.03 28,082.41
Finance costs 21 9,239.93 18,407.52
Profit before depreciation and amortisation and tax (6,335.90) 9,674.89
Depreciation and amortisation expense 11 740.33 5,987.41
Profit before tax (7,076.23) 3,687.48
Tax expense
Current tax (0.20) (1,600.00)
Deferred tax – –
Tax adjustment for earlier years (23.25) –
Profit / (Loss) for the year after tax (7,099.68) 2,087.48
Earnings per share: 26
Basic and diluted (face value Rs. 10/- per share) (1.73) 0.51
See accompanying notes forming part of the financial statements
Standalone Statement of Profit and Loss for the year ended March 31, 2012
48 Annual Report 2011-12
(Rs. in lakhs)
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
A CASH FLOW FROM OPERATING ACTIVITIES
Profit / (Loss) before tax (7,076.23) 3,687.48
Adjustments for :
Depreciation / impairment 740.33 5,987.41
Interest and finance expenses 9,239.93 18,407.52
Interest income from long term investment – (1,740.06)
Interest income (39.98) (5,576.36)
Interest on income tax refund (1.48) –
Loss / (Profit) on sale of assets – (3,011.46)
Profit on sale of long term investment (2.44) (5,259.71)
Profit on sale of investments – (84.96)
Dividend on investments – (108.84)
Foreign exchange difference loss / (gain) 402.74 (1,467.46)
Operating profit before working capital changes 3,262.87 10,833.56
Adjustments for:
Trade and other receivables (2,674.33) (5,700.01)
Inventories – (431.19)
Trade and other payables 12,613.38 9,310.72
Cash generated from operations 13,201.92 14,013.08
Income taxes refund / (paid) net (267.02) (1,595.00)
Net cash flow from operating activities 12,934.90 12,418.08
B CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets including capital work-in-progress / advance (433.97) (11,709.47)
Proceeds from sale of fixed assets – 3,178.36
Purchase of current investments – (105,881.25)
Proceeds from sale of current investments – 111,564.52
Proceeds from sale of non - current investments – 37,040.75
Proceeds from sale of investments in subsidiaries 4.88 –
Proceeds from maturity of fixed deposit 1,500.00 –
Investment in shares of subsidiaries (5,677.00) (29,228.88)
Advance towards share application money (100.00) (132,040.39)
Fixed deposits placed for a period of more than three months, net (160.00) (1,460.75)
Loans and advances given to subsidiaries and other body corporates – (14,253.51)
Loans and advances repaid by subsidiaries and other body corporates – 37,339.25
Dividend on investments – 108.84
Interest income from long term investment – 1,740.06
Interest received 138.25 5,799.28
Net cash used for investing activities (4,727.84) (97,803.23)
Standalone Cash Flow Statement for the year ended March 31, 2012
49
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
C CASH FLOW FROM FINANCING ACTIVITIES
Interest and finance expenses paid (8,021.28) (16,995.59)
Proceeds from FCCB – 130,964.40
Proceeds from secured loan 20,000.00 124,226.83
Proceeds from commercial papers – 16,000.00
Repayment of secured loan – (59,339.41)
Repayment of finance lease obligations – (4,219.48)
Repayment of commercial papers – (16,000.00)
Repayment of unsecured loan (22,500.00) (86,250.00)
Net cash flow from financing activities (10,521.28) 88,386.75
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (2,314.22) 3,001.60
Cash and cash equivalents given on demerger – (3,832.00)
Cash and cash equivalents acquired on merger – 9.99
Cash and cash equivalents at the beginning of the year 2,367.08 3,187.47
Cash and cash equivalents at end of the year 52.86 2,367.08
NOTES :
Cash and cash equivalents include :
Cash and bank balances 52.86 2,367.08
Total cash and cash equivalents 52.86 2,367.08
Balances in fixed deposits (maturity period of more than 3 months) 160.00 1,500.00
CASH AND BANK BALANCES AS PER NOTE 15 212.86 3,867.08
Note:
1. The above cash flow statement excludes assets / liabilities (other than cash balance) on merger from EIL and EPTL and
transfer to ESL on demerger, as it is non cash transaction (refer note no. 22).
2. Cash flow statement has been prepared under the indirect method as set out in Accounting Standards 3 - “Cash Flow
Statement” referred to in Section 211(3C) of the Companies Act, 1956.
3. During the year share application money of Rs.10,382.86 lakhs placed with subsidiaries has been converted into share
capital of subsidiaries.
See accompanying notes forming part of the financial statements
Standalone Cash Flow Statement for the year ended March 31, 2012
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
50 Annual Report 2011-12
Notes forming part of financial statements
1. COMPANY PROFILE
Essar Ports Limited (EPL / Company) develops and operates
ports and terminals and is one of the largest private sector
port company in India. EPL is India’s second-largest,
private-sector port and terminal company by capacity and
throughput.
EPL is part of the multinational Essar Group, and holds the
Group’s entire ports business. It is listed on the BSE Limited
and the National Stock Exchange of India Limited (NSE).
The Company, which was previously named Essar Shipping
Ports & Logistics Limited (ESPLL), recently went through a
demerger process, following which the shipping, logistics
and oilfield drilling businesses were demerged from ESPLL
and transferred to another company, Essar Shipping Limited,
which is also listed on Indian stock exchanges.
EPL through its subsidiaries develops and operates ports
and terminals for handling liquid, dry bulk, break bulk and
general cargo, with an existing aggregate capacity of 88
MTPA across two facilities located at Vadinar and Hazira in
the State of Gujarat on the west coast of India.
The facilities at Vadinar and Hazira are used primarily by
affiliated customers for the receipt of raw materials such as
crude oil, iron ore / pellets, limestone, dolomite and coal,
and for the dispatch of finished goods such as petroleum
products and steel products.
EPL is in the process of increasing its aggregate ports
capacity to 158 MTPA with expansion projects at Vadinar and
Hazira, a new port at Salaya in Gujarat, and two terminals at
Paradip in the State of Odisha on the east coast of India.
The ports expansion projects have been undertaken, in
part, to accommodate the increase in traffic expected to
arise from plant expansions planned to be carried out by
the Company’s affiliated customers, and in part to support
the increase in business from non-affiliated customers being
targeted by the Company.
2. SIGNIFICANT ACCOUNTING POLICIES:
2.1 Basis of Accounting
These financial statements are prepared under the historical
cost convention, except for the revaluation of fleet, on accrual
basis of accounting, and are in accordance with generally
accepted accounting principles and in compliance with the
applicable Accounting Standards (AS) referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956.
2.2 Use of Estimates
The preparation of financial statements in conformity with the
generally accepted accounting principles requires estimates
and assumptions to be made that affect the reported
balances of assets and liabilities and disclosures relating to
contingent liabilities as at the reporting date and the reported
amounts of income and expenses during the reporting
period. Differences between the actual results and estimates
are recognised in the period in which the results are known /
materialised.
2.3 Fixed Assets
Fixed assets are recorded at cost of acquisition or at revalued
amounts less accumulated depreciation and impairment loss,
if any. Cost of acquisition of fleet includes brokerage, start up
costs and cost of major improvements / upgradations.
Assets acquired under finance leases are capitalised as
fixed assets at lower of fair value at inception of the lease
and the present value of minimum lease payments and a
corresponding liability is recognised. The lease rentals paid
(excluding operating expenses) are bifurcated into principal
and interest components by applying an implicit rate of
return. The interest is charged against income as a period
cost and the principal amount is adjusted against the liability
recognised in respect of assets taken on finance lease.
Foreign exchange differences on conversion / translation /
settlement in respect of long term monetary items used for
acquisition of depreciable fixed assets are added to the cost
of fixed assets.
2.4 Depreciation
Depreciation on fleet, including second hand fleet, is
provided by using the straight-line method based on a
technical evaluation of the economic useful life of respective
vessels or at the rates prescribed under the Schedule XIV to
the Companies Act, 1956, whichever is higher as follows:
Assets Method of depreciation Estimated useful life
Tankers
SLM over balance useful life or 5% whichever is higher
14-25 years
Bulk carriers 3-26 years
Mini bulk carriers 20 years
Tugs SLM over balance useful life or 7% whichever is higher 20 years
Plant & machinery SLM over balance useful life or 4.75% whichever is higher 20 years
Depreciation on addition of assets due to exchange variation is provided over the remaining useful life of the asset.
51
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
Depreciation on water circulation treatment plant and aircraft
is provided by using the straight-line method at the rates
prescribed in Schedule XIV to the Companies Act, 1956.
All other assets are depreciated by using the written down
value method at the rates prescribed in Schedule XIV to the
Companies Act, 1956. Assets costing less than Rs. 5,000/-
are depreciated at 100% in the year of acquisition.
Depreciation on the incremental value of fixed assets upon
revaluation is recouped proportionately from fixed assets
revaluation reserve.
Depreciation on additions / deductions to fixed assets made
during the year is provided on a pro-rata basis from / upto
the date of such additions / deductions, as the case may be.
Profit or loss on disposal of revalued fixed assets is
recognised with reference to their revalued carrying values.
The balance, if any, in the fixed assets revaluation reserve
relating to revalued fixed assets that are sold / disposed is
transferred to general reserve.
2.5 Impairment of Assets
The Company assesses on each balance sheet date whether
there is any indication that an asset may be impaired. If
any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount
of the asset is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The amount so
reduced is treated as an impairment loss and is recognised
in the statement of profit and loss, except in case of revalued
assets, where it is first adjusted against the related balance
in fixed assets revaluation reserve.
If at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is carried at
the recoverable amount subject to a maximum of depreciated
historical cost, except for revalued assets which are subject
to a maximum of depreciated revalued cost.
2.6 Borrowing Costs
Borrowing costs that are directly attributable to the
acquisition, construction / development of qualifying asset
are capitalised as a part of cost of such asset. A qualifying
asset is one that necessary takes substantial period of time
to get ready for the intended use.
Costs in connection with the borrowing of funds to the extent
not directly related to the acquisition of fixed assets are
amortised and charged to the Statement of Profit and Loss,
over the tenure of the loan.
2.7 Investments
a) Long term investments are carried at cost less
provision for other than temporary diminution in the
fair / market value of these investments.
b) Current investments are carried at lower of cost and
fair value.
2.8 Inventory
Inventory is valued at the lower of cost and net realisable
value. Cost is determined on first-in-first-out basis.
2.9 Fleet Operating Earnings
Fleet operating earnings represent the value of charter hire
earnings, demurrage, freight earnings, fleet management fees
and lighterage earnings, and are accounted on accrual basis.
Freight earnings are recognised on a pro-rata basis for voyages
in progress at balance sheet date after loading of the cargo is
completed; revenues and related expenses for voyages where
cargo has not been loaded as on the balance sheet date are
deferred and recognised in the following year. Lighterage is
recognised on the basis of unloading of entire cargo.
2.10 Interest Income
Interest income is recognised on an accrual basis.
2.11 Dividend Income
Dividend income is recognised when the right to receive the
payment is established by the Balance sheet date.
2.12 Insurance Claims
Insurance claims are recorded based on reasonable certainty
of their settlement.
2.13 Fleet Operating Expenses
All expenses relating to the operation of the fleet including
crewing, insurance, stores, bunkers, dry docking, charter
hire and special survey costs are expensed under fleet
operating expenses on accrual basis.
2.14 Operating Leases
Rentals are expensed with reference to the terms of the lease
agreement and other considerations in respect of operating
leases.
2.15 Employee Benefits
a) The Company (employer) and the employees
contribute a specified percentage of eligible
employees’ salary- currently 12%, to the employer
established provident fund “Essar Staff Provident
Fund” set up as an irrevocable trust by the
Company. The Company is generally liable for
annual contributions and any shortfall in the fund
assets based on government specified minimum
rates of return – currently @ 8.6%, and recognises
such provident fund liability, considering fund as
the defined benefit plan, based on an independent
actuarial valuation carried out at every statutory year
end.
b) Provision for gratuity for floating staff is made as
under:
(i) For officers on actuarial valuation.
(ii) For crew on accrual basis as per rules of the
National Maritime Board and is charged to the
Statement of Profit and Loss.
52 Annual Report 2011-12
Notes forming part of financial statements
Contribution in respect of gratuity for on shore
staff is made to Life Insurance Corporation of
India based on demands made. The Company
also accounts for gratuity liability based on an
independent acturial valuation carried out at
every statutory year end.
c) Contribution towards superannuation, funded by
payments to Life Insurance Corporation of India, is a
fixed percentage of the salary of eligible employees
under a defined Contribution plan, and is charged
to the Statement of Profit and Loss.
d) Provision for all compensated absences of eligible
employees is based on an independent actuarial
valuation.
e) The Company has formulated Employee Stock
Option Schemes (ESOSs) in accordance with
Securities and Exchange Board of India (Employee
Stock Option Scheme) Guidelines, 1999. The
Schemes provide for grant of options to employees
of the Group to acquire the equity shares of the
Company that vest in a graded manner and that are
to be exercised within a specified period.
In accordance with the SEBI Guidelines and the
guidance note on “Accounting for Employee Share
based payments” notified under the Companies
(Accounting Standard) Rules, 2006, the excess,
if any, of the market price of the share preceding
the date of grant of the option under ESOSs over
the exercise price of the option is amortised on a
straight-line basis over the vesting period.
2.16 Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded
at standard exchange rates determined monthly which
approximates the actual rate on the date of transaction. The
difference between the standard rate and the actual rate of
settlement is accounted in the Statement of Profit and Loss.
Monetary items denominated in foreign currency are
translated at the rate prevailing at the end of the year. Gains
/ losses on conversion / translation / settlement of foreign
currency transactions are recognised in the Statement of Profit
and Loss, except gains / losses on conversion / translation /
settlement in respect of long term foreign currency monetary
items related to acquisition of a depreciable asset is adjusted
to the carrying amount to those depreciable assets and
depreciated over the balance life of the asset.
Gains / losses on conversion / translation / settlement in
respect of long term foreign currency items relates to other
than an acquisition of depreciable assets are accumulated
in a “Foreign Currency Monetary Item Translation Difference
Account” and amortised over the balance period of such
long term foreign currency item but not beyond March 31,
2020.
2.17 Taxes on Income
a) Income tax on income from qualifying fleet is
provided on the basis of the Tonnage Tax Scheme
whereas income tax on other income and fringe
benefit tax are provided as per other provisions of
the Income Tax Act, 1961.
b) The tax effect of timing differences relating to non-
tonnage tax activities that occur between taxable
income and accounting income and are capable
of reversal in one or more subsequent periods are
recorded as a deferred tax asset or deferred tax
liability. They are measured using the substantively
enacted tax rates and tax regulations as at the
balance sheet date.
Deferred tax assets arising on account of brought
forward losses and unabsorbed depreciation under
tax laws are recognised only if there is a virtual
certainty of realisation, supported by convincing
evidence. Deferred tax assets on account of other
timing differences are recognised to the extent there
is reasonable certainty of realisation.
2.18 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised for present obligations arising out
of past events if it is probable that an outflow of economic
resources, the amount of which can be reliably estimated,
will be required to settle the obligation.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence of
which will be confirmed by the occurrence or non occurrence
of one or more uncertain future events not wholly within
the control of the Company, or a present obligation that is
not recognised because a reliable estimate of the liability
cannot be made, or the likelihood of an outflow of economic
resources is remote.
Contingent assets are neither recognised nor disclosed in
the financial statements.
2.19 Segment Accounting Policies
The company has only one reporting segment in current year.
a) Segment assets and segment liabilities:
Segment assets include all operating assets used
by the segment and consist principally of fixed
assets, inventories, sundry debtors, cash and bank
balances. Segment assets and liabilities do not
include share capital, reserves and surplus, income
tax and unallocable assets and liabilities.
b) Segment revenue and segment expenses:
Segment revenue and expenses have been
identified to its segment on the basis of relationship
to its operating activities. It does not include interest
income on investment, inter corporate deposits,
interest expense and provision for taxes.
53
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
3 SHARE CAPITAL
ParticularsAs at March 31, 2012 As at March 31, 2011
Number (Rs. in lakhs) Number (Rs. in lakhs)
(a) Authorised
Equity shares of Rs.10/- each 1,000,000,000 100,000.00 1,000,000,000 100,000.00
Redeemable cumulative preference shares of
Rs. 100/- each
1,050,000 1,050.00 1,050,000 1,050.00
101,050.00 101,050.00
Issued, subscribed and fully paid up
Equity shares of Rs.10/- each (refer note) 410,455,552 41,045.56 410,455,552 41,045.56
Forfeited equity shares 246,648 13.05 246,648 13.05
41,058.61 41,058.61
Note: Of above 17,18,87,182 (previous year 17,18,87,182) equity shares were allotted as fully paid up equity shares
for consideration other than cash pursuant to scheme of amalgamation during financial year 2008-09.
(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at March 31, 2011
Number (Rs. in lakhs) Number (Rs. in lakhs)
a) Equity shares of Rs. 10/- each
At the beginning of the year 410,455,552 41,045.56 615,683,320 41,045.56
Add: Pending allotment of shares – – – –
Add: Issue of shares – – – –
Less: Extinguishment under the scheme of
arrangement – – (205,227,768) –
Outstanding at the end of the year 410,455,552 41,045.56 410,455,552 41,045.56
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one
vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining
assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
(d) Shares held by holding / ultimate holding company and/or their subsidiaries / associates and details of the
shareholding more than 5% shares in the company
Particulars As at March 31, 2012 As at March 31, 2011
Number % Number %
a) Equity shares of Rs. 10/- each
Essar Shipping & Logistics Limited, Cyprus the
holding company 284,503,711 69.31 340,903,706 83.05
Essar Global Limited, the ultimate holding
company 66 0.00 66 0.00
Essar Projects (India) Limited, subsidiary of the
ultimate holding company 56,396,995 13.74 – –
Essar Steel India Limited, subsidiary of the ultimate
holding company 2,547,223 0.62 2,547,223 0.62
Essar Investments Limited, related party 134,338 0.03 131,338 0.03
Imperial Consultants & Securities Private Limited,
related party 4,826 0.00 4,826 0.00
343,587,159 83.71 343,587,159 83.71
54 Annual Report 2011-12
Notes forming part of financial statements
(i) 7,40,334 shares (as at March 31, 2011 NIL shares) of Rs. 71.10 each towards outstanding employee stock options
granted / available for grant (refer note 28).
(ii) 2,04,75,463 shares (as at March 31, 2011, 2,04,75,463 shares) of Rs. 91.70 each towards 5% Foreign Currency
Convertible Bonds (Refer Note (ii) in Note 5 Long-term borrowings).
4 RESERVES AND SURPLUS (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
a. General Reserves
Opening balance 64,485.74 91,113.99
Add: Transfer from tonnage tax utilised reserve – 15,000.00
Less: Adjustment on account of demerger – (41,628.26)
Closing balance 64,485.74 64,485.74
b. Capital Redemption Reserve
Opening balance – 1,050.00
Less: Adjustment on account of demerger – (1,050.00)
Closing Balance – –
c. Securities Premium Account
Opening balance – 424,284.81
Less: Adjustment on account of demerger – (424,284.81)
Closing Balance – –
d. Debenture redemption reserve
Opening balance – 2,500.00
Less: Adjustment on account of demerger – (2,500.00)
Closing balance – –
e. Revaluation Reserve
Opening balance 105.50 11,280.70
Less: Depreciation on enhanced value of fixed assets (11.16) (1,924.72)
Less: Adjustment on account of demerger – (9,250.48)
Closing balance 94.34 105.50
f. Tonnage Tax Reserve
Opening balance – 20,550.00
Less: Adjustment on account of demerger – (20,550.00)
Closing balance – –
g. Tonnage Tax Utilised Reserve
Opening balance 5,550.00 20,550.00
Less: Transferred to general reserve – (15,000.00)
Closing balance 5,550.00 5,550.00
h. Capital Reserve on Amalgamation
Opening balance – 16,559.00
Less: Transferred to general reserve – (16,559.00)
Closing balance – –
i. Surplus / (deficit) in the statement of profit and loss
Opening balance 162,374.49 110,991.14
Add: Net profit for the current year (7,099.68) 2,087.48
Add: Balance acquired on amalgamation – 49,295.87
Less: Proposed dividends on equity shares (2,052.28) –
Net surplus in the statement of profit and loss 153,222.53 162,374.49
Total reserves and surplus 223,352.61 232,515.73
55
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
5 LONG TERM BORROWINGS (Rs. in lakhs)
Non current portion Current maturities
Paerticulars
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
Secured
from financial institution
Rupee term loan [refer note (i) below] 20,000.00 –
Total Secured Loan [A] 20,000.00 – – –
Unsecured
(a) 5% Foreign currency convertible bonds
[refer note (ii) below]
Series B: US$ 18,571,428 (previous year: US$
18,571,428 ) interest bearing bonds due on
August 24, 2017.
9,500.49 8,295.86 – –
Series A: US$ 21,428,572 (previous year: US$
21,428,572 ) interest bearing bonds due on
August 24, 2015.
10,962.11 9,572.14 – –
5 LONG TERM BORROWINGS (CONTD...) (Rs. in lakhs)
Non current portion Current maturities
Particulars
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
(b) Rupee term loan from banks – 18,750.00 3,750.00
(c) Rupee term loan from financial institutions – 30,000.00 30,000.00 –
Total unsecured loan 20,462.60 66,618.00 30,000.00 3,750.00
Total [A + B] 40,462.60 66,618.00 30,000.00 3,750.00
Less: Amount disclosed under the head
'other current liabilities' (refer note10) – – (30,000.00) (3,750.00)
Long term borrowings 40,462.60 66,618.00 – –
i) Secured rupee term loan from financial institution carries interest @ (base rate - 3.75%) per annum (as at March
31, 2012 - 13.75% p.a.) and is repayable in 12 monthly instalments of Rs. 1,666.67 lakhs each. Repayment starts
from July 31, 2013. The loan is secured against movable fixed assets and all the cash flows including dividend and
receivables of the Company.
ii) Foreign Currency Convertible Bonds carries interest @ 5% per annum payable semi annually. The bonds are convertible
into equity shares of the Company, any time upto the date of maturity at the option of the bond holders at conversion
price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per USD. The bonds if not converted till
the maturity date will be redeemed at par.
iii) Unsecured rupee term loan from financial institutions carry interest rate of 13% per annum, repayable on April 1, 2012.
Essar Shipping & Logistics Limited has given corporate guarantee of Rs. 30,000 lakhs.
iv) Unsecured rupee term loan of previous year from banks carry interest @ (base rate - 3.75%) per annum, repaid on
July 1, 2011.
56 Annual Report 2011-12
Notes forming part of financial statements
6 OTHER LONG TERM LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Others
Advance from customers 12,955.94 2,119.88
Total 12,955.94 2,119.88
7 PROVISIONS (Rs. in lakhs)
Long term provisions Short term provisions
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
(a) Provision for employee benefits
Gratuity 7.80 5.58 – –
Compensated absences 131.77 101.48 5.14 5.28
(b) Others
Provisions for taxation (net of advance tax ) – – 114.61 164.41
Proposed dividend on equity shares – – 2,052.28 –
Total 139.57 107.06 2,172.03 169.69
8 SHORT TERM BORROWINGS (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Unsecured
12.5 % Loans repayable on demand-from related parties (Refer note 32) 3,500.00 3,500.00
Total 3,500.00 3,500.00
9 TRADE PAYABLES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Trade payables (Refer note 32) 1,556.58 –
Total 1,556.58 –
10 OTHER CURRENT LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Payable in respect of capital goods (Refer note 32) 4,568.55 –
Advance from customers 2,426.04 1,300.63
Current maturities of long-term borrowings (Refer note 5) 30,000.00 3,750.00
Interest accrued but not due on borrowings 605.74 204.59
Payable in respect of investment 18,587.80 –
Other liabilities
- Statutory dues 145.64 52.17
- Payable in respect of demerger 795.93 1,545.88
Total 57,129.70 6,853.27
57
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
11F
IXE
D A
SS
ET
S(R
s. in
lakh
s)
Det
ails
GR
OS
S B
LOC
K A
T C
OS
T /
VALU
ATIO
ND
EP
RE
CIA
TIO
N /
IMPA
IRM
EN
TN
ET
BLO
CK
As
at
Ap
ril 1
,
2011
Ad
diti
ons
for
the
year
Sal
e /
ded
uctio
ns
As
at
Mar
ch 3
1,
2012
As
at
Ap
ril 1
,
2011
For
the
year
Sal
e /
ded
uctio
ns
Ad
just
men
ts
on d
emer
ger
As
at
Mar
ch 3
1,
2012
As
at
Mar
ch 3
1,
2012
As
at
Mar
ch 3
1,
2011
Tang
ible
fixe
d a
sset
s
Flee
t -
ow
ned
6,2
22.8
1 –
–
6
,222
.81
1,5
83.1
2 4
40.1
7 –
–
2
,023
.29
4,1
99.5
2 4
,639
.70
Pla
nt a
nd m
achi
nery
–
5
,002
.50
–
5,0
02.5
0 –
3
11.3
2 –
–
3
11.3
2 4
,691
.18
–
Tota
l tan
gib
le fi
xed
ass
ets
6,2
22.8
1 5
,002
.50
–
11,
225.
31
1,5
83.1
2 7
51.4
9 –
–
2
,334
.61
8,8
90.7
0 4
,639
.70
Gra
nd t
otal
6,2
22.8
1 5
,002
.50
–
11,
225.
31
1,5
83.1
2 7
51.4
9 –
–
2
,334
.61
8,8
90.7
0 4
,639
.70
As
at 3
1.03
.201
1 2
58,0
14.0
0 4
1,82
0.00
1
2,88
1.00
6
,222
.81
90,
368.
00
7,9
12.0
0 1
1,99
3.89
8
4,70
3.00
1
,583
.11
4,6
39.7
0
No
tes:
a)
The
Com
pan
y re
valu
ed it
s fle
et o
n M
arch
31,
200
8 on
the
bas
is o
f val
uatio
n d
one
by
app
rove
d v
alue
rs. T
he n
et d
iffer
ence
bet
wee
n b
ook
valu
e an
d re
valu
ed v
alue
as
on M
arch
31,
200
8 am
ount
ing
to R
s.
48.4
0 la
khs
had
bee
n ad
ded
to
boo
k va
lue
of fl
eet
and
cor
resp
ond
ing
cred
it w
as g
iven
to
fixed
ass
ets
reva
luat
ion
rese
rve.
Gro
ss b
lock
as
on M
arch
31,
201
2 in
clud
es R
s. 6
,223
lakh
s b
eing
an
amou
nt
add
ed o
n re
valu
atio
n of
flee
t.
b)
Out
of t
he d
epre
ciat
ion
for
the
year
, a
sum
of R
s. 1
1.16
lakh
s (p
revi
ous
year
Rs.
1,9
24.7
2 la
khs)
rel
atin
g to
dep
reci
atio
n, t
o th
e ex
tent
it is
cha
rged
on
the
incr
ease
d v
alue
has
bee
n re
coup
ed fr
om fi
xed
asse
ts r
eval
uatio
n re
serv
e an
d t
he b
alan
ce o
f Rs.
740
.33
lakh
s (p
revi
ous
year
Rs.
5,9
87.4
1 la
khs)
has
bee
n d
ebite
d t
o th
e st
atem
ent
of p
rofit
and
loss
.
58 Annual Report 2011-12
Notes forming part of financial statements
12 INVESTMENTS (Rs. in lakhs)
Non current Investments
Particulars As at
March 31, 2012
As at
March 31, 2011
Trade investments (valued at cost)
(a) Investments in equity shares (unquoted, fully paid up )
Investment in subsidiaries
45,000 (PY : 37,500) equity shares of Rs.10/- each of Essar Paradip
Terminals Limited 4.50 3.75
NIL (PY : 24,500) equity shares of Rs. 10/- each of Essar Bulk Terminal
Paradip Limited – 2.45
37,00,000 (PY : 9,98,88,850) equity shares of Rs. 10/- each of Essar
Bulk Terminal Limited 373.66 10,087.72
7,86,54,397 (PY : 5,46,54,397) equity shares of Rs. 10/- each of
Vadinar Ports & Terminals Limited 7,527.87 5,127.87
1,04,61,42,000 (PY : 1,04,61,42,000) equity shares of Rs. 10/- each of
Vadinar Oil Terminal Limited 122,921.01 122,921.01
30,04,875 (PY : 30,04,875) equity shares of Rs. 10/- each of Essar Bulk
Terminal (Salaya) Limited 320.04 320.04
131,147.08 138,462.83
(b) Investments in preference shares (unquoted, fully paid up)
Investment in subsidiaries
11,55,00,000 (PY : 66,00,000) 0.01% compulsorily convertible
cumulative participating preference shares of Rs. 10/- each of Essar
Bulk Terminal Paradip Limited
11,550.00 6,600.00
3,29,30,000 (PY : 3,29,30,000) 0.01% optionally convertible
redeemable cumulative Preference Share of Rs.10/- each of Essar Bulk
Terminal Limited
57,546.72 57,546.72
7,90,22,903 (PY : 7,90,22,903) 0.01% fully convertible cumulative
preference shares of Rs. 10/- each of Essar Bulk Terminal Limited 116,136.22 116,136.22
12,99,84,850 (PY : NIL) 0.01% compulsorily convertible cumulative
participating preference shares of Rs. 10/- each of Essar Bulk Terminal
Limited
28,303.72 –
20,50,73,630 (PY : 12,70,00,000) 0.01% compulsorily convertible
cumulative participating preference shares of Rs. 10/- each of Essar
Bulk Terminal ( Salaya) Limited
20,358.26 12,550.84
90,00,000 (PY : NIL) 0.01% compulsorily convertible cumulative
participating preference shares of Rs. 10/- each of Essar Paradip
Terminals Limited
900.00 –
234,794.92 192,833.77
Total 365,942.00 331,296.60
59
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
13 LOANS AND ADVANCES (Rs. in lakhs)
Non current loans and
advancesCurrent loans and advances
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
Advance recoverable in cash or kind or for
value to be received
Unsecured, considered good – – 14.84 –
Advance towards allotment of shares
(Refer note 32) – – 100.00 10,382.36
Advance income-tax and Tax deducted at source
(net of provision for taxation) – – 1,809.23 1,615.46
Prepaid expenses 41.71 585.67 47.00 40.00
Balance with excise authorities 1,176.21 – 172.00 124.54
Insurance claim receivable – – – 291.83
Total 1,217.92 585.67 2,143.07 12,454.19
14 TRADE RECEIVABLES AND OTHER ASSETS (Rs. in lakhs)
Non current Current
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
a. Trade receivables – – 730.97 –
Total – – 730.97 –
b. Others (unsecured and considered good,
unless stated otherwise)
Interest accrued on fixed deposits – – 0.73 99.00
Foreign currency monetary item translation
difference account (FCMITDA) 1,662.72 – 529.11 –
Others (receivable from service rendered &
includes Rs. 148 lakhs towards interest on
income tax refund)
– – 997.56 –
Total 1,662.72 – 1,527.40 99.00
60 Annual Report 2011-12
Notes forming part of financial statements
15 CASH AND BANK BALANCES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
A. Cash and cash equivalents
Balances with banks
On current accounts 52.86 17.08
[A] 52.86 17.08
B. Other bank balances
Margin money deposit 160.00 3,850.00
[B] 160.00 3,850.00
Total cash and bank balances [A+B] 212.86 3,867.08
Note:
i) Current year deposit is placed against bank guarantee facility.
ii) Previous year deposit includes guarantee in favour of DGFT Bangalore and cash margin against loan.
16 REVENUE FROM OPERATIONS (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Sale of services
Fleet operating and chartering earnings 3,622.00 48,686.69
Total 3,622.00 48,686.69
17 OTHER INCOME (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Interest income
- from banks 39.98 252.95
- from others – 5,323.41
Management fee income 1,408.31 –
Profit on sale of fleet / assets – 3,011.46
Dividend from others – 108.84
Net gain on sale of long term investments 2.44 5,259.71
Income on long term investments – 1,740.06
Net gain on sale of investments – 84.96
Net gain on foreign currency translation and transaction (other than
considered as finance cost) – 1,467.46
Interest on income tax refund 183.63 –
Miscellaneous Income – 0.50
Total 1,634.36 17,249.35
61
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
18 EMPLOYEE BENEFITS EXPENSE (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Operating
Salaries, wages and bonus 255.80 2,317.39
Contribution to staff provident and other funds 3.64 77.11
Staff welfare expenses 0.95 374.51
Establishment
Salaries, wages and bonus 621.20 1,803.56
Contribution to staff provident and other funds 24.38 128.01
Staff welfare expenses 21.49 79.77
Total 927.46 4,780.35
19 OPERATING EXPENSES (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Consumption of stores and spares 116.06 703.55
Consumption of fuel, oil and water – 6,921.70
Direct voyage expenses 303.84 19,976.90
Commission, brokerage and agency fees 147.29 251.54
Standing costs – 1,092.31
Dry docking expenses 125.89 1,717.74
Insurance, protection and indemnity club fees 33.40 612.16
Total 726.48 31,275.89
20 ESTABLISHMENT AND OTHER EXPENSES (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Rent – 401.05
Rates and taxes – 0.02
Repairs and maintenance
- buildings – 19.08
- others 2.76 195.55
Legal and professional fees 132.34 696.49
Traveling and conveyance 54.77 219.05
Auditors' remuneration (refer note below) 31.90 48.29
Other establishment expenses 73.88 217.86
Amortisation of foreign currency monetary item translation difference
account (FCMITDA) 402.74 –
Total 698.39 1,797.39
Auditors’ remuneration includes
For audit 10.00 22.00
For other assurance services 20.55 25.94
For reimbursement of expenses 1.35 0.35
Total 31.90 48.29
62 Annual Report 2011-12
Notes forming part of financial statements
21 FINANCE COSTS (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Interest expense
- on bank loans 727.71 7,734.95
- on loan from financial Institution 5,951.92 966.29
- on finance lease obligations - 3,047.22
- on foreign currency convertible bonds 1,106.27 1,129.78
- on debentures - 4,044.40
- on others 788.73 827.12
Other borrowing costs 665.30 657.76
Total 9,239.93 18,407.52
22 COMPOSITE SCHEME OF ARRANGEMENT
The Hon’ble High Court of Gujarat at Ahmedabad vide order dated March 1, 2011 approved the Composite Scheme
of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports & Terminals Limited
(EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).
The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics
Business and the Oilfields Services Business into ESL.
Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields
Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing
in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are
based on financial statements as on September 30, 2010.
Foreign Currency Convertible Bonds aggregating to USD 2,400 lakhs (out of USD 2,800 lakhs) issued by ESPLL stood
transferred to ESL.
In consideration of the demerger, for every three equity shares held by a member as on the record date, the Company
allotted two equity shares of Rs.10/- each as fully paid up to the eligible members of ESPLL whose name were recorded
in the register of members as on May 21, 2011.
23 DEFERRAL / CAPITALISATION OF EXCHANGE DIFFERENCE
Pursuant to notification issued by the Central Government under Companies (Accounting Standards) Amendment
Rules, 2009 dated March 31, 2009; the exchange differences arising on conversion / translation / settlement of long-
term foreign currency monetary items in so far as they relate to the acquisition of a depreciable capital asset, has been
added to or deducted from the cost of the respective asset and has been depreciated over the remaining balance life of
the asset. In case of exchange difference related to any other long-term foreign currency monetary item, the exchange
difference is accumulated in the "foreign currency monetary item translation difference account", (FCMITDA) and is
amortised over the balance period of such long term monetary item but not beyond accounting period ending on or
before March 31, 2020 .The following is the effect of the option exercised:-
63
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Particulars March 31, 2012 March 31, 2011
Net exchange (gain) / loss (deducted) / capitalised to the cost of the
fixed assets / CWIP – 718.00
Net exchange (gain) / loss transferred to foreign currency monetary item
translation difference account (FCMITDA) 2,594.60 –
Amortisation of the above net exchange (gain) / loss for the year
recognised in statement of profit & loss 402.77 –
Balance in FCMITDA shown as trade receivables and other assets
(Refer note 14) 2,191.83 –
24 CONTINGENT LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
i) Guarantees given by banks on behalf of subsidiary 1,600.00 -
ii) Corporate guarantees on behalf of subsidiaries 201,160.00 246,530.00
Commitments to invest in subsidary companies 23,467.15 29,257.15
25 SEGMENT REPORTING
a) Business Segment
The Company has one primary business segment of fleet operations and chartering .
b) Geographical segment
The Company’s fleet operations are managed on a worldwide basis from India. Fleet operating and chartering
earnings based on the geographical location of customers:
(Rs. in lakhs)
Fleet operating and chartering earnings Year ended
March 31, 2012
Year ended
March 31, 2011
India 3,622.00 35,577.30
China - 1,508.20
U.S.A - 2,496.19
U.K. - 2,017.20
Rest of the world - 7,087.80
Total 3,622.00 48,686.69
26 EARNINGS PER SHARE
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
The calculation of the basic and diluted earnings per share is based
on the following data:
Earnings for the purpose of basic earnings per share (net (loss) / profit
for the year) (Rs. in lakhs) (7,099.68) 2,087.48
Equity shares at the beginning of the year (nos.) 410,455,552 615,683,320
Equity shares reduced on account of demerger (nos.) – 205,226,773
Equity shares at the end of the year (nos.) 410,455,552 410,455,552
64 Annual Report 2011-12
Notes forming part of financial statements
26 EARNINGS PER SHARE
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
Weighted average equity shares for the purpose of calculating basic
earnings per share (nos.) 410,455,552 410,455,552
Weighted average equity shares for the purpose of calculating diluted
earnings per share (nos.) 410,455,552 410,455,552
Earnings per share-basic and dilutive (face value of Rs.10/- each) (Rs.) (1.73) 0.51
FCCB and ESOP have not been considered for purpose of calculation of the weighted average number of equity shares for
dilution purposes as they are anti-dilutive.
27 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
A) Derivative contracts outstanding as at the Balance sheet are as follows:
There were no forward / options contracts entered into by the Company during the financial year to hedge its foreign
currency exposures.
B) Unhedged foreign currency exposure
The outstanding foreign currency exposures that have not been hedged by a derivative instrument or otherwise are
given below:
Particulars March 31, 2012 March 31, 2011
(Rs. in lakhs) (In lakhs) (Rs. in lakhs) (In lakhs)
(a) Amount receivable in foreign currency on
account of the following:
i) Export of services 798.00 USD 15.60 – –
ii) Bank balances 5.46 USD 0.12 5.00 USD 0.11
(b) Amount payable in foreign currency on
account of the following:
Foreign Currency Convertible Bond (including
interest accrued but not due) 20,549.57 USD 401.70 17,943.94 USD 401.70
28 EMPLOYEE STOCK OPTION SCHEME
a) The members of the Company at the Annual General Meeting held on September 9, 2011 have approved the issue
of Employee Stock Options under the “Essar Ports Employee Stock Options Scheme - 2011” (hereinafter referred to
as the Scheme). The Scheme shall be operated and administered under the superintendence of the Remuneration
Committee of the Board.
Eligible Employees of the Company, its holding company and subsidiaries are entitled to Options under the Scheme.
Each Option entitles the Eligible Employees to one underlying equity share of the Company.
A trust will be formed for the administration of the Scheme. The Remuneration Committee is authorised to grant
the Options to the Eligible Employees and the Exercise Price of the Options in terms of the Scheme. 1/3rd of the
options granted will vest in the hands of the eligible employees over a period of 3 years commencing from the end
of the 3rd, 4th and 5th year respectively of the date of grant of the Option. The Eligible Employees can exercise the
options vested in them within a period of 7 years from the date of vesting.
(contd...)
65
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
b) Employee stock options details for ESOP as on the balance sheet date are as follows:
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
Options
(numbers)
Weighted
average
exercise price
per option
(in Rs.)
Options
(numbers)
Weighted
average
exercise price
per option
(in Rs.)
Option outstanding at the beginning of the year – – NA NA
Granted during the year 740,334 71.1 NA NA
Vested during the year – – NA NA
Exercised during the year – – NA NA
Lapsed during the year – – NA NA
Options outstanding at the end of the year 740,334 71.1 NA NA
c) The impact on statement of profit and loss and earnings per share if the ‘fair value’ of the options (on the date
of the grant) were considered instead of the ‘intrinsic value’ is as under:(Rs. in lakhs)
ParticularsYear ended
March 31, 2012
Year ended
March 31, 2011
Net Profit / (loss) (as reported) (7,099.68) NA
Add / (Less): Stock based employee compensation (intrinsic value) – NA
Add / (Less): Stock based compensation expenses determined under
fair value method for the grants issued 26.78 NA
Net Profit / (loss) (proforma) (7,126.46) NA
Basic and dilutive earnings per share (as reported) (1.73) NA
Basic and dilutive earnings per share (proforma) (1.74) NA
d) The fair value of the Options granted is estimated on the date of grant using Black Scholes options pricing model
taking into account the terms and conditions upon which the options were granted. The following table lists the
inputs to the model used for calculating fair value: (Rs. in lakhs)
Assumptions Year ended
March 31, 2012
Year ended
March 31, 2011
Risk free interest rate 8.36% NA
Expected life 58 NA
Expected annual volatility of shares 64.81% NA
Expected dividend yield 0.00% NA
66 Annual Report 2011-12
Notes forming part of financial statements
29 DEFERRED TAX LIABILITY
The components of deferred tax liability are as follows:
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
Deferred tax liability
Depreciation of fixed assets (timing difference) 142.45 –
A 142.45 –
Deferred tax assets –
Tax on unabsorbed depreciation 142.45 –
B 142.45 –
Net deferred tax liability (A - B) – –
30 GOING CONCERN
As on March 31, 2012, the Company's current liabilities exceeded its current assets by Rs. 59,744.01 lakhs due to
classification as current of borrowings amounting to Rs. 30,000 lakhs repayable within the next one year, Rs. 4,568.55
lakhs payable for purchase of capital assets and Rs. 18,587.80 lakhs payable for purchase of investment. Subsequent
to year end, the Company has rolled over loans of Rs. 30,000 lakhs for a period exceeding 12 months. The Company
is also in discussion for raising additional funds through equity . As such, the excess current liabilities position will
not affect the operations of the Company and therefore these financial statements have been prepared as a going
concern.
31 EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:
I. Defined contribution plans
The Company has recognised the following amounts in the statement of profit and loss during the year:
(Rs. in lakhs)
Particulars 2011-12 2010-11
a) Employer’s contribution to gratuity fund (offshore crew staff) 0.60 29.00
b) Group accident policy premium (all employees) – 1.00
c) Contribution to pension fund (offshore crew staff) 2.39 11.00
d) Employer’s contribution to superannuation fund – 11.00
e) Employer’s contribution to provident fund (offshore crew staff) 0.87 7.00
The above amounts are included in ‘contribution to staff provident and other funds’ (refer note 18).
II. Defined benefit plans
a. Provident fund
b. Gratuity
c. Compensated absences (CA)
In accordance with AS-15, the relevant disclosures are as under:
67
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(A) Changes in present value of defined benefit obligation: (Rs. in lakhs)
ParticularsProvident fund
(funded)
Gratuity-shore officers
(funded)
Gratuity-off shore
officers
(non funded)
CA
(non funded)
31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Present value of defined benefit
obligation – opening balance 1,408.24 1,668.75 30.37 79.20 – 194.70 52.83 115.77
Current service cost 19.26 119.80 4.65 16.72 – 15.00 4.61 18.08
Current service contribution-
employee 36.26 132.93 – – – – 4.15 –
Interest cost 15.92 86.52 2.43 6.05 – 8.00 – 8.94
Past service cost – – – 66.92 – – – –
Acquisitions 68.52 (419.04) – (156.46) – (225.70) – (133.13)
Benefits paid – (259.60) – (3.22) – – (13.66) (2.38)
Actuarial (gain) / loss on
obligations (1,279.74) 78.88 (1.63) 21.16 – 8.00 (1.91) 45.55
Present value of defined benefit
obligation – closing 268.46 1,408.24 35.82 30.37 – – 46.02 52.83
(B) Changes in the fair value of plan asset: (Rs. in lakhs)
ParticularsProvident fund
(funded)
Gratuity-shore of-
ficers
(funded)
Gratuity-off shore
officers
(non funded)
CA
(non funded)
31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Fair value of plan assets as –
opening 1,408.24 1,668.74 24.79 78.73 – – – –
Expected return on plan
assets 15.92 86.52 2.21 8.35 – – – –
Actual return on plan assets – – – – – – – –
Acquisition adjustment – (166.30) – (103.15) – – – –
Actuarial gains / (losses) (1,279.74) 78.88 0.04 1.74 – – – –
Contributions by the employer /
employees
124.04 – 2.35 42.34 – – – 2.00
Benefits paid – (259.60) – (3.22) – – – (2.00)
Fair value of plan assets – closing 268.46 1,408.24 29.39 24.79 – – – –
(C) Amount recognised in balance sheet: (Rs. in lakhs)
ParticularsProvident fund
(funded)
Gratuity-shore officers
(funded)
Gratuity-off shore
officers
(non funded)
CA
(non funded)
31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Present value of defined benefit
obligation 268.46 1,408.24 35.82 30.37 – – 46.02 52.83
Fair value of plan assets as at
March 31, 2011 268.46 1,408.24 29.39 24.79 – – – –
Liability / (asset) recognised in the
balance sheet (included in current
liabilities and provisions)
(refer note 8)
– – 6.43 5.58 – – 46.02 52.83
68 Annual Report 2011-12
Notes forming part of financial statements
(D) Expenses recognised in the Statement of Profit and Loss: (Rs. in lakhs)
ParticularsProvident fund
(funded)
Gratuity-shore officers
(funded)
Gratuity-off shore
officers
(non funded)
CA
(non funded)
31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Current service cost 19.26 119.80 4.65 16.72 – 15.00 4.61 18.08
Interest cost 15.92 86.52 2.43 6.05 – 8.00 4.15 8.94
Expected return on plan assets (15.92) (86.52) (2.21) (8.35) – – – –
Past service cost – – – 66.92 – – – –
Net actuarial (gain) / loss
recognised in the period – – (1.66) 19.43 – 8.00 (13.66) 45.55
Total expenses recognised in the
statement of profit and loss{(included in contribution to provident
and other funds) (refer note 8)}.
19.26 119.80 3.21 100.77 – 31.00 (4.90) 72.57
(E) Experience history: (Rs. in lakhs)
Particulars Gratuity-shore officers (funded)
31.03.12 31.03.11 31.03.10 31.03.09 31.03.08
Defined benefit obligation at the end of the year (35.82) (30.00) (79.00) (53.00) NA
Plan assets at the end of the period 29.38 25.00 79.00 77.00 NA
Funded status (6.44) 5.00 – 24.00 NA
Experience gain / (loss) adjustments on plan liabilities 0.89 (21.00) (29.00) 70.00 NA
Experience gain / (loss) adjustments on plan assets 0.04 1.00 – – NA
Actuarial gain / (loss) due to change on assumptions 0.74 0.39 7.00 – NA
(Rs. in lakhs)
Particulars Gratuity-offshore officers (non funded)
31.03.12 31.03.11 31.03.10 31.03.09 31.03.08
Defined benefit obligation at the end of the year – – (190.00) (280.00) NA
Plan assets at the end of the period – – – – NA
Funded status – – (190.00) (280.00) NA
Experience gain / (loss) adjustments on plan liabilities – – 90.00 59.00 NA
Experience gain / (loss) adjustments on plan assets – – – – NA
Actuarial gain / (loss) due to change on assumptions – – 34.00 52.00 NA
(Rs. in lakhs)
Particulars CA (non funded)
31.03.12 31.03.11 31.03.10 31.03.09 31.03.08
Defined benefit obligation at the end of the year (46.02) (53.00) (116.00) (54.00) NA
Plan assets at the end of the period – – – – NA
Funded status (46.02) (53.00) (116.00) (54.00) NA
Experience gain / (loss) adjustments on plan liabilities 12.41 (45.00) (91.00) 170.00 NA
Experience gain / (loss) adjustments on plan assets – – – – NA
Actuarial gain / (loss) due to change on assumptions 12.41 – 36.00 (54.00) NA
(F) Category of plan assets:
Percentage of each category of plan
assets to total fair value of plan assets:
Provident fund
(funded)
Gratuity-shore officers
(funded)
Gratuity-off shore
officers (non funded)
CA
(non funded)
Particulars 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Administered by Life Insurance
Corporation of India– – 100% 100% – – – –
Government of India security 25% 25% – – – – – –
Public sector bonds / TDRs 60% 60% – – – – – –
State government securities 15% 15% – – – – – –
69
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(G) Actuarial assumptions
In accordance with Accounting Standard (AS) 15 (revised), actuarial valuation as at the year end was done in respect
of the aforesaid defined benefit plans based on the following assumptions:
i) General assumptions:
ParticularsProvident fund
(funded)
Gratuity-shore officers
(funded)
Gratuity-off shore
officers
(non funded)
CA
(non funded)
31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11 31.03.12 31.03.11
Discount rate (per annum) 8.50% 7.80% 8.50% 8.00% – – 8.50% 8.00%
Rate of return on plan assets (for
funded scheme) 8.60% 8.50% 8.50% 8.50% – N.A NA NA
Expected retirement age of
employees (years) 58 58 58 58 – – 58 58
Separation rate of employees – – 10.00% 10.00% – – 10.00% 10.00%
Rate of increase in compensation – – 9.00% 9.00% – – 9.00% 9.00%
ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) mortality table.
iii) Leave policy:
a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be availed
by the employee against future sick leave; the sick leave balance is not available for encashment.
b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed
by the employee is available for encashment on separation from the Company up to a maximum of 120 days.
iv) As this is the fourth year of implementation of Accounting Standard (AS) –15 (revised), only corresponding previous
three year figure have been furnished.
v) The contribution to be made by the Company for funding its liability for gratuity during the financial year 2012–13 will
be made as per demand raised by the fund administrator Life Insurance Corporation of India.
32 RELATED PARTY TRANSACTIONS:
a) Holding companies :
i) Essar Global Limited, Cayman Island, ultimate holding company
ii) Essar Shipping & Logistics Limited, Cyprus, immediate holding company
b) Subsidiaries:
i) Essar Bulk Terminal Limited
ii) Vadinar Oil Terminal Limited
iii) Vadinar Ports & Terminals Limited
iv) Essar Bulk Terminal (Salaya) Limited
v) Essar Bulk Terminal Paradip Limited (w.e.f March 31, 2011)
vi) Essar Paradip Terminals Limited
vii) Essar Shipping Limited (formerly known as Essar Ports & Terminals Limited) upto October 1, 2010
viii) Essar Logistics Limited (upto September 30, 2010)
(ix) Essar Oilfield Services India Limited (upto September 30, 2010)
(x) Essar Oilfields Services Limited, Mauritius (upto September 30, 2010)
c) Key Management Personnel
(i) Mr. Rajiv Agarwal, CEO & Managing Director
(ii) Mr. Kamla Kant Sinha, CEO (w.e.f. July 4, 2011)
(iii) Mr. Shailesh Sawa, Director Finance (w.e.f. July 24, 2010)
70 Annual Report 2011-12
Notes forming part of financial statements
(iv) Mr. A. R. Ramakrishnan, Whole-time Director (upto May 22, 2011)
(v) Mr. V. Ashok, Whole-time Director (upto May 24, 2010)
(vi) Mr. Sanjay Mehta, Managing Director (upto July 24, 2010)
d) Fellow subsidiaries / other related parties / affiliate where there have been transactions:
(i) Aegis Limited
(ii) Arkay Holdings Limited
(iii) Imperial Consultants & Securities Pvt. Ltd.
(iv) Essar Africa Holdings Limited (formerly known as India Securities Holdings Limited)
(v) Essar Agrotech Limited
(vi) Essar Bulk Terminal Paradip Limited (till March 31, 2011)
(vii) Essar Energy Holdings Limited
(viii) Essar House Limited
(ix) Essar Infrastructure Services Limited
(x) Essar Information Technology Limited
(xi) Essar Investments Limited
(xii) Essar Logistics Limited (from October 1, 2010)
(xiii) Essar Oil Limited
(xiv) Essar Oilfields Services Limited (w.e.f. October 1, 2010)
(xv) Essar Oilfield Services India Limited (w.e.f. October 1, 2010)
(xvi) Essar Shipping Limited (w.e.f. October 1, 2010)
(xvii) Essar Steel India Limited (formerly known as Essar Steel Limited)
(xviii) Essar Steel Hazira Limited
(xix) Futura Travels Limited
The details of transactions with related parties during the year ended March 31, 2012
(Rs. in lakhs)
Nature of transactionsHolding and subsidiary
companies Other related parties
Key management
personnel Total
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
INCOME
Fleet operating income
Essar Bulk Terminal Limited 1,411.20 – – – – – 1,411.20 –
Essar Steel India Limited – – – 27,081.00 – – – 27,081.00
Essar Shipping & Logistics Limited – 168.00 – – – – – 168.00
Essar Logistics Limited – 870.00 – – – – – 870.00
Vadinar Oil Terminal Limited 1,086.30 1,807.00 – – – – 1,086.30 1,807.00
Essar Bulk Terminal (Salaya) Limited 252.00 – – – – – 252.00 –
Essar Oil Limited – – – 569.00 – – – 569.00
Total 2,749.50 2,845.00 – 27,650.00 – – 2,749.50 30,495.00
Other income
Vadinar Oil Terminal Limited 102.00 – – – – – 102.00 –
Vadinar Ports & Terminals Limited 399.00 – – – – – 399.00 –
Essar Bulk Terminal Limited 399.00 – – – – – 399.00 –
Essar Bulk Terminal Paradip Limited 102.00 – – – – – 102.00 –
Essar Bulk Terminal (Salaya) Limited 198.00 – – – – – 198.00 –
Essar Africa Holdings Limited – – 798.04 – – – 798.04 –
Total 1,200.00 – 798.04 – – – 1,998.04 –
71
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Nature of transactionsHolding and subsidiary
companies Other related parties
Key management
personnel Total
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Equipment lease rental income
Essar Steel India Limited – – – 1.00 – – – 1.00
Total – – – 1.00 – – – 1.00
Interest income on debentures
Imperial Consultants & Securities Pvt.
Limited – – – 1,740.00 – – – 1,740.00
Total – – – 1,740.00 – – – 1,740.00
Interest income
Essar Investment Limited – – – 1,278.00 – – – 1,278.00
Essar Shipping & Logistics Limited – 790.00 – – – – – 790.00
Essar Oilfield Services India Limited – 2,551.00 – – – – – 2,551.00
Essar Oilfields Services Limited – 127.00 – – – – – 127.00
Essar Bulk Terminal Paradip Limited – 84.00 – – – – – 84.00
Essar Bulk Terminal (Salaya) Limited – 32.00 – – – – – 32.00
Essar Bulk Terminal Limited – 117.00 – – – – – 117.00
Total – 3,701.00 – 1,278.00 – – – 4,979.00
Remuneration*
Sanjay Mehta – – – – 23.00 – 23.00
A. R. Ramakrishnan – – – – 15.86 139.00 15.86 139.00
Rajiv Agarwal – – – – 215.87 92.00 215.87 92.00
Kamla Kant Sinha – – – – 72.24 – 72.24 –
Shailesh Sawa – – – – 113.61 97.00 113.61 97.00
V. Ashok – – – – – 15.00 – 15.00
Total – – – – 417.58 366.00 417.58 366.00
Direct Voyage Expenses
Essar Bulk Terminal Limited 70.00 606.00 – – – – 70.00 606.00
Total 70.00 606.00 – – – – 70.00 606.00
Hire charges
Essar Shipping & Logistics Limited – 2,224.00 – – – – – 2,224.00
Essar Shipping Limited – – 96.66 – – – 96.66 –
Total – 2,224.00 96.66 – – – 96.66 2,224.00
Manning charges
Essar Infrastructure Services Limited – – – 8.00 – – – 8.00
Essar Bulk Terminal Limited 140.00 – – – – – 140.00 –
Total 140.00 – – 8.00 – – 140.00 8.00
Business center fees
Essar Infrastructure Services Limited – – – 216.00 – – – 216.00
Essar House Limited – – – 66.00 – – – 66.00
Total – – – 282.00 – – – 282.00
Repair and maintenance
Essar Agrotech Limited – – – 5.00 – – – 5.00
Essar Infrastructure Services Limited – – – 22.00 – – – 22.00
Total – – – 27.00 – – – 27.00
Traveling expenses
Futura Travels Limited – – 39.75 141.00 – – 39.75 141.00
Total – – 39.75 141.00 – – 39.75 141.00
Reimbursement of expenses
Essar Oilfields Services Limited – – – 26.00 – – – 26.00
Futura Travels Limited – – – 202.00 – – – 202.00
Essar Logistics Limited – – – 761.00 – – – 761.00
Total – – – 989.00 – – – 989.00
72 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of transactionsHolding and subsidiary
companies Other related parties
Key management
personnel Total
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Aircraft usage charges
reimbursement
Essar Oil Limited – – – 900.00 – – – 900.00
Total – – – 900.00 – – – 900.00
Professional / Advisory fees /
Agency Fees
Essar Shipping Limited – – 31.51 – – – 31.51 –
India Securities Limited – – – 6.00 – – – 6.00
Essar Investment Limited – – – 506.00 – – – 506.00
Essar Information Technology Limited – – – 11.00 – – – 11.00
Essar Logistics Limited – – – 12.00 – – – 12.00
Essar Bulk Terminal Limited 319.00 – – – – – – –
Vadinar Oil Terminal Limited 221.67 – – – – – – –
Vadinar Ports & Terminals Limited 49.07 – – – – – – –
Total 589.75 – 31.51 535.00 – – 31.51 535.00
Interest on loan (ICD)
Vadinar Ports & Terminals Limited 438.70 128.00 – – – – 438.70 128.00
Total 438.70 128.00 – – – – 438.70 128.00
Interest on others
Essar Logistics Limited – – 280.55 – – – 280.55 –
Total – – 280.55 – – – 280.55 –
Interest on lease loan
Essar Shipping & Logistics Limited – 1,782.00 – – – – – 1,782.00
Total – 1,782.00 – – – – – 1,782.00
Sale of investments
Essar Energy Holdings Limited – – – 5,486.00 – – – 5,486.00
Total – – – 5,486.00 – – – 5,486.00
Sale of preference shares
Essar Bulk Terminal Limited 4.88 – – – – – 4.88 –
Total 4.88 – – – – – 4.88 –
Advance for allotment of
preference / equity shares
Essar Oilfield Services India Limited – – – 142,331.00 – – – 142,331.00
Vadinar Ports & Terminals Limited – 2,400.00 – – – – – 2,400.00
Essar Bulk Terminal (Salaya) Limited – 8,125.00 – – – – – 8,125.00
Essar Paradip Terminals Limited 100.00 525.00 – – – – 100.00 525.00
Essar Bulk Terminal Paradip Limited – 9,050.00 – – – – – 9,050.00
Essar Investments Limited – – – 10,076.00 – – – 10,076.00
Total 100.00 20,100.00 – 152,407.00 – – 100.00 172,507.00
Acquisition of assets
Essar Logistics Limited – – 5,002.50 – – – 5,002.50 –
Total – – 5,002.50 – – – 5,002.50 –
Purchase of preference shares
Essar Bulk Terminal Limited – 10,076.00 – – – – – 10,076.00
Essar Bulk Terminal Paradip Limited 4,950.00 6,600.00 – – – – 4,950.00 6,600.00
Essar Bulk Terminal (Salaya) Limited 7,807.36 3,118.00 – – – – 7,807.36 3,118.00
Essar Paradip Terminals Limited 900.75 – – – – – 900.75 –
Essar Steel India Limited 18,587.80 – – – – – 18,587.80 –
Total 32,245.91 19,794.00 – – – – 32,245.91 19,794.00
73
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Nature of transactionsHolding and subsidiary
companies Other related parties
Key management
personnel Total
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Purchase of equity shares
Vadinar Ports & Terminals Limited 2,400.00 – – – – – 2,400.00 –
Essar Bulk Terminal Paradip Limited – 2.00 – – – – – 2.00
Essar Paradip Terminals Limited – 4.00 – – – – – 4.00
Total 2,400.00 6.00 – – – – 2,400.00 6.00
Loans and advances given
Essar Bulk Terminal Limited – 200.00 – – – – – 200.00
Essar Bulk Terminal (Salaya) Limited – 40.00 – – – – – 40.00
Essar Bulk Terminal Paradip Limited – 635.00 – – – – – 635.00
Essar Oilfield Services India Limited – – – 100.00 – – – 100.00
Essar Oilfields Services Limited – – – 1,381.00 – – – 1,381.00
Total – 875.00 – 1,481.00 – – – 2,356.00
Security deposit received
Essar Oil Limited – – – 650.00 – – – 650.00
Vadinar Oil Terminal Limited – 150.00 – – – – – 150.00
Vadinar Ports & Terminals Limited – 150.00 – – – – – 150.00
Essar Bulk Terminal Limited – 150.00 – – – – – 150.00
Total – 450.00 – 650.00 – – – 1,100.00
Loans and advances received
Vadinar Ports & Terminals Limited – 3,500.00 – – – – – 3,500.00
Essar Steel India Limited – – – 10,000.00 – – – 10,000.00
Total – 3,500.00 – 10,000.00 – – – 13,500.00
Advance received from customer
Vadinar Oil Terminal Limited 10,021.71 2,589.36 – – – – 10,021.71 2,589.36
Vadinar Ports & Terminals Limited 326.57 – – – – – 326.57 –
Essar Bulk Terminal (Salaya) Limited 754.05 – – – – – 754.05 –
Essar Bulk Terminal Limited 826.22 – – – – – 826.22 –
Total 11,928.55 2,589.36 – – – – 11,928.55 2,589.36
Guarantees given by others on
behalf of Company
Essar Shipping & Logistics Limited – 30,000.00 – – – – – 30,000.00
Total – 30,000.00 – – – – – 30,000.00
Guarantee on behalf of others
Vadinar Oil Terminal Limited 1,600.00 – – – – – 1,600.00 –
Vadinar Ports & Terminals Limited – 10,500.00 – – – – – 10,500.00
Essar Bulk Terminal Limited 17,500.00 25,000.00 – – – – 17,500.00 25,000.00
Essar Paradip Terminals Limited – 46,700.00 – – – – – 46,700.00
Essar Bulk Terminal Paradip Limited – 44,000.00 – – – – – 44,000.00
Total 19,100.00 126,200.00 – – – – 19,100.00 126,200.00
74 Annual Report 2011-12
Notes forming part of financial statements
OUTSTANDING BALANCES AS AT MARCH 31, 2012
(Rs. in lakhs)
Nature of balances Holding and subsidiary
companies Other related parties
Key management
personnel Total
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
Other current assets
Essar Bulk Terminal Paradip Limited 51.26 – – – – – 51.26 –
Essar Africa Holdings Limited – – 798.04 – – – 798.04 –
Total 51.26 – 798.04 – – – 849.30 –
Advance towards purchase of
preference shares
Vadinar Ports & Terminals Limited – 2,400.00 – – – – – 2,400.00
Essar Bulk Terminal (Salaya) Limited – 5,007.00 – – – – – 5,007.00
Essar Paradip Terminals Limited 100.00 525.00 – – – – 100.00 525.00
Essar Bulk Terminal Paradip Limited – 2,450.00 – – – – – 2,450.00
Total 100.00 10,382.00 – – – – 100.00 10,382.00
Advance received from customers
Vadinar Oil Terminal Limited 13,440.13 3,418.00 – – – – 13,440.13 3,418.00
Vadinar Ports & Terminals Limited 326.57 – – – – – 326.57 –
Essar Bulk Terminal (Salaya) Limited 754.05 – – – – – 754.05 –
Essar Bulk Terminal Limited 826.22 – – – – – 826.22 –
Total 15,346.98 3,418.00 – – – – 15,346.98 3,418.00
Loans and advances received
Vadinar Ports & Terminals Limited 3,500.00 3,500.00 – – – – 3,500.00 3,500.00
Total 3,500.00 3,500.00 – – – – 3,500.00 3,500.00
Investments
Essar Bulk Terminal Limited 202,360.31 – – – – – 202,360.31 –
Vadinar Oil Terminal Limited 122,921.01 – – – – – 122,921.01 –
Vadinar Ports & Terminals Limited 7,527.87 – – – – – 7,527.87 –
Essar Bulk Terminal (Salaya) Limited 20,678.24 – – – – – 20,678.24 –
Essar Bulk Terminal Paradip Limited 11,550.01 – – – – – 11,550.01 –
Essar Paradip Terminals Limited 904.50 – – – – – 904.50 –
Total 365,941.93 – – – – – 365,941.93 –
Trade payables and other current
liabilities
Futura Travels Limited – – 11.96 – – – 11.96 –
Aegis Limited – – 1.62 – – – 1.62 –
Arkay Holdings Limited – – 0.14 – – – 0.14 –
Essar Shipping Limited – – 1,436.07 1,546.00 – – 1,436.07 1,546.00
Essar Logistics Limited – – 4,568.52 – – – 4,568.52 –
Essar Steel India Limited – – 18,604.47 – – – 18,604.47 –
Essar Bulk Terminal Limited 319.00 – – – – – 319.00 –
Vadinar Oil Terminal Limited 221.67 – – – – – 221.67 –
Vadinar Ports & Terminals Limited 49.07 – – – – – 49.07 –
Total 589.75 – 24,622.78 1,546.00 – – 25,212.53 1,546.00
Interest accrued but not due on
loan
Vadinar Ports & Terminals Limited 510.10 115.00 – – – – 510.10 115.00
Total 510.10 115.00 – – – – 510.10 115.00
75
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Nature of balances Holding and subsidiary
companies Other related parties
Key management
personnel Total
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
Guarantees given by others on
behalf of Company
Essar Shipping & Logistics Limited 30,000.00 30,000.00 – – – – 30,000.00 30,000.00
Total 30,000.00 30,000.00 – – – – 30,000.00 30,000.00
Guarantees given on behalf of
others
Vadinar Oil Terminal Limited 1,600.00 – – – – – 1,600.00 –
Vadinar Ports & Terminals Limited 10,500.00 25,500.00 – – – – 10,500.00 25,500.00
Essar Bulk Terminal (Salaya) Limited 60,460.00 67,960.00 – – – – 60,460.00 67,960.00
Essar Bulk Terminal Limited 17,500.00 37,370.00 – – – – 17,500.00 37,370.00
Vadinar Oil Terminal Limited 25,000.00 25,000.00 – – – – 25,000.00 25,000.00
Essar Paradip Terminals Limited 46,700.00 46,700.00 – – – – 46,700.00 46,700.00
Essar Bulk Terminal Paradip Limited 41,000.00 44,000.00 – – – – 41,000.00 44,000.00
Total 202,760.00 246,530.00 – – – – 202,760.00 246,530.00
33 The Company has not received any intimation from the suppliers regarding their status under Micro, Small and Medium
Enterprises Development Act, 2006 (the Act) and hence the disclosures required by the Act have not been made. The
Company is making efforts to get confirmations from the suppliers as regards their status under the Act.
34 In view of exemption from Central Government obtained by the Company under section 211(4) of the Companies Act,
1956 vide order number 46/60/2011-CL-III dated 15.02.2011, information required under sub-clauses (a), (b), (c) and (e)
of paragraph 4-D of part II of schedule VI to the Companies Act, 1956, is not given.
35 The Current year figures are not comparable with the previous year figures as the figures for the previous year includes
the operations of the shipping business up to September 30, 2010 before it was demerged into Essar Shipping Limited
pursuant to the Composite Scheme of Arrangement with effect from the appointed date of October 1, 2010.
36 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification
as per the requirement of the Revised Schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
Rajiv Agarwal Shailesh Sawa
Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai
May 30, 2012
76 Annual Report 2011-12
Notes forming part of financial statements
For and on behalf of the Board of Directors
Rajiv Agarwal Shailesh Sawa
Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai
May 30, 2012
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
PARTICULARS Vadinar Oil
Terminal
Limited
Vadinar
Essar
Bulk Terminal
Limited
Hazira
Essar
Bulk Terminal
(Salaya)
Limited
Mumbai
Essar
Bulk Terminal
Paradip
Limited
Ahmedabad
Essar
Paradip
Terminals
Limited
Mumbai
Vadinar Ports
& Terminals
Limited
Vadinar
1 The relevant financial year of the subsidiary ended on 31.03.12 31.03.12 31.03.12 31.03.12 31.03.12 31.03.12
2 No. of shares in the subsidiary company held by Essar
Ports Limited as on March 31, 2012
1,04,61,42,000 37,00,000 30,04,875 47,500 45,000 27,01,34,457
3 Extent of holding by Essar Ports Limited as at the end
of the financial period
100.00% 74.00% 100.00% 70.30% 90.00% 100.00%
4 The net aggregate amount of the subsidiary
companies profit / (loss) so far as it concerns the
members of the holding company.
a) Not dealt with in the holding company’s accounts:
i) For the financial year ended March 31, 2012 (Rs. 54,45,22,114) Rs. 1,17,52,26,044 (Rs. 36,77,324) (Rs. 13,70,764) (Rs. 2,94,775) Rs. 38,19,95,463
ii) For the previous financial years of the subsidiary
companies since they became the holding
company’s subsidiaries
(Rs. 3,04,61,77,036) Rs. 38,44,24,086 (Rs. 16,67,839) (Rs. 4,33,217) (Rs. 3,97,628) (Rs. 8,10,000)
b) Dealt with in holding company’s accounts:
i) For the financial year ended March 31, 2012 NIL NIL NIL NIL NIL NIL
ii) For the previous financial years of the subsidiary
companies since they became the holding
company’s subsidiaries
NIL NIL NIL NIL NIL NIL
5 Change of interest of Essar Ports Limited in the
subsidiary between the end of the financial year of
subsidiary and that of Essar Ports Limited
NIL NIL NIL NIL NIL NIL
6 Material changes between the end of the financial year
of the subsidiary and the end of the financial year of
Essar Ports Limited in respect of :
a) Fixed Assets NIL NIL NIL NIL NIL NIL
b) Investments NIL NIL NIL NIL NIL NIL
c) Money lent by the subsidiary NIL NIL NIL NIL NIL NIL
d) Money borrowed by the subsidiary company
other than for meeting current liabilities (net)
NIL NIL NIL NIL NIL NIL
Note:
i) Essar ports Limited holds 29.12% in Vadinar Ports & Terminals Limited directly and holds 70.88% through Vadinar Oil Terminal Limited, a 100% subsidiary of Essar Ports Limited.
ii) Essar Ports Limited holds 95% in Essar Bulk Terminal Paradip Limited through Essar Bulk Terminal Limited, a 74% subsidiary of Essar Ports Limited.
77
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
TO THE BOARD OF DIRECTORS OF
ESSAR PORTS LIMITED
(formerly known as Essar Shipping Ports & Logistics
Limited)
1. We have audited the attached Consolidated Balance
Sheet of ESSAR PORTS LIMITED (formerly known
as Essar Shipping Ports & Logistics Limited) (“the
Company”) and its subsidiaries (the Company and its
subsidiaries constitute “the Group”) as at 31st March,
2012, the Consolidated Statement of Profit and Loss
and the Consolidated Cash Flow Statement of the Group
for the year ended on that date, both annexed thereto.
These financial statements are the responsibility of the
Company’s Management and have been prepared on
the basis of the separate financial statements and other
information regarding components. Our responsibility is
to express an opinion on these Consolidated Financial
Statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free of material misstatements.
An audit includes examining, on a test basis, evidence
supporting the amounts and the disclosures in the
financial statements. An audit also includes assessing
the accounting principles used and the significant
estimates made by the Management, as well as
evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis
for our opinion.
3. We report that the Consolidated Financial Statements
have been prepared by the Company in accordance
with the requirements of Accounting Standard 21 –
Consolidated Financial Statements, as notified under
the Companies (Accounting Standards) Rules, 2006.
4. Attention is invited to Note 5 of the financial statements
dealing with the recognition and measurement of the
borrowings covered by the Corporate Debt Restructuring
Scheme (“the CDR”) as per the accounting policy
consistently followed by the Company in the absence
of specific guidance available under the Accounting
Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956 in consideration of the
CDR.
5. Based on our audit and on consideration of the separate
audit reports on the individual financial statements
of the Company and its subsidiaries, and to the best
of our information and according to the explanations
given to us, in our opinion, the Consolidated Financial
Statements give a true and fair view in conformity with
the accounting principles generally accepted in India:
(i) in the case of the Consolidated Balance Sheet, of
the state of affairs of the Group as at 31st March,
2012;
(ii) in the case of the Consolidated the Statement of
Profit and Loss, of the profit of the Group for the
year ended on that date; and
(iii) in the case of the Consolidated Cash Flow
Statement, of the cash flows of the Group for the
year ended on that date.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Reg. No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 30, 2012
Consolidated Auditors’ Report
78 Annual Report 2011-12
(Rs. in lakhs)
Particulars Note No. As at
March 31, 2012
As at
March 31, 2011
I. EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 41,058.61 41,058.61
(b) Reserves and surplus 4 179,175.00 175,203.11
220,233.61 216,261.72
2 Minority interest 6,444.09 8,129.03
3 Non-current liabilities
(a) Long-term borrowings 5 496,402.32 423,912.52
(b) Deferred tax liabilities (net) 6 4,337.29 15.89
(c) Other long term liabilities 7 24,622.76 49,476.94
(d) Long-term provisions 8 492.45 347.97
525,854.82 473,753.32
4 Current liabilities
(a) Short-term borrowings 9 1,761.59 1,673.98
(b) Trade payables 10 7,708.09 3,566.27
(c) Other current liabilities 11 107,906.64 39,168.37
(d) Short-term provisions 8 2,890.46 733.01
120,266.78 45,141.63
Total 872,799.30 743,285.70
II. ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets 12 412,442.60 321,847.47
(ii) Intangible assets 12 10.11 13.52
(iii) Capital work-in-progress 13 213,506.17 186,156.07
(b) Goodwill on consolidation 161,324.95 146,113.25
(c) Non-current investments 14 104.51 104.51
(d) Deferred tax assets (net) 6 12,549.05 –
(e) Loans and advances 15 28,168.50 37,640.90
(f) Other non-current assets 16 3,038.48 104.39
831,144.37 691,980.11
2 Current assets
(a) Current investments 14 0.54 –
(b) Inventories 17 688.58 2,256.60
(c) Trade receivables 16 15,855.56 8,318.06
(d) Cash and bank balance 18 2,749.87 15,692.42
(e) Loans and advances 15 19,316.34 23,971.04
(f) Other current assets 16 3,044.04 1,067.47
41,654.93 51,305.59
Total 872,799.30 743,285.70
See accompanying notes forming part of the financial statements
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
Consolidated Balance Sheet as at March 31, 2012
79
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Particulars Note No. For the year ended
March 31, 2012
For the year ended
March 31, 2011
REVENUE FROM OPERATIONS 19 110,880.69 191,069.74
Other income 20 2,225.70 17,542.52
Total Revenue 113,106.39 208,612.26
EXPENSES:
Employee benefits expense 21 2,198.66 11,344.12
Operating expenses 22 17,562.42 101,992.05
Establishment and other expenses 23 2,024.05 4,073.51
Total 21,785.13 117,409.68
Profit before exceptional items, extraordinary items,
finance cost, tax, depreciation and amortisation 91,321.26 91,202.58
Finance costs 24 42,080.84 47,375.30
Profit before exceptional items, extraordinary items, tax,
depreciation and amortisation 49,240.42 43,827.29
Depreciation and amortisation expense 12 22,024.56 32,083.32
Profit before exceptional item 27,215.86 11,743.97
Exceptional item (refer note no. 5 (C) (iv) ) (23,551.18) –
Profit after exceptional item and before tax 3,664.68 11,743.97
Tax expenses:
Current tax (including MAT) 5,286.56 3,492.23
MAT credit availed (3,331.36) (200.00)
Deferred tax (credit) / charge (8,227.64) 181.58
Tax adjustment for earlier years 52.90 (13.97)
Profit for the year after tax 9,884.22 8,284.13
Less: Share of minority interest (profit) (3,488.75) (1,268.96)
Profit for the year 6,395.47 7,015.17
Earnings per share: ( face value Rs. 10/- each ) 30
(1) Basic 1.56 1.71
(2) Diluted 1.50 1.66
See accompanying notes forming part of the financial statements
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
Consolidated Statement of Profit & Loss for the year ended March 31, 2012
80 Annual Report 2011-12
(Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
A CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax & exceptional Item 27,215.86 11,743.97
Adjustments for :
Depreciation / amortisation / impairment 22,024.56 32,083.32
Finance cost 42,080.84 47,375.30
Interest income (900.81) (7,112.07)
Profit on sale of assets (4.85) (3,011.46)
Profit on sale of long term investment (3.04) (5,259.81)
Profit on sale of current investments (335.02) (161.96)
Dividend on investments – (108.84)
Excess provision of earlier year written back (12.39) (80.61)
Foreign exchange difference loss / (gain) (1.46) (1,495.32)
Operating profit before working capital changes 90,063.69 73,972.52
Adjustments for:
Trade and other receivables (7,751.19) 7,703.20
Inventories (72.10) (552.51)
Trade and other payables (6,249.29) 9,666.59
Cash generated from operations 75,991.11 90,789.80
Income taxes refund / (paid) net (4,626.36) (4,855.98)
Net cash flow from operating activities 71,364.75 85,933.82
B CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets including capital work in progress / advance (73,536.10) (128,287.75)
Proceeds from sale of fixed assets – 4,755.61
Purchase of current investments (54,075.53) (154,556.88)
Proceeds from sale of current investments 54,458.85 164,137.84
Proceeds from sale of non-current investments – 37,044.59
Proceeds from sale of investments in subsidiaries 3.04 –
Fixed deposits matured / (placed) with maturity period of more than
three months, (net)
6,102.54 (9,107.99)
Loans and advances repaid by subsidiaries and other body corporates – 46,886.80
Dividend on investments – 1,848.90
Interest received 916.40 5,930.70
Purchase of preference shares from minority (5.90) (10,060.87)
Net cash used for investing activities (66,136.70) (41,409.05)
Consolidated Cash Flow Statement for the year ended March 31, 2012
81
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
C CASH FLOW FROM FINANCING ACTIVITIES
Interest and finance expenses paid (28,475.07) (35,690.63)
Refund of share application money (1,791.70) –
Proceeds from debentures – 130,964.40
Proceeds from secured loans 84,294.91 166,074.17
Proceeds from commercial papers – 16,000.00
Bills accepted during the year 34,884.76 57,499.10
Bills repaid during the year (59,009.15) (56,626.71)
Proceeds from unsecured loans – 79,081.53
Repayment of secured loans (18,271.81) (162,202.68)
Redemption of preference share – (116,461.00)
Repayment of finance lease obligations – (4,131.99)
Repayment of commercial papers – (16,000.00)
Repayment of unsecured loan (23,700.00) (77,007.26)
Net cash flow from / (used in) financing activities (12,068.06) (18,501.07)
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (6,840.01) 26,023.70
Cash and cash equivalents given on demerger – (33,617.28)
Cash and cash equivalents at the beginning of the year 8,455.42 16,049.00
Cash and cash equivalents at end of the year (refer note 18 (A) ) 1,615.41 8,455.42
Notes :
1 The above cash flow statement excludes assets / liabilities (other than cash balance) on merger from Essar International
Limited and Essar Ports & Terminals Limited and transfer to Essar Shipping Limited on demerger, as it is non cash
transaction (refer note 26).
2 Non Cash Transaction
During the year, the Company has converted inventory of Rs. 1,640.12 lakhs to capital assets.
3 Cash flow statement has been prepared under the indirect method as set out in Accounting Standards 3 - “Cash flow
statement” referred to in Section 211(3C) of the Companies Act, 1956.
See accompanying notes forming part of the financial statements
Consolidated Cash Flow Statement for the year ended March 31, 2012
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai Mumbai
May 30, 2012 May 30, 2012
Notes forming part of financial statements
82 Annual Report 2011-12
1. COMPANY PROFILE
Essar Ports Limited (the Company/EPL) develops and
operates ports and terminals and is one of the largest
private sector port company in India. EPL is India’s
second-largest, private-sector port and terminals
company by capacity and throughput.
EPL is part of the multinational Essar Group and holds
the Group’s entire ports business. It is listed on the
BSE Limited and the National Stock Exchange of India
Limited (NSE). The Company, which was previously
named Essar Shipping Ports & Logistics Limited
(ESPLL), recently went through a demerger process,
following which the shipping, logistics and oilfield drilling
businesses were demerged from ESPLL and transferred
to another company, Essar Shipping Limited, which is
also listed on Indian stock exchanges.
EPL through its subsidiaries develops and operates
ports and terminals for handling liquid, dry bulk, break
bulk and general cargo, with an existing aggregate
capacity of 88 MTPA across two facilities located at
Vadinar and Hazira in the state of Gujarat on the west
coast of India.
The facilities at Vadinar and Hazira are used primarily
by affiliated customers for the receipt of raw materials
such as crude oil, iron ore / pellets, limestone, dolomite
and coal, and for the dispatch of finished goods such
as petroleum products and steel products.
EPL is in the process of increasing its aggregate ports
capacity to 158 MTPA with expansion projects at
Vadinar and Hazira, a new port at Salaya in Gujarat and
two terminals at Paradip in the state of Odhisa on the
east coast of India. The ports expansion projects have
been undertaken, in part, to accommodate the increase
in traffic expected to arise from plant expansions
planned to be carried out by the Company’s affiliated
customers, and in part to support the increase in
business from non-affiliated customers being targeted
by the Company.
2. SIGNIFICANT ACCOUNTING POLICIES:
a) Basis Of Accounting
These financial statements are prepared under
the historical cost convention, except for the
revaluation of fleet, on accrual basis of accounting
and are in accordance with generally accepted
accounting principles and in compliance with the
applicable Accounting Standards (AS) referred
to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
b) Use Of Estimates
The preparation of financial statements in
conformity with the generally accepted accounting
principles requires estimates and assumptions
to be made that affect the reported balances of
assets and liabilities and disclosures relating to
contingent liabilities as at the reporting date and
the reported amounts of income and expenses
during the reporting period. Differences between
the actual results and estimates are recognised
in the period in which the results are known /
materialised.
c) Basis of Consolidation
a) The financial statements of Essar Ports Limited
(formerly known as Essar Shipping Ports
& Logistics Limited) (the Company) and its
subsidiaries (together “Group”) are combined
on a line-by-line basis by adding together the
book values of like items of assets, liabilities,
income and expenses, after eliminating all
material intra-group balances and intra-
group transactions in accordance with AS-
21 “Consolidated Financial Statements”.
b) The difference between the costs of
investment in the subsidiaries, over the net
assets at the time of acquisition of shares in
the subsidiaries is recognised in the financial
statements as goodwill or capital reserve, as
the case may be.
c) The minority’s share in the net profit of the
consolidated subsidiaries for the year is
identified and adjusted against the income of
the Group in order to arrive at the net income
attributable to shareholders of the Company.
d) The minority’s share in the net assets of the
consolidated subsidiaries is identified and
presented in the Consolidated Balance
Sheet separate from liabilities and equity of
the Company’s shareholders.
e) The consolidated financial statements are
prepared using uniform accounting policies
for like transactions and other events in
similar circumstances and where divergent,
appropriate adjustments are made.
d) Fixed Assets
a) Fixed assets are recorded at cost of
acquisition or at revalued amounts less
accumulated depreciation and impairment
loss, if any.
Cost of acquisition of fleet includes
brokerage, start up costs and cost of major
improvements / upgradation.
Cost of acquisition is inclusive of cost of
construction including erection, installation
and commissioning expenses, expenditure
during construction, inseparable know–how
costs, gains or losses earned / incurred
during the trial run, non refundable duties and
taxes, borrowing costs and other incidental
costs, where applicable.
b) Assets acquired on hire purchase, being in
the nature of finance lease, are capitalised as
83
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
fixed assets at lower of fair value at inception
of the lease and the present value of minimum
lease payments and corresponding liability is
recognised. The lease rentals paid (excluding
operating expenses) are bifurcated into
principal and interest components by
applying an implicit rate of return. The interest
is charged against income as a period cost
and the principal amount is adjusted against
the liability recognised in respect of assets
taken on finance lease.
c) Foreign exchange differences on conversion /
translation / settlement in respect of long term
monetary items used for acquisition of
depreciable fixed assets are added to the
cost of fixed assets.
e) Intangible Assets
Intangible assets are recognised only when it is
probable that future economic benefits attributable
to the asset will flow to the Group and the cost of
such assets can be measured reliably. Intangible
assets are stated at cost less accumulated
amortisation and impairment loss, if any. All
costs relating to the acquisition are capitalised.
Intangible assets are amortised over the useful life
of the asset, subject to a rebuttable presumption
that such useful lives will not exceed ten years.
f) Capital Work-In-Progress, Expenditure During
Construction And Capital Advances
Direct expenditure on projects or assets under
construction or development is shown under
capital work in progress.
Expenditure incidental to the construction of the
projects or assets that take substantial period
of time to get ready for their intended use is
accumulated as expenditure during construction
pending allocation to fixed assets and other
accounts, as applicable, on completion of
construction.
g) Depreciation
Depreciation for fleet including second hand fleet and rigs are provided by using the straight-line method based on
a technical evaluation of the economic useful life of respective assets or at the rates prescribed under Schedule XIV
to the Companies Act, 1956, whichever is higher as follows:
Class of assets Method of depreciation Estimated useful life
Fleet
- tankers SLM over balance useful life or 5% whichever is higher 14 - 25 years
- bulk carriers 3 - 26 years
- mini bulk carriers 20 years
- tugs and barges SLM over balance useful life or 7% whichever is higher 20 years
- dredgers 14 years
Rigs
- semi submersible rig SLM over balance useful life or 4.75% whichever is higher 15 years
- land rig 10 years
Plant & Machinery SLM over balance useful life or 4.75% whichever is higher 20 years
a) Depreciation on water circulation treatment
plant, aircraft, forklifts, cranes, impact
hammer, turning plates, clamps, pipelines,
vehicles (other than motor car and two
wheelers), tankages and other heavy plant
and machinery and building is provided on
straight line method at the rate prescribed in
Schedule XIV to the Companies Act, 1956.
b) All other assets are depreciated by using the
written down value method at the rates and
in the manner prescribed in Schedule XIV to
the Companies Act, 1956. Assets costing less
than Rs. 5,000/- are depreciated at 100% in
the year of acquisition.
c) Depreciation on the incremental value of
fixed assets upon revaluation is recouped
proportionately from fixed assets revaluation
reserve.
d) Depreciation on additions / deductions to
fixed assets made during the year is provided
on a pro-rata basis from / up to the date of
such additions / deductions, as the case may
be.
e) Profit or loss on disposal of revalued fixed
assets is recognised with reference to their
revalued carrying values. The balance, if any, in
the fixed assets revaluation reserve relating to
revalued fixed assets that are sold / disposed
is transferred to general reserve.
f) Depreciation on addition of assets due to
exchange variation is provided over the
remaining useful life of the asset.
Notes forming part of financial statements
84 Annual Report 2011-12
g) Assets that are to be handed over to Kandla
Port Trust and Gujarat Maritime Board are
depreciated over a concession period or
rates prescribed under Schedule XIV of the
Companies Act, 1956 whichever is higher.
h) Impairment Of Assets
The Group assesses on each balance sheet date
whether there is any indication that an asset may
be impaired. If any such indication exists, the Group
estimates the recoverable amount of the asset. If
such recoverable amount of the asset is less than
its carrying amount, the carrying amount is reduced
to its recoverable amount. The amount so reduced
is treated as an impairment loss and is recognised
in the Statement of Profit and Loss, except in case
of revalued assets, where it is first adjusted against
the related balance in fixed assets revaluation
reserve.
If at the balance sheet date, there is an indication
that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed
and the asset is carried at the recoverable amount
subject to a maximum of depreciated historical
cost, except for revalued assets which are subject
to a maximum of depreciated revalued cost.
i) Borrowing Costs
Borrowing costs that are directly attributable to
the acquisition, construction / development of
qualifying asset are capitalised as a part of cost of
such asset. A qualifying asset is one that necessarily
takes substantial period of time to get ready for the
intended use.
Costs in connection with the borrowing of funds
to the extent not directly related to the acquisition
of fixed assets are amortised and charged to the
Statement of Profit and Loss, over the tenure of
the loan.
j) Investments
a) Long term investments are carried at cost less
provision for other than temporary diminution,
in the fair / market value of these investments.
b) Current investments are carried at the lower of
cost and fair / market value.
k) Inventory
Inventory is valued at the lower of cost and net
realisable value. Cost is determined on first-in first-
out basis.
l) Revenue Recognition
a) Operating and chartering earnings represent
the value of charter hire earnings, demurrage,
freight earnings, fleet management fees,
road freight income and stevedoring and
lighterage earnings and are accounted on
accrual basis.
Freight earnings, stevedoring and lighterage
are recognised on a pro-rata basis for
voyages in progress at balance sheet date
after loading / unloading of the cargo is
completed; revenues and related expenses for
voyages where cargo has not been loaded /
unloaded as on the balance sheet date are
deferred and recognised in the following year.
b) Revenue on sale of products is recognised
when the seller has transferred to buyer the
property in the goods for a price or when all
significant risks and rewards of ownership
have been transferred to the buyer and the
seller retains no effective control of the goods
transferred to a degree usually associated
with ownership and no significant uncertainty
exists regarding the amount of consideration
that will be derived from the sale of goods.
c) Revenue on transactions of rendering
services is recognised either under the
completed service contract method or under
the proportionate completion method, as
appropriate. Performance is regarded as
achieved when no significant uncertainty
exists regarding the amount of consideration
that will be derived from rendering the
services.
d) Interest income is recognised using the
time proportion method based on the rates
implicit in the transactions.
e) Insurance claims are recorded based on
reasonable certainty of their settlement.
f) Other income is recognised on accrual basis.
m) Dividend Income
Dividend income is recognised when the right to
receive the payment is established by the balance
sheet date.
n) Operating Expenses
All expenses relating to road freight, intercarting
and the operation of fleet, including crewing,
insurance, stores, bunkers, charter hire, special
survey costs and other expenses are expensed
under operating expenses on accrual basis.
Dry-docking expenses are recognised under
operating expenses in the period to which it
relates.
o) Operating Lease
Rentals are expensed with reference to the terms
of the lease agreement and other considerations
in respect of operating leases.
p) Employee Benefits
a) The Company (employer) and the employees
contribute a specified percentage of eligible
employees’ salary - currently 12%, to the
85
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
employer established provident fund “Essar
Staff Provident Fund” set up as an irrevocable
trust by the Company. The Company is
generally liable for annual contributions and
any shortfall in the fund assets based on
government specified minimum rates of
return – currently @ 9.5%, and recognises
such provident fund liability, considering fund
as the defined benefit plan, based on an
independent actuarial valuation carried out at
every statutory year end.
b) Provision for gratuity for floating staff is made
as under:
i) For officers on actuarial valuation.
ii) For crew on accrual basis as per rules
of the National Maritime Board and is
charged to the Statement of Profit and
Loss.
Contribution in respect of gratuity for onshore
staff is made to Life Insurance Corporation
of India based on demands made. The
Company also accounts for gratuity liability
based on an independent actuary valuation
carried out at every statutory year end.
c) Contribution for superannuation, funded
by payments to Life Insurance Corporation
of India, is a fixed percentage of the salary
of eligible employees under a defined
contribution plan is charged to the Statement
of Profit and Loss / expenditure during
construction as applicable.
d) Provision for all accumulated compensated
absences of eligible employees is made
based on independent actuarial valuation.
e) The Company has formulated Employee
Stock Option Scheme (ESOS) in accordance
with Securities and Exchange Board of
India (Employee Stock Option Scheme)
Guidelines, 1999. The Scheme provide for
grant of Options to employees of the Group
to acquire the equity shares of the Company
that vest in a graded manner and that are to
be exercised within a specified period.
In accordance with the SEBI Guidelines
and the guidance note on “Accounting for
Employee Share Based Payments” notified
under the Companies (Accounting Standard)
Rules, 2006, the excess, if any, of the market
price of the share preceding the date of grant
of the option under ESOS over the exercise
price of the option is amortised on a straight-
line basis over the vesting period.
q) Foreign Currency Transactions
Transactions denominated in foreign currencies are
recorded at standard exchange rates determined
monthly which approximates the actual rate on the
date of transaction. The difference between the
standard rate and the actual rate of settlement is
accounted in the Statement of Profit and Loss.
Monetary items denominated in foreign currency
are translated at the rate prevailing at the end of
the year. Gains / losses arising on conversion /
translation / settlement of foreign currency
transactions are recognised in the Statement of
Profit and Loss. Gains / losses on conversion /
translation / settlement of long term foreign
currency monetary items related to acquisition of
a depreciable fixed asset added to or deducted
from the cost of the assets and are depreciated
over the balance life of the asset.
FCMITDA
Gains / losses arising on conversion / translation /
settlement of long term foreign currency items
other than those relating to acquisition of
depreciable assets are accumulated in a “Foreign
Currency Monetary Item Translation Difference
Account” and amortised over the balance period
of such long term foreign currency item but not
beyond accounting period ending on or before
March 31, 2020.
On consolidation, the assets and liabilities of the
Group’s overseas operations are translated at
exchange rates ruling on the balance sheet date.
Income and expense items are translated at the
average exchange rates for the year. The resultant
exchange differences are classified as foreign
currency translation reserve under reserves and
surplus.
The exchange difference arising on account of
investments made during the year in foreign
subsidiaries by holding company compared with
related share capital of subsidiaries is adjusted in
foreign currency translation reserve.
r) Taxation
a) Income tax on income from qualifying fleet
is provided on the basis of the Tonnage
Tax Scheme whereas income tax on non-
tonnage income and fringe benefit tax are
provided as per the other provisions of the
Income Tax Act, 1961. Taxes on income
earned by foreign subsidiaries are provided
based on tax laws of its domicile country.
b) The tax effect of timing differences relating
to non-tonnage tax activities that occur
between taxable income and accounting
income and are capable of reversal in one or
more subsequent periods are recorded as
a deferred tax asset or deferred tax liability.
They are measured using the substantively
enacted tax rates and tax regulations as of
the balance sheet date.
Notes forming part of financial statements
86 Annual Report 2011-12
Deferred tax assets arising on account of
brought forward losses and unabsorbed
depreciation under tax laws are recognised,
only if there is a virtual certainty of realisation,
supported by convincing evidence. Deferred
tax assets on account of other timing
differences are recognised to the extent there
is reasonable certainty of realisation.
s) Provisions, Contingent Liabilities And Contingent
Assets
Provisions are recognised for present obligations
arising out of past events if it is probable that an
outflow of economic resources, the amount of
which can be reliably estimated, will be required to
settle the obligation.
Contingent liabilities are disclosed in respect of
possible obligations that arise from past events,
the existence of which will be confirmed by the
occurrence or non occurrence of one or more
uncertain future events not wholly within the
control of the Group, or a present obligation that
is not recognised because a reliable estimate of
the liability cannot be made, or the likelihood of an
outflow of economic resources is remote.
Contingent assets are not recognised in the
financial statements.
t) Segment Accounting Policies:
a) Segment Assets And Segment Liabilities:
Segment assets include all operating assets
used by the segment and consist principally
of fixed assets, inventories, sundry debtors,
cash and bank balances. Segment assets
and liabilities do not include share capital,
reserves and surplus, income tax (both
current and deferred) and unallocable assets
and liabilities.
b) Segment Revenue And Segment Expenses:
Segment revenue and expenses are directly
attributable to the segment. It does not
include interest income on investments, inter-
corporate deposits, interest expense and
provision for taxes.
3 SHARE CAPITAL
Particulars As at March 31, 2012 As at March 31, 2011
Number (Rs. in lakhs) Number (Rs. in lakhs)
(a) Authorised
Equity shares of Rs. 10/- each 1,000,000,000 100,000.00 1,000,000,000 100,000.00
Redeemable cumulative preference
shares of Rs. 100/- each
1,050,000 1,050.00 1,050,000 1,050.00
101,050.00 101,050.00
Issued, subscribed and fully paid up
Equity shares of Rs. 10/- each 410,455,552 41,045.56 410,455,552 41,045.56
Forfeited equity shares 2,464,648 13.05 2,464,648 13.05
41,058.61 41,058.61
(i)Of above 17,18,87,182 (previous year 17,18,87,182) equity shares were allotted as fully paid up equity
shares for consideration other than cash pursuant to scheme of amalgamation during financial year 2008-09.
(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at March 31, 2011
Number (Rs. in lakhs) Number (Rs. in lakhs)
a) Equity shares of Rs. 10/- each
At the beginning of the year 410,455,552 41,045.56 410,455,552 41,045.56
Add: Pending allotment of shares – – – –
Add: Issue of shares – – – –
Less: extinguishment under the scheme
of arrangement – – – –
Outstanding at the end of the year 410,455,552 41,045.56 410,455,552 41,045.56
87
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing annual general meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of
the shareholding more than 5% shares in the Company
Particulars As at March 31, 2012 As at March 31, 2011
Number % Number %
a) Equity shares of Rs. 10/- each
Essar Shipping & Logistics Limited, Cyprus,
the holding company
284,503,711 69.31% 340,903,706 83.05%
Essar Global Limited, the ultimate holding
company
66 0.00% 66 0.00%
Essar Projects (India) Limited, subsidiary of
the ultimate holding company
56,396,995 13.74% – 0.00%
Essar Steel India Limited, subsidiary of the
ultimate holding company
2,547,223 0.62% 2,547,223 0.62%
Essar Investments Limited, related party 134,338 0.03% 131,338 0.03%
Imperial Consultants & Securities Private
Limited, related party
4,826 0.00% 4,826 0.00%
343,587,159 83.71% 343,587,159 83.71%
(i) 7,40,334 shares (As at March 31, 2011, NIL shares) of Rs. 71.10 each towards outstanding employee stock
Options granted / available for grant.
(ii) 2,04,75,463 shares (As at March 31, 2011, 2,04,75,463 shares) of Rs. 91.70 each towards 5% Foreign
Currency Convertible Bonds.
4 RESERVES AND SURPLUS (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
a. General reserves
Opening balance 27,263.00 90,799.34
Add: Transfer during the year 1,191.11 –
Add: Transfer from tonnage tax utilised reserve – 15,000.00
Add: Transferred from foreign currency translation reserve – (30,101.49)
Less: Adjustment on account of demerger – (48,434.85)
Closing balance 28,454.11 27,263.00
b. Capital redemption reserve
Opening balance – 1,050.00
Less: Adjustment on account of demerger – (1,050.00)
Closing balance – –
Notes forming part of financial statements
88 Annual Report 2011-12
4 RESERVES AND SURPLUS (contd...) (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
c. Securities premium account
Opening balance – 424,285.81
Less: Adjustment on account of demerger – (424,285.81)
Closing balance – –
d. Debenture redemption reserve
Opening balance – 2,500.00
Less: Adjustment on account of demerger – (2,500.00)
Closing balance – –
e. Revaluation reserve
Opening balance 105.50 11,280.50
Less: Depreciation on enhanced value of fixed assets (11.16) (1,925.00)
Less: Adjustment on account of demerger – (9,250.00)
Closing balance 94.34 105.50
f. Tonnage tax reserve
Opening balance – 20,550.00
Less: Adjustment on account of demerger – (20,550.00)
Closing balance – –
g. Tonnage tax utilised reserve
Opening balance 5,550.00 20,550.00
Less: Transferred to general reserve – (15,000.00)
Closing balance 5,550.00 5,550.00
h. Surplus / (deficit) in the statement of profit and loss
Opening balance 142,284.61 136,325.90
Add: Net profit for the current year 6,395.46 7,015.18
Less: Transfer to general reserves (1,191.11) –
Less: Proposed dividends
Equity (2,072.43) –
Preference (0.15) (1,056.47)
Less: Tax on dividend (339.83) –
Net surplus in the statement of profit and loss 145,076.55 142,284.61
Total reserves and surplus 179,175.00 175,203.11
89
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
5 LONG TERM BORROWINGS (Rs. in lakhs)
Non current portion Current maturities
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
A. Secured
(a) Loan from banks
Rupee term loans 62,979.18 69,902.18 6,923.00 6,124.00
Funded interest facilities 121,364.60 95,126.47 1,795.83 1,561.07
Less : Amount not payable if funded interest
is paid on or before March 31, 2012
(41,528.20) (41,772.52) – –
79,836.40 53,353.95 1,795.83 1,561.07
(b) Rupee term loans 213,756.26 145,110.03 7,841.90 4,875.00
(c) From financial institution
Rupee term loans 72,187.85 51,638.97 5,507.70 5,196.65
Funded interest facilities 57,736.06 55,425.93 280.79 515.09
Less : Amount not payable if funded
interest is paid on or before 31.03.2012
(24,607.78) (26,422.53) – –
33,128.28 29,003.40 280.79 515.09
(d) Buyers credit - foreign currency 14,051.75 8,285.99 – –
Total secured loan [A] 475,939.72 357,294.52 22,349.22 18,271.81
B. Unsecured
(a) 5% Foreign currency convertible
bonds
Series - B; US$ 18,571,428
interest bearing bonds due on
August 24, 2017
9,500.49 8,295.86 – –
Series -A ; US$ 21,428,572
interest bearing bonds due on
August 24, 2015
[The above bonds are convertible into
fully-paid ordinary shares of
Rs. 10/- each of the Company at an
initial conversion rate of Rs. 91.70 per
equity share at a fixed exchange rate of
Rs. 46.94]
10,962.11 9,572.14 – –
(b) Rupee term loan from banks – 18,750.00 – 3,750.00
(c) Rupee term loan from financial
institutions
– 30,000.00 30,000.00 –
Total unsecured loan [B] 20,462.60 66,618.00 30,000.00 3,750.00
Total [A + B] 496,402.32 423,912.52 52,349.22 22,021.81
Less: Amount disclosed under the head
‘other current liabilities’ (refer note 11)
– – (52,349.22) (22,021.81)
Long term borrowings 496,402.32 423,912.52 – –
Notes forming part of financial statements
90 Annual Report 2011-12
C. Notes :
Secured Master Restructuring Agreement (MRA) Rupee
Term loan
(i) Term loans and funded interest facilities from
banks and financial institutions (other than (b)
below) are secured / to be secured by first ranking
security interests on all movable and immovable
assets, present and future, pledge of shares of
the Company held by the promoters and persons
associated with the promoters / Company,
security interest on rights, titles and interests
under each of the project documents, trust and
retention accounts / sub-accounts, insurance
policies related to the terminal project, immovable
properties of Essar Oil Ltd. (EOL) pertaining to
terminal project, guarantee by the promoters and
guarantee of holding company for Rs. 25,000
lakhs (Previous year Rs. 25,000 lakhs) and pledge
of shares of the Company held by the holding
company.
(ii) The facilities provided by a financial institution upto
Rs. 20,000 lakhs (Previous year Rs. 20,000 lakhs)
and interest and other charges thereon are secured
by a Guarantee of EOL for Rs. 20,000 lakhs. To
secure obligation of EOL pursuant to the said
guarantee, security is created by first mortgage
and charge on immovable and movable properties
pertaining to the EOL refinery project, pledge over
shares of EOL and an assignment of the project
contracts relating to EOL refinery project, the trust
and retention accounts pertaining thereto.
(iii) Secured Master Restructuring Agreement (MRA)
Rupee Term loan (including funded interest) from
bank carrying average interest cost of 10% to
11.50% per annum with quarterly installments
payment upto June 2027.
(iv) Recognition of Facility Stoppage and Facility E
The Master Restructuring Agreement (MRA) dated
December 17, 2004 entered pursuant to Corporate
Debt Restructuring Scheme, gives an option,
subject to consent of its lenders, to the Company
to prepay funded interest loans (FS loan) of Rs.
86,908.16 lakhs (previous year Rs. 86,908.16
lakhs) at any point of time during their term at
a reduced amount computed in accordance with
mechanism provided in the MRA or in full, by one
bullet payment in March, 2026. Interest on FS
loan was not payable if FS loan was prepaid by
April 24, 2012 and therefore considering the plans
to prepay FS loan, interest liability on FS loan (Facility
E) was earlier considered as contingent liability and
now recognised as loan as the same is funded.
In order to reflect the substance of the above, in
the terms of presentation in balance sheet, an
amount of Rs. 66,135.98 lakhs (previous year
Rs. 68,195.06 lakhs) being the amount not payable
as at balance sheet date has been presented as
deduction from funded interest facilities under
secured loans / borrowings to reflect the present
obligation on the balance sheet date. The
changes in the present obligation of the said loans
subsequent to capitalisation of the Terminal Project
till each reporting date is treated as a finance
cost item in the statement of profit and loss.
Facility E of Rs. 24,179.58 lakhs is presented in
the balance sheet under Funded Interest Facilities
from banks and financial institutions under long
term borrowings, with corresponding recognition
of Rs. 807.34 lakhs, being interest attributable to
construction period, being added to fixed assets
and balance as Exceptional Item in the Statement
of Profit and Loss.
Secured Other Rupee Term loan
(i) Secured rupee term loan from bank carrying
interest rates ranging from 12% to 17% (base
rate +/- spread) per annum. Repayment of term
loan ranges between quarterly installments from
quarter ending June 2012 to quarter ending
March 2023.
(ii) Term loans are secured by first mortgage and
charge of all present and future movable and
immovable assets / properties of the Company.
The loan is further secured by Corporate
Guarantee of Essar Ports Limited (formerly known
as Essar Shipping Ports & Logistics Limited) of
Rs. 56,000 lakhs.
(iii) Foreign Currency Convertible Bonds carries
interest @ 5% per annum payable semi annually.
The bonds are convertible into equity shares of
the company, any time upto the date of maturity
at the option of the bond holders at conversion
price of Rs. 91.70 per share at a predetermined
exchange rate of Rs. 46.94 per USD. The bonds if
not converted till the maturity date will be redeemed
at par.
(iv) Unsecured rupee term loan from financial
institutions carry interest rate of 13% per annum,
repayable on April 1, 2012. Essar Shipping &
Logistics Limited has given corporate guarantee
of Rs. 30,000 lakhs.
(v) Unsecured rupee term loan of previous year from
banks carry interest @ (base rate) - 3.75% per
annum, repaid on July 1, 2011.
(vi) Foreign currency buyers credit carrying interest
rate ranging from 2.62% to 3.62% (LIBOR plus
spread) per annum. Buyers credit facility are part
of consortium agreement. The Company has
intention to convert buyers credit into term loan
on the maturity. Repayment terms will be as per
those disclosed under point (3) above. The loan is
further secured by Corporate Guarantee of Essar
Ports Limited (Formerly known as Essar Shipping
Ports & Logistics Limited) of Rs. 67,960 lakhs.
91
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
6 DEFERRED TAX LIABILITY (NET)
The components of net deferred tax liability / assets are as follows:- (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Deferred tax liability
Depreciation on fixed assets 25,581.11 16,151.88
(A) 25,581.11 16,151.88
Deferred tax assets
Unabsorbed depreciation 33,792.87 16,135.99
(B) 33,792.87 16,135.99
Deferred tax liability / (assets) net (A-B) (8,211.76) 15.89
a. The Company has recognized net deferred tax asset of Rs. 12,549.05 lakhs on unabsorbed depreciation on the
basis of estimate of contracted revenue for the period for which agreement has been entered into by it.
b. The Company has disclosed Rs. 12,549.05 lakhs (previous year Rs. Nil) as deferred tax assets and Rs. 4,337.29
lakhs (previous year Rs. 15.89 lakhs) as deferred tax liability.
7 OTHER LONG TERM LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Advances from customers 0.05 –
Payable in respect of capital goods 12.50 12.50
Acceptances (against LC issued by lenders and convertible into
secured term loans on due dates)
24,610.21 49,464.44
Total 24,622.76 49,476.94
8 PROVISIONS (Rs. in lakhs)
Particulars Long term provisions Short term provisions
As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
(a) Provision for employee benefits
Gratuity 55.85 39.97 1.25 0.82
Leave encashment 434.77 304.87 18.50 28.05
(b) Others
Provisions for taxation (net of advance tax) 1.83 3.13 458.30 704.14
Proposed dividend on equity shares – – 2,072.43 –
Proposed dividend on preference
shares
– – 0.15 –
Tax on proposed dividend – – 339.83 –
Total 492.45 347.97 2,890.46 733.01
Notes forming part of financial statements
92 Annual Report 2011-12
9 SHORT TERM BORROWINGS (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Secured
Working capital loan
From banks 1,503.55 1,673.98
Rupee short term loan
(secured by first pari passu charge on all the present and
future movable / immovable assets / properties, insurance
contracts, accounts, receivables and all other assets of the
Company including but not limited to goodwill, trademarks
and patents)
(A) 1,503.55 1,673.98
Unsecured
Buyers’ credit 258.04 –
(B) 258.04 –
Total (A + B ) 1,761.59 1,673.98
10 TRADE PAYABLES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Trade payables-
Due to micro and small enterprises – –
Others 7,708.09 3,566.27
Total 7,708.09 3,566.27
11 OTHER CURRENT LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Payable in respect of capital goods 33,111.51 9,451.21
Acceptance in respect of capital goods 1,110.00 45.71
Advance from customers 51.45 1,116.65
Current maturities of long-term borrowings (Refer note 5) 52,349.22 22,021.81
Interest accrued but not due on borrowings 414.61 346.61
Interest accrued and due on borrowings 101.15 300.00
Other liabilities
Statutory and other related dues 812.00 4,340.50
Payable in respect of purchase of preference shares 18,587.80 –
Others 1,368.90 1,545.88
Total 107,906.64 39,168.37
93
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
12.
FIX
ED
AS
SE
TS
(R
s.
in la
khs)
GR
OS
S B
LOC
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Ad
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ing
the
year
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adju
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Sal
e /
ded
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ts
due
to
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erge
r
As
at
Mar
ch 3
1,
2012
As
at
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,
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For
the
year
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stm
ents
due
to
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at
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As
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As
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862.
36
Pre
viou
s ye
ar82
0,87
8.51
11
4,22
4.45
–
1
3,97
5.27
5
41,8
72.0
7 37
9,25
5.62
15
7,67
5.51
3
4,75
5.51
1
2,32
2.43
1
22,7
13.1
9 5
7,39
5.39
66
3,20
3.00
No
tes:
-
i)
P
ursu
ant
to t
he n
otifi
catio
n of
Min
istr
y of
Com
pan
y A
ffairs
rel
atin
g to
the
effe
cts
of c
hang
es in
fore
ign
exch
ange
rat
es, t
he r
esul
tant
gai
n of
NIL
(pre
viou
s ye
ar lo
ss o
f Rs.
718
lakh
s) a
risin
g on
con
vers
ion
/ tr
ansl
atio
n /
sett
lem
ent
of lo
ng t
erm
fore
ign
curr
ency
item
s ha
s b
een
adju
sted
in t
he c
urre
nt y
ear
ded
uctio
ns t
o fle
et a
nd a
n ai
rcra
ft.
ii)
Th
e co
mp
any
reva
lued
its
fleet
on
Mar
ch 3
1, 2
008
on t
he b
asis
of v
alua
tion
don
e b
y ap
pro
ved
val
uers
. The
net
diff
eren
ce b
etw
een
boo
k va
lue
and
rev
alue
d v
alue
as
on 3
1st
Mar
ch, 2
008
amou
ntin
g to
Rs.
48.
40 la
khs
had
bee
n ad
ded
to
boo
k
valu
e of
flee
t an
d c
orre
spon
din
g cr
edit
was
giv
en t
o Fi
xed
Ass
ets
Rev
alua
tion
Res
erve
. Gro
ss B
lock
as
on M
arch
31,
201
2 in
clud
es R
s. 6
,223
lakh
s b
eing
an
amou
nt a
dd
ed o
n re
valu
atio
n of
flee
t.
iii)
A
dd
ition
s to
Pla
nt a
nd M
achi
nery
incl
ude
Rs.
807
.34
lakh
s d
ue t
o ca
pita
lizat
ion
of in
tere
st o
n Fa
cilit
y S
top
pag
e fro
m A
pril
24,
200
7 to
Jun
e 30
, 20
07. [
refe
r no
te: 5
(C)(i
v)]
iv)
Det
ails
of d
epre
ciat
ion
are
as fo
llow
s:
Par
ticul
ars
( Rs.
in la
khs)
Dep
reci
atio
n fo
r th
e ye
ar a
s ab
ove
23,
124.
02
Less
: D
epre
ciat
ion
on ii
i ab
ove
cons
ider
ed a
s ex
cep
tiona
l ite
m (1
78.9
3)
Less
: D
epre
ciat
ion
cap
italis
ed d
urin
g th
e ye
ar (9
09.3
6)
Less
: D
epre
ciat
ion
reco
uped
from
fixe
d a
sset
s re
valu
atio
n re
serv
e (1
1.16
)
Dep
reci
atio
n ch
arg
ed t
o s
tate
men
t o
f p
rofit
and
loss
2
2,02
4.56
Notes forming part of financial statements
94 Annual Report 2011-12
13 CAPITAL WORK-IN-PROGRESS (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Capital work-in-progress 163,089.81 157,190.08
Expenditure during the construction 50,416.36 28,965.98
Total 213,506.17 186,156.06
EXPENDITURE DURING CONSTRUCTION (Rs. in lakhs)
Particulars As at
March 31,
2011
Additions
during the year
Capitalised
During the Year
As at
March 31,
2012
Expenditure during construction
Stores and spares 60.04 100.67 (160.71) –
Certification and survey charges 30.19 200.80 – 230.99
Salary and manpower expenses 1,670.49 2,204.99 (136.87) 3,738.62
Legal and professional charges 2,059.24 1,945.34 (1,313.97) 2,690.61
Insurance 180.06 136.52 (83.13) 233.44
Interest and finance cost 18,439.77 21,443.95 (7,894.53) 31,989.20
Agency fee 57.26 56.58 – 113.84
Depreciation 683.82 909.36 – 1,593.18
Taxes and dues 6.75 6.96 – 13.70
Traveling expenses 24.36 119.36 (1.23) 142.50
Hiring charges 287.93 347.84 (46.20) 589.57
Custom duty and clearing expense 612.19 – (612.19) –
Stamp duty and registration charges 2,525.31 – (2,525.31) –
Lease rent expenses 1,309.82 3,080.17 (412.49) 3,977.50
Manning management / commitment fees 8.52 – (8.52) –
Power and electricity expenses – 218.95 – 218.95
Loss / (gain) on foreign currency transaction and
translation
11.62 1,751.96 – 1,763.58
General expenses 2,112.20 616.09 – 2,728.29
Total (A) 30,079.57 33,139.54 (13,195.15) 50,023.97
Less :
Interest accrued on term deposits 1,246.53 (131.61) – 1,114.91
Gain on redemption of mutual funds (215.63) (49.74) 178.73 (86.64)
Interest on intercompany deposits given (24.52) – – (24.52)
Site formation / scrap income (52.27) (147.79) – (200.06)
Vessel and equipment hire income (22.22) – – (22.22)
Income from lease rent (1,212.12) – 1,212.12 –
Income from trial operation (759.48) – 759.48 –
Miscellaneous Income (73.88) (315.20) – (389.08)
Total (B) (1,113.59) (644.34) 2,150.33 392.39
Total (A+B) 28,965.98 32,495.20 (11,044.82) 50,416.36
95
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
14 INVESTMENTS (Rs. in lakhs)
Non current Investments Current Investments
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
Unquoted
Non trade investments (valued at cost )
(a) Investments in equity shares
(unquoted, fully paid up )
386,000 (previous year 386,000)
equity shares of Rs. 10 /- each of
Bhander Power Limited
104.51 104.51 – –
(b) Current Investments
42.643 Units (previous year NIL) of Taurus
Mutual Fund
– – 0.54 –
Total 104.51 104.51 0.54 –
15 LOANS AND ADVANCES (UNSECURED,
CONSIDERED GOOD) (Rs. in lakhs)
Non current Loans and advances Current Loans and advances
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
a. Capital advances 14,017.99 25,831.78 – –
b. Security deposits 566.66 151.51 – 20.73
c. Loans and advances to related
parties
4,571.11 6,955.49 1,854.20 2,129.58
d. Advance recoverable in cash or kind
or for value to be received
30.76 – 483.54 1,657.44
e. Other loans and advances
(unsecured and considered good,
unless stated otherwise)
Advance income-tax and tax
deducted at source (net of provision
for taxation)
253.00 167.53 4,195.11 5,240.82
MAT credit available 3,543.42 212.07 – –
Prepaid expenses 3,515.29 3,928.97 2,175.45 1,868.62
Cenvat receivable 1,670.27 393.55 10,148.14 13,047.59
Advance to vendor – – 426.99 6.26
Other receivable – – 32.91 –
8,981.98 4,702.12 16,978.60 20,163.29
Total 28,168.50 37,640.90 19,316.34 23,971.04
Notes forming part of financial statements
96 Annual Report 2011-12
16 TRADE RECEIVABLES AND
OTHER ASSETS (Rs. in lakhs)
Non current Current
Particulars As at
March 31,
2012
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2011
a. Trade receivables outstanding
for a period exceeding six
months from the date they are
due for payment
Unsecured, considered good A – – 12.75 –
b. Other trade receivables
(unsecured and considered
good)
B – – 15,842.81 8,318.06
Total Trade receivable (A + B) – – 15,855.56 8,318.06
c. Others (unsecured and
considered good, unless stated
otherwise)
Non current bank balances (refer
note 18)
2,820.41 – – –
Deposits in escrow account 99.26 – – –
Income receivables – – 198.59 275.19
Unamortised share issue
expenses
118.81 104.39 64.30 18.00
Insurance claim receivable – – – 291.83
Interest accrued on fixed
deposits
– – 86.58 111.22
Interest accrued on inter
corporate deposits
– – 167.61 –
Interest accrued but not due
on loans & advances given to
related parties
– – – 308.00
Others – – 2,526.96 63.23
Total other current assets 3,038.48 104.39 3,044.04 1,067.47
17 INVENTORIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Stores and spares 644.42 2,251.04
Fuel, oil and lubes 44.16 5.56
Total 688.58 2,256.60
Note: Inventories are valued at lower of cost and net realisable value.
97
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
18 CASH AND BANK BALANCES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
A. Cash and cash equivalents
Balances with banks
- On current accounts 1,615.41 5,919.08
- Deposits with original maturity of less than three months – 2,536.26
Cash on hand – 0.08
Total cash and cash equivalent [A] 1,615.41 8,455.42
B. Other bank balances
Deposits with original maturity of more than 3 months but
less than 12 months
250.00 –
Deposits with original maturity of more than 12 months 416.33 –
Margin money deposit 468.13 7,237.00
Total other bank balance [B] 1,134.46 7,237.00
Total cash and bank balances ( A + B ) 2,749.87 15,692.42
19 REVENUE FROM OPERATIONS (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Sale of services
Port & terminal services 110,008.19 69,890.98
Fleet operating and chartering earnings 872.50 63,667.98
Surface logistics services – 40,658.00
Oilfield service Income – 16,852.78
Total 110,880.69 191,069.74
20 OTHER INCOME (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Interest income
- from banks 88.43 625.85
- from others 2.50 6,486.22
- Income tax refund 364.99 174.18
- from Inter corporate deposit 809.88 –
Management fee income 208.31 –
Dividend from others – 108.84
Net gain on sale of investments 335.02 161.96
Net gain on sale of long term investments 3.04 5,259.81
Net gain on foreign currency translation and transaction (other than
considered as finance cost)
5.97 1,495.32
Profit on sale of assets 4.85 3,011.46
Technical and facility sharing service income – 15.75
Other non operating income (net of expenses directly attributable to
such income)
402.71 203.13
Total 2,225.70 17,542.52
Notes forming part of financial statements
98 Annual Report 2011-12
21 EMPLOYEE BENEFITS EXPENSE (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Floating staff / operating related
Salaries, wages and bonus 255.80 4,424.92
Contribution to staff provident and other funds 3.64 416.96
Staff welfare expenses 0.95 239.76
Office staff / administrative related
Salaries, wages and bonus 1,766.57 5,788.17
Contribution to staff provident and other funds 120.49 77.11
Staff welfare expenses 51.21 397.20
Total 2,198.66 11,344.12
22 OPERATING EXPENSES (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Consumption of stores and spares 651.97 4,607.37
Consumption of fuel, oil and water – 8,928.54
Direct voyage expenses / surface logistics services 233.84 70,667.18
Commission, brokerage and agency fees 7.29 923.76
Operation and maintenance service expense 1,840.73 –
Standing costs – 2,790.69
Dry docking expenses 125.89 1,717.74
Rent and hire charges 3,789.39 1,286.74
Manning management 2,253.04 2,576.10
Power and fuel 346.54 137.10
Security maintenance charges 63.35 167.89
Lighterage cost 1,157.14 1,800.02
Port charges 1,165.06 –
Wharfage charges 4,412.41 3,749.30
Repairs plant and machinery 644.65 639.05
Insurance, protection and indemnity club fees 871.12 2,000.57
Total 17,562.42 101,992.05
99
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
23 ESTABLISHMENT AND OTHER EXPENSES (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Rent 190.42 583.19
Rates and taxes 52.20 56.49
Repairs and maintenance
-buildings – 45.49
-others 573.00 433.31
Legal and professional fees 551.96 1,694.82
Traveling and conveyance 279.31 411.97
Auditors' remuneration (refer note below) 111.43 99.76
Communication expenses 17.32 5.91
Vehicle hire and maintenance charges 11.46 107.02
Other establishment expenses 232.44 635.55
Amortisation of foreign currency monetary Item translation difference
account (FCMITDA)
4.51 –
Total 2,024.05 4,073.51
(Rs. in lakhs)
For the year ended
March 31, 2012
For the year ended
March 31, 2011
AUDITORS’ REMUNERATION INCLUDES
For audit fees 32.00 44.50
For other assurance services 76.13 53.73
For reimbursement of expenses 3.30 1.53
Total 111.43 99.76
24 FINANCE COSTS (Rs. in lakhs)
Particulars For the year ended
March 31, 2012
For the year ended
March 31, 2011
Interest expense
- on bank loans 25,926.74 21,773.63
- on loan from financial Institution 14,636.87 16,253.97
- on finance lease obligations – 3,047.22
- on foreign currency convertible bonds 62.32 881.90
- on debentures – 4,044.40
- on others 436.58 –
- Other borrowing costs 1,018.33 1,374.18
Total 42,080.84 47,375.30
Notes forming part of financial statements
100 Annual Report 2011-12
25 SUBSIDIARIES
The reporting date of all the subsidiaries is March 31, 2012. The list of the subsidiaries of the Company which are
included in the consolidation and the Group’s holding therein are as under:
Name of companies Country of
incorporation
Immediate
holding
% of Ownership Interest
As at
March 31,
2012
As at
March 31,
2011
Vadinar Oil Terminal Limited (“VOTL”) India EPL 100% 100%
Vadinar Ports & Terminals Limited (“VPTL”) India VOTL 100% 100%
Essar Bulk Terminal Limited (“EBTL”) India EPL 74% 74%
Essar Bulk Terminal Paradip Limited (“EBTPL”) –
from 31.03.2011
India EPL 71% 59%
Essar Paradip Terminals Limited (“EPaTL”) India EPL 90% 75%
Essar Dredging Limited (“EDL”) # India EBTL NA 74%
Essar Bulk Terminal (Salaya) Limited (“EBTSL”) India EPL 100% 100%
Essar Logistics Limited (“ELL”)* India EPL NA NA
Essar Shipping Limited (“ESL”) * India EPL NA NA
Essar Oilfields Services Limited (“EOSL”)* Mauritius EPL NA NA
Essar Oilfield Services India Limited (“EOSIL”) * India EOSL NA NA
Energy Transportation International Limited (“ETIL”) * Bermuda EPL NA NA
Energy II Limited (“EII”)* Bermuda EPL NA NA
Essar Ports & Terminals Limited (“EPTL”) @ Mauritius EPL NA NA
Essar International Limited (“EIL”)@ Mauritius EPL NA NA
* : ceased to be subsidiaries on demerger from October 1, 2010
@ : ceased to be subsidiaries on merger from September 30, 2010
# : ceased to be subsidiary on July 1, 2011
26 COMPOSITE SCHEME OF ARRANGEMENT
The Hon’ble High Court of Gujarat at Ahmedabad vide order dated 1 March 2011 approved the Composite Scheme
of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports & Terminals Limited
(EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).
The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics Business
and the Oilfields Services Business into ESL.
Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields
Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing
in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are
based on financial statements as on September 30, 2010.The difference between the values of assets and liabilities
transferred was first adjusted against share capital (Rs. 205.23 crore), Rs. 25 crore against Debenture Redemption
Reserve and the balance to General Reserve of the Company.
Foreign Currency Convertible Bonds aggregating to USD 400 lakhs (out of USD 2,800 lakhs) issued by ESPLL stood
transferred to ESL.
In consideration of the demerger, the Company allotted 41,04,55,552 equity shares of Rs.10/- each as fully paid up to
the eligible members of ESPLL whose name were recorded in the register of members of ESPLL as on May 21, 2011, in
terms of the Scheme as detailed below.
101
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
Name of the company No. of shares
Essar Shipping & Logistics Limited (immediate holding company) 340,903,706
Essar Global Limited 66
Essar Steel India Limited ( subsidiary of Essar Global Limited) 2,547,223
Erstwhile other shareholders of ESPLL 67,004,557
Total 410,455,552
27 CONTINGENT LIABILITIES (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
Claims against the Group not acknowledged as debt 322.59 1,025.00
Guarantees given by banks 905.35 905.35
Guarantee on behalf of others 10,400.00 10,400.00
Bills discounted with banks 2,500.00 –
Interest on facility E on principal amount of facility stoppage as per
MRA (refer note no. 5 ( c ) (iv) )
– 18,780.00
Capital commitments
Estimated amount of contract remaining to be executed on capital
account and not provided for
99,943.15 66,221.40
28 COMMITTED LIABILITY FOR FUTURE LEASE PAYMENT
OPERATING LEASE (Rs. in lakhs)
Particulars As at
March 31, 2012
As at
March 31, 2011
a. Payable not later than 1 year 449.98 333.51
b. Payable later than 1 year and not later than 5 years 1,831.33 1334.02
c. Payable later than 5 years 9,604.27 10080.21
Total 11,885.58 11,747.74
29 SEGMENT DISCLOSURE (Rs. in lakhs)
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
a) Business segment
Segment revenue
Operating income
Fleet operating and chartering 3,622.00 73,490.37
Surface transport services – 40,658.00
Port and terminal services 110,008.19 70,555.85
Oilfields services – 16,852.78
Unallocated 3,422.66 14,531.07
Total 117,052.85 216,088.07
Notes forming part of financial statements
102 Annual Report 2011-12
Less: Inter segment revenue (3,949.50) (7,475.81)
Net Income from operation 113,103.35 208,612.26
Segment results
Fleet operating and chartering 474.57 5,435.00
Surface transport services – 1,046.50
Port and terminal services 66,599.47 36,772.50
Oilfields services – 1,332.46
Unallocated 2,222.66 14,531.50
Profit from operation before interest and finance charges 69,296.70 59,117.96
Less: Unallocable Interest and finance expense (42,080.84) (47,375.30)
Profit before Tax and Exception item 27,215.86 11,742.66
Less: Exceptional Item (23,551.18) –
Profit before Tax 3,664.68 11,742.66
Less: Income tax 6,219.54 (3,460.34)
Profit before share of minority’s interest 9,884.22 8,282.32
Share of minority’s interest (3,488.75) (1,268.96)
Profit for the year 6,395.47 7,013.36
Segment assets
Fleet operating and chartering 8,890.70 8,606.20
Port and terminal services 642,463.16 552,254.00
Unallocated 47,571.42 37,284.00
Total Assets 698,925.29 598,144.20
Segment liabilities
Fleet operating and chartering (4,568.54) (8,370.12)
Port and terminal services (86,702.64) (66,580.00)
Total liabilities (91,271.18) (74,950.12)
Fixed assets acquired during the year
Fleet operating and chartering 5,002.50 41,817.26
Surface transport services – 1,298.92
Port and terminal services 95,860.21 71,105.16
Total 100,862.71 114,221.34
Depreciation*
Fleet operating and chartering 31.93 9,349.25
Surface transport services – 341.25
Port and terminal services 21,992.63 17,585.15
Oilfields services – 7,479.80
Total 22,024.56 34,755.45
* includes depreciation of Rs. 909.36 lakhs (previous year Rs. 747 lakhs) transferred to expenditure during
construction and Rs. 11.16 lakhs (previous year Rs. 1,925 lakhs) recouped from fixed assets revaluation
reserve.
29 SEGMENT DISCLOSURE (CONTD.) (Rs. in lakhs)
Particulars Year ended
March 31, 2012
Year ended
March 31, 2011
103
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Segment revenue Year ended
March 31, 2012
Year ended
March 31, 2011
b) Geographical segment
India 113,103.35 189,861.00
China – 1,508.00
U.S.A. – 2,497.00
U.K. – 2,017.00
Rest of the world – 12,729.00
Total 113,103.35 208,612.00
30 EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the following data:
Particulars As at
March 31, 2012
As at
March 31, 2011
Net profit after tax and minority interest attributable to equity share
holders for basic EPS (Rs. in lakhs)
6,395.47 7,015.18
Add: Interest on foreign currency convertible bonds (FCCB) 62.32 –
Exchange loss / (gain) on FCCB conversion (Rs. in lakhs) 4.51 –
Net profit after tax attributable to equity share holders for diluted EPS
(Rs. in lakhs)
6,462.30 7,015.18
Weighted average no. of equity shares outstanding during the year
for Basic EPS (nos.) 410,455,552 410,455,552
for Diluted EPS (nos.) 430,953,476 422,796,927
Basic EPS (Rs.) 1.56 1.71
Diluted EPS (Rs.) 1.50 1.66
Nominal value per Share (Rs.) 10 10
Reconciliation between number of shares used for calculating basic
and diluted earnings per share
a) Number of shares used for calculating basic EPS 410,455,552 410,455,552
b) Potential equity shares (convertible FCCB) 20,475,463 12,341,375
c) Potential equity shares (ESOP) 22,460 –
d) Number of shares used for calculating diluted EPS (a+b+c) 430,953,476 422,796,927
Note : The Company has capitalised interest of Rs. 1,043.95 lakhs (Previous year Rs. 247.88 lakhs) on FCCB in consolidated
financial statement, which is not considered for calculation of profit for diluted EPS.
Notes forming part of financial statements
104 Annual Report 2011-12
31 FOREIGN CURRENCY EXPOSURE
i) There were no forward / options contracts entered in to by the Group during the financial year to hedge its
foreign currency exposures.
ii) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are
given below:
(A) Amount receivable in foreign currency on account of the following:
Particulars Rs. in lakhs Rs. in lakhs Currency Foreign currency in lakhs
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Export of goods and services 798.00 – USD 15.6 –
Bank balances 4.94 5.00 USD 0.10 0.11
(B) Amount payable in foreign currency on account of the following:
Particulars Rs. in lakhs Rs. in lakhs Currency Foreign currency in lakhs
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2012
Year ended
March 31,
2011
Import of goods and services 46.21 – USD 0.90 –
– 66.13 GBP – 0.84
– 53.06 EUR – 0.84
– 2.74 SGD – 0.08
Buyers credit (including
interest accrued)
14,182.25 8,309.63 USD 277.23 186.11
209.81 – EUR 3.03 –
48.33 – SEK 6.43 –
Foreign Currency
Convertible Bonds
20,549.57 17,868.00 USD 401.70 401.70
32 TAXATION
Income tax on income from qualifying fleet is provided on the basis of Tonnage Tax Scheme. Income tax on other income
is provided as per other provisions of Income Tax Act, 1961. Taxes on income earned by foreign subsidiaries are provided
based on tax laws of its domicile country.
33 GOING CONCERN
As on March 31, 2012, the Group’s current liabilities exceeded its current assets by Rs. 78,611.84 lakhs due to
classification as current of borrowings amounting to Rs. 52,349.22 lakhs due repayable within the next one year and Rs.
33,111.51 lakhs payable for purchase of capital assets. Subsequent to year end, the Company has rolled over loans of
Rs. 30,000 lakhs for a period exceeding 12 months, drawn amounts of Rs. 19,093 lakhs under various existing facilities
for payment to creditors for purchase of capital assets and through the Operational Cash Flows. The Company is also in
discussion for raising funds through equity. As such, the excess current liabilities position will not affect the operations of
the Group and therefore these financial statements have been prepared as a going concern.
34 EMPLOYEE STOCK OPTION SCHEME
The members of the Company at the annual general meeting held on September 9, 2011 have approved the issue of
employee stock options under the “Essar Ports Employee Stock Options Scheme -2011” (hereinafter referred to as the
Scheme). The Scheme shall be operated and administered under the superintendence of the remuneration committee of
the Board.
105
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
Eligible employees of the Company, its holding company and subsidiaries are entitled to options under the Scheme. Each
option entitles the eligible employees to one underlying equity share of the Company.
A trust will be formed for the administration of the Scheme. The remuneration committee is authorised to grant the
options to the eligible employees and the exercise price of the options in terms of the Scheme. 1/3 options granted will
vest in the hands of the eligible employees over a period of 3 years commencing from the end of the 3rd, 4th and 5th year
respectively from the date of grant of the option. The eligible employees can exercise the options vested in them within a
period of 7 years from the date of vesting.
The difference between the fair price of the share underlying the options granted on the date of grant of option and the
exercise price of the option (being the intrinsic value of the option) representing stock compensation expense is expensed
over the vesting period.
Employee stock options details for ESOP as on the Balance sheet date are as follows:
Particulars Year ended
March 31, 2012
Options
(numbers)
Weighted average
exercise price per
option
Option outstanding at the beginning of the year – –
Granted during the year 7,40,334 71.1
Vested during the year – –
Exercised during the year – –
Lapsed during the year – –
Options outstanding at the end of the year 7,40,334 71.1
The impact on statement of profit and loss and earnings per share if the ‘fair value’ of the Options (on the date of the
grant) were considered instead of the ‘intrinsic value’ is as under:
(Rs. in lakhs)
Particulars Year ended
March 31, 2011
Net Profit / (loss) (as reported) –
Add / (Less): stock based employee compensation (intrinsic value) –
Add / (Less): stock based compensation expenses determined under fair value method for the
grants issued
26.78
Net Profit / (loss) (proforma) (26.78)
Basic & dilutive earnings per share (as reported) –
Basic & dilutive earnings per share (proforma) (0.01)
Diluted earnings per share (as reported) (refer note 27) –
Diluted earnings per share (proforma) (0.01)
The fair value of the Options granted is estimated on the date of grant using Black Scholes Options Pricing Model taking
into account the terms and conditions upon which the Options were granted. The following table lists the inputs to the
model used for calculating fair value:
Assumptions Year ended
March 31, 2012
Risk free interest rate 8.36%
Expected life 58
Expected annual volatility of shares 64.81%
Expected dividend yield 0.00%
Notes forming part of financial statements
106 Annual Report 2011-12
35 EMPLOYEE BENEFITS :
The Company has classified the various benefits provided to employees as under:
I. Defined contribution plans
The Company has recognised the following amounts in the statement of profit and loss during the year:
(Rs. in lakhs)
Particulars March 31, 2012 March 31, 2011
a) Employer’s contribution to gratuity fund (offshore crew staff) 0.60 29.00
b) Group accident policy premium (all employees) 4.58 10.33
c) Contribution to pension fund (offshore crew staff) 2.39 11.00
d) Employer’s contribution to superannuation fund 0.94 16.33
e) Employer’s contribution to provident fund (offshore crew staff) 101.36 115.53
Total 109.88 182.19
The above amounts are included in ‘contribution to staff provident and other funds’ (refer note 18).
II. Defined benefit
plans
a. Contribution to provident fund
b. Contribution to gratuity fund
c. Provision for compensated absences (CA)
In accordance with AS-15, relevant disclosures are as under:
(A) Changes in present value of defined benefit obligation: (Rs. in lakhs)
Particulars Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Present value of defined
benefit obligation – opening
balance
1,408.24 1,668.75 178.58 156.06 (0.00)* 194.70 231.24 278.17
Current service cost 19.26 119.80 40.36 48.31 – 15.00 51.53 31.92
Current service contribution-
employee
36.26 132.93 – – – – 4.15 –
Interest cost 15.92 86.52 15.44 11.65 – 8.00 15.07 18.53
Past service cost – – – 66.92 – – – –
Plan amendment – – – 32.65 – – – –
Acquisitions 68.52 (419.04) – (156.46) – (225.70) – (167.17)
Benefits paid – (259.60) (3.21) (13.41) – – (25.97) (13.29)
Actuarial (gain) / loss on
obligations
(1,279.74) 78.88 10.43 32.86 – 8.00 38.60 83.09
Present value of defined
benefit obligation – closing
268.46 1,408.24 241.60 178.59 (0.00)* (0.00) 314.62 231.24
* Amount is less than Rs. 1 lakh
107
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(B) Changes in the fair value of plan asset: (Rs. in lakhs)
Particulars Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Fair value of plan assets –
opening
1,408.24 1,668.74 136.90 197.30 – – – –
Expected return on plan
assets
15.92 86.52 13.20 20.54 – – – –
Actual return on plan assets – – – – – – – –
Acquisition adjustment – (166.30) – (165.01) – – – –
Actuarial gains / (losses) (1,279.74) 78.88 0.55 (4.49) – – – –
Contributions by the
employer / employees
124.04 – 38.43 101.98 – – – (1.97)
Benefits paid – (259.60) (3.21) (13.41) – – – (5.46)
Fair value of plan assets –
Closing
268.46 1,408.24 185.87 136.90 – – – (7.43)
(C) Amount recognised in balance sheet: (Rs. in lakhs)
Particulars Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Present value of defined
benefit obligation at the end
of the year
268.46 1,408.24 241.60 178.59 (0.00) – 314.62 231.24
Fair value of plan assets at
end of the year
268.46 1,408.24 185.87 136.90 – – – (7.43)
Liability / (asset) recognised in
the Balance Sheet (included
in current liabilities and
provisions) (refer note 8)
– – 55.73 41.69 (0.00) – 314.62 238.67
(D) Expenses recognised in the statement of profit and loss: (Rs. in lakhs)
Particulars Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Current service cost 19.26 119.80 40.36 48.31 – 15.00 51.53 22.44
Interest cost 15.92 86.52 15.44 11.65 – 8.00 19.22 18.53
Expected return on plan
assets
(15.92) (86.52) (13.20) (20.54) – – – –
Past service cost – – 0.89 98.69 – – – –
Net actuarial (gain) / loss
recognised in the period
– – 9.88 37.35 – 8.00 26.86 92.56
Total expenses recognised
in the Statement of Profit
and Loss (Included in
Contribution to provident and
other funds) (refer note 21)
19.26 119.80 53.37 175.47 – 31.00 97.60 133.52
Notes forming part of financial statements
108 Annual Report 2011-12
(E) Experience history: (Rs. in lakhs)
Gratuity-shore officers (funded)
Particulars March 31, 12 March 31, 11 March 31, 10 March 31, 09 March 31, 08
Defined benefit obligation
at the end of the year
(241.59) (178.21) (155.86) (78.16) NA
Plan assets at the end of
the year
185.84 137.10 197.56 139.84 NA
Funded status (55.75) (31.10) 41.70 61.68 NA
Experience gain / (loss)
adjustments on plan
liabilities
(18.99) (35.02) (66.04) 85.11 NA
Experience gain / (loss)
adjustments on plan assets
0.55 (5.23) (9.36) 0.17 NA
Actuarial gain / (loss) due to
change on assumptions
8.58 2.10 4.15 – NA
(Rs. in lakhs)
Gratuity - offshore officers (non funded)
Particulars March 31, 12 March 31, 11 March 31, 10 March 31, 09 March 31, 08
Defined benefit obligation
at the end of the year
– – (190.00) (280.00) NA
Plan assets at the end of
the year year
– – – – NA
Funded status – – (190.00) (280.00) NA
Experience gain / (loss)
adjustments on plan
liabilities
– – 90.00 59.00 NA
Experience gain / (loss)
adjustments on plan assets
– – – – NA
Actuarial gain / (loss) due to
change on assumptions
– – 34.00 52.00 NA
(Rs. in lakhs)
CA-paid leave (non funded)
Particulars March 31, 12 March 31, 11 March 31, 10 March 31, 09 March 31, 08
Defined benefit obligation
at the end of the year
(314.62) (231.41) (278.40) (105.27) NA
Plan assets at the end of
the year
– – – – NA
Funded status (314.62) (231.41) (278.40) (105.27) NA
Experience gain / (loss)
adjustments on plan
liabilities
(35.69) (94.13) (140.29) 170.00 NA
Experience gain / (loss)
adjustments on plan assets
– – – – NA
Actuarial gain / (loss) due to
change on assumptions
19.99 2.13 21.46 (54.00) NA
109
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(F) Category of plan assets:
Percentage of each category
of plan assets to total fair
value of plan assets:
Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Administered by Life
Insurance Corporation of India
– – 100% 100.00% NA NA NA NA
Government of India security 25.00% 25.00% – – NA NA NA NA
Public sector bonds / TDRs 60.00% 60.00% – – NA NA NA NA
State government securities 15.00% 15.00% – – NA NA NA NA
(G) Actuarial assumptions
In accordance with Accounting Standard (AS) 15 (Revised), actuarial valuation as at the year end was done
in respect of the aforesaid defined benefit plans based on the following assumptions:
i) General assumptions:
Particulars Provident fund (funded) Gratuity-shore officers
(funded)
Gratuity-off shore officers
(non funded)
CA-paid leave (non funded)
March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11 March 31, 12 March 31, 11
Discount rate (per annum) 8.50% 7.80% 8.50% 8.00% N.A N.A 8.50% 8.00%
Rate of return on plan assets
(for funded scheme)
8.60% 8.50% 8.50% 8.50% N.A N.A NA NA
Expected retirement age of
employees (years)
58 58 58 58 58 58 58 58
Separation rate of employees – – 10.00% 10.00% N.A N.A 10.00% 10.00%
Rate of increase in
compensation
– – 9.00% 9.00% N.A N.A 9.00% 9.00%
ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) Mortality
table.
iii) Leave policy:
a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be
availed by the employee against future sick leave; the sick leave balance is not available for encashment.
b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent
not availed by the employee is available for encashment on separation from the Company up to a maximum
of 120 days.
iv) As this is the fourth year of implementation of Accounting Standard (AS) –15 (Revised 2005), only
corresponding previous three year figure have been furnished.
v) The contribution to be made by the Company for funding its liability for gratuity during the financial year 2012–13
will be made as per demand raised by the fund administrator Life Insurance Corporation of India.
36 RELATED PARY TRANSACTIONS :
(a) Holding companies:
1 Essar Global Limited, Cayman Islands (ultimate holding company)
2 Essar Shipping & Logistics Limited, Cyprus (immediate holding company)
Notes forming part of financial statements
110 Annual Report 2011-12
(c) Fellow subsidiaries / other related parties / affiliate where there have been transactions:
(b) Key management personnel:
1 Mr. Rajiv Agarwal, Whole-time Director (w.e.f. May 27, 2010)
2 Mr. Shailesh Sawa, Whole-time Director (w.e.f. July 24, 2010)
3 Mr. Kamla Kant Sinha, Whole-time Director
4 Capt. Subhas Das, Whole-time Director (Essar Bulk Terminal Limited)
5 Capt. Rajesh Beri, Whole-time Director (Essar Bulk Terminal Paradip Limited) ( w.e.f. October 17, 2011)
6 Capt. Deepak Sachdeva, Whole-time Director (Vadinar Oil Terminal Limited) ( w.e.f. October 18, 2011)
7 Mr. Girish Joshi, Manager (Vadinar Ports & Terminals Limited) ( w.e.f. October 18, 2011)
8 Mr. Sanjay Mehta, Managing Director (Essar Shipping Ports & Logistics Limited) (upto July 24, 2010)
9 Mr. A. R. Ramakrishnan, Whole-time Director (Essar Shipping Ports & Logistics Limited) (upto May 22, 2011)
10 Mr. V. Ashok, Whole-time Director (Essar Shipping Ports & Logistics Limited) (upto May 24, 2010)
11 Mr. A. K. Musaddy, Whole-time Director (Essar Logistics Limited - “ELL”) (till ELL ceased to be subsidary -
October 1, 2011
24 Essar Africa Holdings Limited
25 Essar Agrotech Limited
26 Essar Bulk Terminal (Paradip) Limited (till March 31, 2011)
27 Essar Energy Holdings Limited
28 Essar Energy Services Limited
29 Essar Engineering Services Limited
30 Essar Exploration South East Asia Limited
31 Essar Gulf FZE
32 Essar Heavy Engineering Services Limited
33 Essar Holdings Limited
34 Essar House Limited
35 Essar House Services Limited
36 Essar Information Technology Limited
37 Essar Infrastructure Holdings Limited
38 Essar Infrastructure Services Limited
39 Essar Investments Limited
40 Essar Logistics Holdings Limited
41 Essar Logistics Limited (w.e.f. October 1, 2010)
42 Essar Offshore Subsea Limited
43 Essar Oil Limited
44 Essar Oil Limited (E&P)
45 Essar Dredging Limited (till July 1, 2011)
46 Essar Oilfields Services Limited (w.e.f. October 1, 2010)
1 Essar Oilfield Services India Limited
(w.e.f. October 1, 2010)
2 Essar Power Gujarat Limited
3 Essar Power Limited
4 Essar Power M. P. Limited
5 Essar Project Management Consultancy Limited
6 Essar Projects (India) Limited
7 Essar Properties Limited
8 Essar Services India Limited
9 Essar Shipping & Logistics (Panama) Inc.
10 Essar Shipping (Cyprus) Limited
11 Essar Shipping Limited (w.e.f. October 1, 2010)
12 Essar Steel Algoma Inc.
13 Essar Steel India Limited (formerly known as
Essar Steel Limited)
14 Essar Telecom Retail Limited
15 Futura Travels Limited
16 Global Supplies FZE
17 Imperial Consultants & Securities Pvt. Limited
18 India Securities Limited
19 The Mobile Store Limited
20 Vadinar Power Company Limited
21 Aegis Limited
22 Arkay Holdings Limited
23 Bhander Power Limited
111
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
The details of transactions with related parties
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
INCOME
Fleet operating income
Essar Steel India Limited – – – 74,386.22 – – – 74,386.22
Essar Shipping & Logistics Limited – 168.45 – – – – – 168.45
Essar Logistics Limited – – – 869.76 – – – 869.76
Essar Projects (India) Limited – – – 2,904.71 – – – 2,904.71
Essar Power Gujarat Limited – – – 3,012.49 – – – 3,012.49
Essar Power M. P. Limited – – – 5,809.38 – – – 5,809.38
Essar Oil Limited (E&P) – – – 2,148.63 – – – 2,148.63
Essar Power Limited – – – 12.78 – – – 12.78
Vadinar Power Company Limited – – – 374.42 – – – 374.42
Total – 168.45 – 89,518.41 – – – 89,686.86
Port services rendered and wharfage
charges
Essar Steel India Limited – – 1,571.95 877.00 – – 1,571.95 877.00
Essar Oil Limited – – 67,482.46 51,793.80 – – 67,482.46 51,793.80
Essar Logistics Limited – – 322.42 27.00 – – 322.42 27.00
Essar Shipping Limited – – 1,622.25 – – – 1,622.25 –
Essar Shipping (Cyprus) Limited – – 24.25 – – – 24.25 –
Essar Offshore Subsea Limited – – 21.58 – – – 21.58 –
Essar Heavy Engineering Services
Limited – – 22.64 45.00 – – 22.64 45.00
Total – – 71,067.55 52,742.80 – – 71,067.55 52,742.80
Cargo handling services rendered
Essar Logistics Limited – – 1,958.01 1,689.57 – – 1,958.01 1,689.57
Essar Steel India Limited – – 33,370.06 19,002.54 – – 33,370.06 19,002.54
Total – – 35,328.07 20,692.11 – – 35,328.07 20,692.12
Other income
Essar Africa Holdings Limited – – 798.04 – – – 798.04 –
Total – – 798.04 – – – 798.04 –
Equipment lease rental income
Essar Steel India Limited – – – 1.20 – – – 1.20
Total – – – 1.20 – – – 1.20
Interest income
Essar Shipping & Logistics Limited – 1,244.19 – – – – – 1,244.19
Essar Oilfield Services India Limited – – – 2,575.96 – – – 2,575.96
Essar Oilfields Services Limited – – – 126.92 – – – 126.92
Essar Oil Limited – – 809.88 984.92 – – 809.88 984.92
Essar Investments Limited – – – 1,630.55 – – – 1,630.55
Essar Shipping (Cyprus) Limited – – 1.03 – – – 1.03 –
Essar Bulk Terminal Paradip Limited – – – 83.89 – – – 83.89
Total – 1,244.19 810.91 5,402.25 – – 810.91 6,646.45
Interest income on debenture
Imperial Consultants & Securities Pvt.
Limited – – – 1,740.06 – – – 1,740.06
Total – – – 1,740.06 – – – 1,740.06
Miscellaneous income
Essar Shipping Limited – – 1.92 – – – 1.92 –
Essar Logistics Limited – – 12.09 – – – 12.09 –
Essar Projects (India) Limited – – 6.14 – – – 6.14 –
Arkay Holdings Limited – – 1.65 – – – 1.65 –
Total – – 21.80 – – – 21.80 –
Notes forming part of financial statements
112 Annual Report 2011-12
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Aircraft usage charges reimbursed
Essar Oil Limited – – – 900.00 – – – 900.00
Total – – – 900.00 – – – 900.00
Expenditure during construction -
income
Aegis Limited – – 27.46 10.10 – – 27.46 10.10
Futura Travels Limited – – 43.31 4.47 – – 43.31 4.47
Futura Aviation Limited – – 77.00 – – – 77.00 –
Essar Oil Limited – – 29.17 1.17 – – 29.17 1.17
Essar Investments Limited – – 541.75 – – – 541.75 –
Essar Projects (India) Limited – – 35.50 – – – 35.50 –
Essar House Limited – – 22.08 – – – 22.08 –
Essar Infrastructure Services Limited – – 83.85 – – – 83.85 –
Essar Engineering Services Limited – – 427.32 – – – 427.32 –
Essar Power Gujarat Limited – – 19.65 – – – 19.65 –
Essar Services India Limited – – 138.79 – – – 138.79 –
Total – – 1,445.88 15.73 – – 1,445.88 15.73
Hire / demurrage charges
Essar Shipping & Logistics (Panama) Inc. – – – 518.46 – – – 518.46
Essar Shipping & Logistics Limited – 2,223.90 – – – – – 2,223.90
Essar Projects (India) Limited – – – 118.09 – – – 118.09
Essar Shipping Limited – – 96.66 – – – 96.66 –
Essar Logistics Limited – – 359.78 – – – 359.78 –
Total – 2,223.90 456.44 636.54 – – 456.44 2,860.45
Freight / lease hire charges
Essar Oil Limited – – 129.34 92.96 – – 129.34 92.96
Essar House Limited – – 11.04 99.75 – – 11.04 99.75
Essar Logistics Limited – – 19.57 18.26 – – 19.57 18.26
Essar Infrastructure Services Limited – – 41.85 327.94 – – 41.85 327.94
Essar Projects (India) Limited – – – 342.59 – – – 342.59
Total – – 201.80 881.50 – – 201.80 881.50
Fuel oil purchase / power
Essar Oil Limited – – 112.15 750.65 – – 112.15 750.65
Bhander Power Limited – – 419.55 137.00 – – 419.55 137.00
Total – – 531.70 887.65 – – 531.70 887.65
Stores and spares-sale
Essar Shipping & Logistics (Panama) Inc. – – – 176.00 – – – 176.00
Total – – – 176.00 – – – 176.00
Stores and spares - expenses
Essar Projects (India) Limited – – – 2.80 – – – 2.80
Essar Heavy Engineering Services
Limited – – – 1.00 – – – 1.00
Essar Steel India Limited – – 6.38 114.66 – – 6.38 114.66
Total – – 6.38 118.47 – – 6.38 118.47
Manning charges
Essar Infrastructure Services Limited – – – 7.96 – – – 7.96
Essar Information Technology Limited – – – 3.52 – – – 3.52
Total – – – 11.48 – – – 11.48
O & M charges
Essar Oil Limited – – 2,023.61 1,399.27 – – 2,023.61 1,399.27
Total – – 2,023.61 1,399.27 – – 2,023.61 1,399.27
Managerial remuneration
Mr. Sanjay Mehta – – – – – 23.28 – 23.28
Mr. A. R. Ramkrishnan – – – – 15.86 139.00 15.86 139.00
113
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Mr. V. Ashok – – – – – 14.79 – 14.79 Mr. Rajiv Agarwal – – – – 215.87 91.60 215.87 91.60 Mr. Shailesh Sawa – – – – 113.61 97.48 113.61 97.48 Mr. Kamla Kant Sinha – – – – 156.38 116.34 156.38 116.34 Capt. Rajen Sachar – – – – 22.12 – 22.12 – Capt. Deepak Sachdeva – – – – 17.66 – 17.66 – Capt. Subhas Das – – – – 84.03 78.00 84.03 78.00 Capt. Rajesh Beri – – – – 39.81 – 39.81 – Mr. Girish Joshi – – – – 11.43 – 11.43 –
Total – – – – 676.77 560.49 676.77 560.49
Business centre feesEssar Infrastructure Services Limited – – 104.63 366.00 – – 104.63 366.00 Essar Agrotech Limited – – – 2.00 – – – 2.00 Aegis Limited – – 42.34 – – – 42.34 – Essar House Limited – – 23.93 66.00 – – 23.93 66.00
Total – – 170.90 434.00 – – 170.90 434.00
RentEssar Steel India Limited – – – 14.00 – – – 14.00 Essar House Limited – – 33.12 33.91 – – 33.12 33.91 Essar Infrastructure Services Limited – – 53.04 – – – 53.04 – Arkay Holdings limited – – 60.13 – – – 60.13 –
Total – – 146.29 47.91 – – 146.29 47.91
Repair and maintenanceEssar Steel India Limited – – – 3.46 – – – 3.46 Essar Projects (India) Limited – – 440.73 135.06 – – 440.73 135.06 Essar Agrotech Limited – – – 5.30 – – – 5.30 Essar Infrastructure Services Limited – – 76.73 22.26 – – 76.73 22.26 Essar Information Technology Limited – – – 18.71 – – – 18.71 Essar Heavy Engineering Services
Limited – – 2.50 – – – 2.50 –
Total – – 519.96 184.77 – – 519.96 184.77
Cargo handling expensesEssar Projects (India) Limited – – – 220.64 – – – 220.64 Total – – – 220.64 – – – 220.64 Travelling / lodging expensesFutura Travels Limited – – 278.70 765.40 – – 278.70 765.40 Arkay Holdings limited – – 0.37 0.37 – – 0.37 0.37 Essar Oil Limited – – – 16.94 – – – 16.94 Essar Infrastructure Services Limited – – – 0.13 – – – 0.13 Essar House Services Limited – – 0.05 – – – 0.05 – Essar Steel India Limited – – 2.30 11.00 – – 2.30 11.00
Total – – 281.42 793.85 – – 281.42 793.85
Professional / advisory fees /
agency / management feesIndia Securities Limited – – – 6.00 – – – 6.00 Essar Investments Limited – – 386.63 2,796.32 – – 386.63 2,796.32 Aegis Limited – – 138.54 53.43 – – 138.54 53.43 Essar Energy Services Limited – – 283.21 324.24 – – 283.21 324.24 Essar Engineering Services Limited – – 41.23 45.22 – – 41.23 45.22 Essar Logistics Limited – – – 12.00 – – – 12.00 Essar Oil Limited – – 614.16 722.99 – – 614.16 722.99 Essar Shipping Limited – – 31.51 – – – 31.51 – Essar Services India Limited – – 69.46 – – – 69.46 – Essar Information Technology Limited – – 3.77 63.66 – – 3.77 63.66
Total – – 1,568.51 4,023.86 – – 1,568.51 4,023.86
Notes forming part of financial statements
114 Annual Report 2011-12
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Bank Charges & Commitment fees
recovered
Arkay Holdings Limited – – 3.55 – – – 3.55 –
Essar Steel India Limited – – 210.10 – – – 210.10 –
Essar Heavy Engineering Services Limited – – 3.25 – – – 3.25 –
Total – – 216.90 – – – 216.90 –
Business promotion expenses
Essar Steel India Limited – – 1.92 – – – 1.92 –
Total – – 1.92 – – – 1.92 –
Insurance
Essar Logistics Limited – – 6.06 – – – 6.06 –
Total – – 6.06 – – – 6.06 –
Employee accommodation expenses
Essar Steel India Limited – – 12.51 – – – 12.51 –
Total – – 12.51 – – – 12.51 –
Printing and stationery
Essar Infrastructure Services Limited – – 0.23 – – – 0.23 –
Total – – 0.23 – – – 0.23 –
Staff welfare
Essar Infrastructure Services Limited – – 0.39 – – – 0.39 –
Essar Steel India Limited – – 5.00 – – – 5.00 –
Total – – 5.39 – – – 5.39 –
Reimbursement of expenses
Futura Travels Limited – – – 201.78 – – – 201.78
Essar Investments Limited – – – 1,001.00 – – – 1,001.00
Essar Oil Limited – – – 484.71 – – – 484.71
Essar Oilfields Services Limited – – – 26.25 – – – 26.25
India Securities Limited – – – 27.94 – – – 27.94
Essar Logistics Limited – – – 775.00 – – – 775.00
Essar Power Gujarat Limited – – 290.04 5.68 – – 290.04 5.68
Essar Power M. P. Limited – – – 46.41 – – – 46.41
Essar Steel India Limited – – 14.38 1,555.60 – – 14.38 1,555.60
Subhas Das – – – – 14.58 3.88 14.58 3.88
Essar Infrastructure Services Limited – – – 0.11 – – – 0.11
Essar Heavy Engineering Services
Limited – – 3.25 – – – 3.25 –
Essar Shipping & Logistics (Panama) Inc. – – – 25.62 – – – 25.62
Total – – 307.67 4,150.10 14.58 3.88 322.25 4,153.98
Jetty constructions and project
management expenses
Essar Projects (India) Limited – – 1,377.83 1,096.73 – – 1,377.83 1,096.73
Essar Oil Limited – – 1.25 0.21 – – 1.25 0.21
Aegis Limited – – 32.25 – – – 32.25 –
Futura Travels Limited – – 59.52 5.00 – – 59.52 5.00
Essar Engineering Services Limited – – 3.60 224.58 – – 3.60 224.58
Essar Investments Limited – – 160.87 – – – 160.87 –
Essar Infrastructure Services Limited – – 76.73 – – – 76.73 –
Essar Steel India Limited – – 11.93 – – – 11.93 –
Essar Logistics Limited – – 94.24 – – – 94.24 –
Essar House Limited – – 22.08 – – – 22.08 –
Total – – 1,840.30 1,326.52 – – 1,840.30 1,326.52
115
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Jetty construction expenses -
procurementEssar Steel India Limited – – 4.04 572.25 – – 4.04 572.25 Essar Oil Limited – – 6.63 132.00 – – 6.63 132.00 Essar Heavy Engineering Services
Limited – – – 1.27 – – – 1.27
Total – – 10.67 705.52 – – 10.67 705.52 Jetty construction expenses - saleEssar Steel India Limited – – 5.65 11.00 – – 5.65 11.00 Essar Heavy Engineering Services
Limited – – 127.30 44.00 – – 127.30 44.00
Essar Logistics Limited – – – 9.24 – – – 9.24 Total – – 132.95 64.24 – – 132.95 64.24 Lighterage costsEssar Logistics Limited – – – 3,300.00 – – – 3,300.00 Arkay Holdings limited – – 848.95 – – – 848.95 – Total – – 848.95 3,300.00 – – 848.95 3,300.00 Interest on loan / depositIndia Securities Limited – – – 24.00 – – – 24.00 Essar Logistics Limited – – – 13.00 – – – 13.00 Bhander Power Limited – – – 4.00 – – – 4.00 Total – – – 41.00 – – – 41.00 Interest on othersEssar Logistics Limited – – 290.00 – – – 290.00 – Total – – 290.00 – – – 290.00 – Interest on lease loanEssar Shipping & Logistics Limited – 1,781.89 – – – – – 1,781.89 Total – 1,781.89 – – – – – 1,781.89 Purchase of equity sharesEssar Bulk Terminal Paradip Limited – – – 2.00 – – – 2.00 Total – – – 2.00 – – – 2.00 Purchase of preference sharesEssar Steel India Limited – – 18,590.26 – – – 18,590.26 – Essar Logistics Limited – – 0.83 – – – 0.83 – Essar Bulk Terminal Paradip Limited – – – 6,600.00 – – – 6,600.00
Total – – 18,591.09 6,600.00 – – 18,591.09 6,600.00
Share subscriptionEssar Energy Holdings Limited – – – 5,486.25 – – – 5,486.25 Total – – – 5,486.25 – – – 5,486.25 Sale of investmentEssar Investments Limited – – 5.00 – – – 5.00 Total – – 5.00 – – – 5.00 – Advance for allotment of sharesEssar Oilfields Services Limited – – – 142,331.35 – – – 142,331.35 Essar Investments Limited – – – 10,075.59 – – – 10,075.59 Essar Bulk Terminal Paradip Limited – – – 9,050.00 – – – 9,050.00 Total – – – 161,456.94 – – – 161,456.94 Purchase of fixed assets Arkay Holdings Limited – – 33.00 – – – 33.00 – Essar Shipping & Logistics (Panama) Inc. – – – 583.06 – – – 583.06 Essar Projects (India) Limited – – 10,944.21 11,997.90 – – 10,944.21 11,997.90 Essar Logistics Limited – – 5,853.28 529.07 – – 5,853.28 529.07 Essar Engineering Services Limited – – 89.04 191.64 – – 89.04 191.64 Global Supplies FZE – – 4,499.99 – – – 4,499.99 – Total – – 21,419.52 13,301.67 – – 21,419.52 13,301.67 Share application money receivedEssar Shipping & Logistics Limited – 140,720.65 – – – – – 140,720.65 Total – 140,720.65 – – – – – 140,720.65
Notes forming part of financial statements
116 Annual Report 2011-12
(Rs. in lakhs)
Nature of transactions Holding company Fellow subsidiaries /
other related parties /
affiliate
Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Redemption of preference sharesEssar Shipping & Logistics Limited – 115,893.60 – – – – – 115,893.60 Total – 115,893.60 – – – – – 115,893.60 Preference dividend paidEssar Shipping & Logistics Limited – 1,759.57 – – – – – 1,759.57
Total – 1,759.57 – – – – – 1,759.57
Capital work in progress - CWIP Essar Engineering Services Limited – – 323.37 1,411.24 – – 323.37 1,411.24 Essar Projects (India) Limited – – 51,829.96 23,243.97 – – 51,829.96 23,243.97 Essar Logistics Limited – – – 7.27 – – – 7.27 Essar Project Management
Consultancy Limited – – 121.97 110.69 – – 121.97 110.69
Total – – 52,275.30 24,773.17 – – 52,275.30 24,773.17
CWIP and capital advances givenEssar Projects (India) Limited – – – 10,294.00 – – – 10,294.00 Total – – – 10,294.00 – – – 10,294.00 Loans and advances including
deposits givenEssar Shipping & Logistics Limited – 1,438.37 – – – – – 1,438.37 Essar Bulk Terminal Paradip Limited – – – 656.53 – – – 656.53 Essar House Limited – – 56.00 – – – 56.00 – Essar Infrastructure Services Limited – – 209.00 – – – 209.00 – Essar Oilfield Services India Limited – – – 100.00 – – – 100.00 Essar Oilfields Services Limited – – – 1,381.00 – – – 1,381.00 Total – 1,438.37 265.00 2,137.52 – – 265.00 3,575.90 Refund of share application moneyEssar Logistics Limited – – – 2,287.80 – – – 2,287.80 Total – – – 2,287.80 – – – 2,287.80 Loans and advances receivedEssar Global Limited – 449.20 – – – – – 449.20 India Securities Limited – – – 150.00 – – – 150.00 Essar Investments Limited – – – 317.00 – – – 317.00 Total – 449.20 – 467.00 – – – 916.20 Guarantees given by others on
behalf of Company Essar Steel India Limited – – 2,500.00 – – – 2,500.00 – Total – – 2,500.00 – – – 2,500.00 –
THE DETAILS OF OUTSTANDING BALANCES AS ON MARCH 31, 2012 (Rs. in lakhs)
Nature of balances Holding company Other related parties Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Sundry debtorsArkay Holdings Limited – – 1.82 3,479.03 – – 1.82 3,479.03 Essar Steel India Limited – – 5,492.39 3,479.03 – – 5,492.39 3,479.03 Essar Oil Limited – – 4,534.42 3,882.98 – – 4,534.42 3,882.98 Essar Projects (India) Limited – – 6.77 – – – 6.77 – Essar Heavy Engineering Services Limited – – 7.56 7.52 – – 7.56 7.52 Essar Power Gujarat Limited – – 294.26 – – – 294.26 – Essar Logistics Limited – – 2,211.93 – – – 2,211.93 – Essar Shipping Limited – – 1,693.71 – – – 1,693.71 – Essar Shipping (Cyprus) Limited – – 27.78 – – – 27.78 – Essar Dredging Limited – – 0.99 – – – 0.99 –
117
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
THE DETAILS OF OUTSTANDING BALANCES AS ON MARCH 31, 2012 (Rs. in lakhs)
Nature of balances Holding company Other related parties Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Essar Offshore Subsea Limited – – 2.40 – – – 2.40 – Essar Africa Holdings Limited – – 798.04 – – – 798.04 – Total – – 15,072.07 10,848.56 – – 15,072.07 10,848.56 Retention moneyEssar Projects Management Consultants
Limited
– – 12.50 – – – 12.50 –
Total – – 12.50 – – – 12.50 – Capital advancesEssar Projects (India) Limited – – 11,081.57 16,850.97 – – 11,081.57 16,850.97 Essar Project Management Consultancy
Limited
– – 38.88 26.38 – – 38.88 26.38
Essar Logistics Limited – – – 485.00 – – – 485.00 Global Supplies FZE – – – 466.80 – – – 466.80 Total – – 11,120.45 17,829.14 – – 11,120.45 17,829.14 Loans and advances including accrued
interest and deposits givenEssar House Limited – – 56.00 – – – 56.00 – Essar Oil Limited – – 7,187.69 9,131.00 – – 7,187.69 9,131.00 Essar Engineering Services Limited – – 105.68 – – – 105.68 – Essar Infrastructure Services Limited – – 209.00 – – – 209.00 – Essar Investments Limited – – 589.98 – – – 589.98 – Essar Projects (India) Limited – – 1,349.54 3,106.27 – – 1,349.54 3,106.27 Essar Shipping Limited – – 452.76 – – – 452.76 – Essar Services India Limited – – 2.28 – – – 2.28 – The Mobile Store Limited – – 0.35 – – – 0.35 – Essar Agrotech Limited – – 0.74 – – – 0.74 – Total – – 9,954.02 12,237.27 – – 9,954.02 12,237.27
Loans and advances receivedEssar Steel India Limited – – – 10,000.00 – – – 10,000.00 Total – – – 10,000.00 – – – 10,000.00 Advance towards EquityEssar Logistics Limited – – – 2,287.80 – – – 2,287.80 Essar Steel India Limited – – – 1,741.70 – – – 1,741.70 Total – – – 4,029.50 – – – 4,029.50 Security deposit receivedEssar Oil Limited – – – 650.00 – – – 650.00 Total – – – 650.00 – – – 650.00 Investment in sharesBhander Power Limited – – 104.22 104.22 – – 104.22 104.22 Total – – 104.22 104.22 – – 104.22 104.22 Sundry creditorsAegis Limited – – 57.86 36.45 – – 57.86 36.45 Arkay Holdings Limited – – 117.59 0.58 – – 117.59 0.58 Bhander Power Limited – – 258.99 14.46 – – 258.99 14.46 Futura Travels Limited – – 135.70 30.87 – – 135.70 30.87 Essar Information Technology Limited – – 0.45 8.80 – – 0.45 8.80 Essar Oil Limited – – 2.02 150.67 – – 2.02 150.67 Essar Projects (India) Limited – – 24,852.21 4,259.67 – – 24,852.21 4,259.67 Essar Engineering Services Limited – – 3.97 309.96 – – 3.97 309.96 Essar Heavy Engineering Services Limited – – 2.70 – – – 2.70 – Essar Project Management Consultancy Limited – – 121.07 – – – 121.07 – Essar House Limited – – 49.67 – – – 49.67 – Essar House Services Limited – – 0.05 – – – 0.05 – Essar Logistics Limited – – 6,244.20 1,544.16 – – 6,244.20 1,544.16 Essar Energy Services Limited – – – 242.67 – – – 242.67 Essar Engineering Services Limited – – 0.07 242.67 – – 0.07 242.67 Essar Shipping Limited – – 1,436.07 4,671.00 – – 1,436.07 4,671.00 Global Supplies FZE – – 159.79 114.02 – – 159.79 114.02
118 Annual Report 2011-12118 Annual Report 2011-12
Notes forming part of financial statements
THE DETAILS OF OUTSTANDING BALANCES AS ON MARCH 31, 2012 (Rs. in lakhs)
Nature of balances Holding company Other related parties Key management
personnel
Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Essar Investments Limited – – 711.45 0.77 – – 711.45 0.77 Essar Infrastructure Services Limited – – 189.31 0.11 – – 189.31 0.11 Essar Steel India Limited – – 18,947.65 300.77 – – 18,947.65 300.77 Essar Services India Limited – – 177.70 – – – 177.70 – Essar Agrotech Limited – – 0.68 – – – 0.68 – Total – – 53,469.20 11,927.63 – – 53,469.20 11,927.63 Guarantee given on behalf of othersEssar Oil Limited – – 10,400.00 10,400.00 – – 10,400.00 10,400.00
Total – – 10,400.00 10,400.00 – – 10,400.00 10,400.00
Guarantee availed for loan takenEssar Oil Limited – – 20,000.00 20,000.00 – – 20,000.00 20,000.00 Essar Steel India Limited – – 2,500.00 – – – 2,500.00 – Essar Shipping & Logistics Limited 30,000.00 30,000.00 – – – – 30,000.00 30,000.00 Total 30,000.00 30,000.00 22,500.00 20,000.00 – – 52,500.00 50,000.00
37. STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated February 8, 2011 and
February 21, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies
Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has fulfilled the conditions stipulated
in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included
in the consolidated financial statements.
(Rs. in lakhs )
Sr.
No.
Particulars Vadinar Oil
Terminal
Limited
Essar Bulk
Terminal
Limited
Essar Bulk
Terminal
(Salaya)
Limited
Essar Bulk
Terminal
Paradip
Limited
Essar
Paradip
Terminals
Limited
Vadinar Port
& Terminals
Limited
1 Capital 104,614.20 26,150.00 20,807.85 11,605.00 905.00 27,013.45
2 Reserves (35,906.99) 18,636.39 (53.45) (26.88) (8.58) 3,811.85
3 Total assets 306,877.82 197,073.32 65,839.66 49,241.89 1,275.02 118,327.07
4 Total liabilities 238,170.60 152,286.93 45,085.27 37,663.77 378.60 87,501.77
5 Details of investments (except
investments in subsidiaries)
0.54 104.22 – – – –
6 Turnover 51,639.98 42,534.14 – – – 20,738.16
7 Profit / (loss) before taxation (17,994.27) 20,352.85 (36.77) (19.50) (3.28) 5,654.59
8 Provision for taxation (12,549.05) 4,471.42 – – – 1,834.63
9 Profit after taxation (7-8) (5,445.22) 15,881.43 (36.77) (19.50) (3.28) 3,819.95
10 Dividend paid Nil (2,094.84) Nil Nil Nil Nil
38. The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year
classification as per the requirement of the revised schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
Rajiv Agarwal Shailesh Sawa
Managing Director Director Finance
R. N. Bansal Manoj Contractor
Director Company Secretary
Mumbai
May 30, 2012
119VADINAR OIL TERMINAL LIMITED
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
BOARD OF DIRECTORS
Rajiv Agarwal
Director
K. K. Sinha
Director
R. N. Bansal
Director
Mr. Shailesh Sawa
Director
Mr. K.C. Jani
(Nominee – IDBI Ltd.)
Ms. Manju Jain
(Nominee – IFCI Ltd.)
Capt. Deepak Sachdeva
Executive Director
COMPANY SECRETARY
Habib Jan
VADINAR OIL TERMINAL LIMITED
REGISTERED OFFICE
Essar Refinery Site
39 K.M. Stone
Okha Highway (SH– 25)
Khambhalia
Gujarat 361305
AUDIT COMMITTEE
R. N. Bansal
K. C. Jani
Rajiv Agarwal
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi, Mumbai 400 034
120 Annual Report 2011-12
Directors’ Report
Dear Members,
Your Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Accounts of the
Company for the year ended March 31, 2012.
A. FINANCIAL RESULTS:
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Rs. in lakhs)
Particulars For the Year Ended For the Year Ended March 31, 2012 March 31, 2011
Total income 53,143.61 47,825.58
Total expenditure 9,443.85 10,999.65
Earnings before exceptional items, extraordinary items, interest, 43,699.76 36,825.93 tax, depreciation and amortisation
Less: Interest & finance charges 23,674.24 23,883.10
Less: Depreciation 14,468.61 14,219.02
Profit / (Loss) before exceptional and extraordinary items and tax 5,556.91 (1,276.19)
Extraordinary/ exceptional items 23,551.18 –
Loss before tax (17,994.27) (1,276.19)
Less : Deferred Tax credit (12,549.05) –
Profit / (Loss) after tax (5,445.22) (1,276.19
B. REVIEW OF OPERATIONS:
Your Directors are pleased to inform you that your Company has successfully completed yet another year of full-fledged operations. During the year under review, your Company handled the following throughput:
Cargo handled Quantity in MMT
Crude Handling 12.2
Product Handling 11.1
– Jetty 8.3
– Road 1.4
– Rail 1.1
– Pipeline 0.3
Intermediate Handling 3.1
Total 26.4
The Marine division handled 67 Crude Oil Tankers and evacuated 12.18 million metric tonne (MMT) of crude by using its Single Point Mooring facility. Approximately 8.29 MMT of petroleum products were despatched from the Jetty through 204
vessels. Rail, Road and Pipeline operations evacuated 2.8 MMT of products during the year.
C. ACHIEVEMENTS:
During the year under review, your Company has achieved the following:
D. AWARD AND CERTIFICATIONS:
Directors’ Report
121VADINAR OIL TERMINAL LIMITED
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ISO 9001:2008 Quality Management
ISO 14001:2004 Environment Manage-
ISO 28000:2007 Security Management
OCIMF Terminal Baseline Criteria Certifi-cation by ABS.
E. HUMAN RESOURCE:
Your Company has achieved Hewitt Employee
Engagement score of 81%.
F. HOLDING COMPANY:
The Holding Company of your Company is Essar
Ports Limited.
G. SUBSIDIARY COMPANY:
Vadinar Ports & Terminals Limited (VPTL) continues
to be the subsidiary of your Company.
H. FIXED DEPOSITS:
The Company has not accepted any fixed deposits
during the year under review.
I. DIRECTORS:
In accordance with the provisions of the Companies
Act, 1956 and the Articles of Association of the
Company, Mr. K. K. Sinha retires at the ensuing
Annual General Meeting of the Company and being
eligible, offers himself for re-appointment.
Capt. Deepak Sachdeva and Shri. Dipankar Pal
employment of the Company designated as Executive
Director and Managing Director respectively. Your
Company has received notices from members
proposing their names for the position of Directors.
J. AUDITORS:
Deloitte Haskins & Sells, Chartered Accountants,
Ahmedabad, who are the Statutory Auditors of
the Company hold office, in accordance with the
provisions of the Companies Act, 1956 upto the
conclusion of the forthcoming Annual General
Meeting and are eligible for re-appointment.
K. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPOTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
The provisions of Section 217(1)(e) of the Companies
Act, 1956 read with Companies (Disclosure of
Particulars in the Report of Board of Directors), Rules
1988, relating to Energy Conservation and Technology
Absorption are not applicable to your Company.
The foreign exchange earnings and outgo position is
as under:
Total foreign exchange:
(1) Outgo : Rs. 36.01 lakhs
(2) Earned : Nil
L. DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217(2AA) of
the Companies Act, 1956 the Board of Directors
hereby state that:
(a) in preparation of the annual accounts, the
applicable accounting standards have been
followed and there have been no material
(b) the Directors have selected such accounting
policies and applied them consistently and
made judgments and estimates that are
reasonable and prudent so as to give a true
and fair view of the state of affairs of the
(c) the Directors have taken proper and sufficient
care for the maintenance of adequate
accounting records in accordance with the
provisions of this Act for safeguarding the
assets of the Company and for preventing and
(d) the Directors have prepared the annual
accounts on a going concern basis.
M. PARTICULARS OF EMPLOYEES:
There are no employees of the Company who received
remuneration as prescribed under Section 217(2A) of
the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended.
N. ACKNOWLEDGEMENTS:
Your Directors thank the Financial Institutions and
Banks, Kandla Port Trust, Indian Coast Guards,
other business associates, shareholders and
employees for their continued support and co-
operation.
For and on behalf of the Board of Directors
Capt. Deepak Sachdeva Shailesh Sawa
Mumbai Executive Director Director
August 30, 2012
122 Annual Report 2011-12
Auditors’ Report
TO THE MEMBERS OF
VADINAR OIL TERMINAL LIMITED
VADINAR OIL TERMINAL LIMITED (the Company”) as
at 31st March, 2012, the Statement of Profit and Loss
and the Cash Flow Statement of the Company for
the year ended on that date, both annexed thereto.
These financial statements are the responsibility of
the Company’s Management. Our responsibility is
to express an opinion on these financial statements
based on our audit.
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free of material misstatements.
An audit includes examining, on a test basis, evidence
supporting the amounts and the disclosures in the
financial statements. An audit also includes assessing
the accounting principles used and the significant
estimates made by the Management, as well as
evaluating the overall financial statement presentation.
for our opinion.
3. Attention is invited to Note 5 (B) (d) of the financial
statements detailing the recognition and measurement
of the borrowings covered by the Corporate Debt
Restructuring Scheme (the CDR”) as per the
accounting policy consistently followed by the
Company in the absence of specific guidance available
under the accounting standards referred to in Section
211(3C) of the Companies Act, 1956. Our opinion is
not qualified in respect of this matter.
4. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central Government
in terms of Section 227(4A) of the Companies Act,
1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said
Order.
5. Read with our comments in paragraph 3 and the
Annexure referred to in paragraph 4 above, we report
as follows:
a) we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
b) in our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
c) the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by
this report are in agreement with the books of
d) in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
e) in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
i. in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
ii. in the case of the Statement of Profit and
Loss, of the loss of the Company for the
year ended on that date and
iii. in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
6. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken
on record by the Board of Directors, none of the
Directors is disqualified as on 31st March, 2012 from
being appointed as a director in terms of Section 274
(1) (g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 29, 2012
123VADINAR OIL TERMINAL LIMITED
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Referred to in paragraph 4 of our report of even date)
(i) Having regard to the nature of the Company’s business / activities / result, clauses (vi), (xii), (xiii), (xiv), (xvi), (xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) No fixed assets has been disposed of during the year, hence clause (i) (c) of the Order is not applicable to the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iv) In our opinion and according to the information and explanations given to us, The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Hence, the provisions of clause (iii) (b) to (iii) (g) of the Order are not applicable to the Company.
(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.
(vi) In our opinion and according to information and explanation given to us, there are no contracts or arrangements that need to entered into the register maintained in pursuance of Section 301 of the Companies Act, 1956.
(vii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.
maintained by the Company pursuant to the
Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records
a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Income-tax, Service Tax, Custom Duty, Cess and other material statutory dues applicable to it with the appropriate authorities, except in case of Professional tax and service tax where certain instances of delay have been observed. As informed to us, the provisions for Investment Education and Protection Fund, Employee’s State Insurance,
not applicable to the Company during the year.
(b) There were no undisputed amounts payable in respect of above statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable, except Professional tax dues of Rs.7,000.
(c) There were no due pending to be deposited on account of any dispute in respect of Income-tax, Service Tax, Custom Duty and Cess as on 31st March, 2012
(x) The accumulated losses of the Company at the end of the financial year are less than fifty percent of its net worth and the Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. The Company has not borrowed any sums through debentures.
(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.
( xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, the Company has not raised any funds on short term basis during the year.
(xiv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS Chartered Accountants
Khurshed Pastakia Partner
(Membership No. 31544)Mumbai May 29, 2012
Annexure to the Auditors’ Report
124 Annual Report 2011-12
Balance Sheet as at March 31,, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
(I) EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 104,614.20 104,614.20
(b) Reserves and surplus 4 (35,906.99) (30,461.77)
68,707.21 74,152.43
2 Non-current liabilities
(a) Long-term borrowings 5 222,373.33 203,898.48
(b) Long-term provisions 6 78.81 118.11
222,452.14 204,016.59
3 Current liabilities
(a) Trade payables 7 783.08 1,848.30
(b) Other current liabilities 8 14,933.83 14,169.33
(c) Short-term provisions 9 1.56 9.41
15,718.47 16,027.04
Total 306,877.82 294,196.06
(II) ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets 10A 236,126.23 242,805.52
(ii) Intangible assets 10B 3.14 5.23
(iii) Capital work-in-progress 11 33.00 269.01
(b) Non-current investments 12 19,148.00 19,148.00
(c) Deferred tax assets (net) 31 12,549.05 –
(c) Long-term loans and advances 13 17,877.78 9,810.20
(d) Other non-current assets 14 201.34 136.26
285,938.54 272,174.22
2 Current assets
(a) Current investments 15 0.54 –
(b) Inventories 16 544.90 2,123.44
(c) Trade receivables 17 8,662.69 3,882.98
(d) Cash and bank balance 18 186.76 3,872.92
(e) Short-term loans and advances 19 10,612.39 10,807.84
(f) Other current assets 20 932.00 1,334.66
20,939.28 22,021.84
Total 306,877.82 294,196.06
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants
Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa Partner Executive Director Director
Habib Jan Company Secretary
Mumbai Mumbai May 29, 2012 May 29, 2012
125VADINAR OIL TERMINAL LIMITED
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
(Rs. in lakhs)
Particulars Note For the year ended For the year ended
No. March 31, 2012 March 31, 2011
I. NET REVENUE FROM OPERATIONS 21 51,639.98 46,441.38
II. Other income 22 1,503.63 1,384.20
III. Total revenue (I + II) 53,143.61 47,825.58
IV. EXPENSES:
Operating expenses 23 8,438.41 9,541.53
Administrative, establishment and other expenses 24 749.04 357.91
Employee benefits expenses 25 256.40 1,100.21
Total 9,443.85 10,999.65
V. Earning before exceptional items, extraordinary items,
interest, tax, depreciation and amortisation (III– IV) 43,699.76 36,825.93
VI. Finance cost 26 23,674.24 23,883.10
VII. Depreciation and amortisation expenses 10 14,468.61 14,219.02
VIII. Profit / (Loss) before exceptional and extraordinary
items and tax (V – VI – VII) 5,556.91 (1,276.19)
IX. Extraordinary / exceptional items (refer note 5 (B) (d)) 23,551.18 –
X Loss before tax (VIII– IX) (17,994.27) (1,276.19)
XI Tax expenses:
(1) Current tax – –
(2) Deferred tax credit 31 (12,549.05) –
XII Profit / (loss) for the year (5,445.22) (1,276.19)
XIII Earnings per share of Rs.10/- each fully paid up (in Rs.)
Basic and diluted 32 (0.52) (0.12)
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa
Partner Executive Director Director
Habib Jan
Company Secretary
Mumbai Mumbai
May 29, 2012 May 29, 2012
Statement of Profit and Loss for the year ended March 31, 2012
126 Annual Report 2011-12
Notes forming part of financial statementsCash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
I) CASH FLOW FROM OPERATING ACTIVITIES
Net Profit / (Loss) before taxes, extraordinary and exceptional items 5,556.91 (1,276.19)
Adjustment for:
Depreciation and amortisation 14,468.61 14,219.02
Excess provision of earlier year written back (12.39) (80.61)
Interest and finance expenses 23,674.24 23,883.10
Interest income – inter corporate deposit (809.88) (984.92)
Profit from sale of mutual fund units (327.65) (77.00)
Interest income from fixed deposits (14.35) (37.66)
Cash flow from operation before changes in working capital 42,529.52 35,637.91
Adjustment for (increase) / decrease in operating assets :
Inventories (61.58) (1,511.67)
Trade receivable (4,779.71) 839.96
Loans and advances (11,600.16) (6,260.33)
Adjustment for increase / (decrease) in operating liabilities :
Trade payables (1,141.83) 297.23
Cash generated from operations 24,946.24 29,003.09
Income tax (paid) / refund 1,240.00 (1,226.85)
Net cash flow from operating activities (I) 26,186.24 27,776.25
II) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets (5,282.69) (117.80)
Interest received 977.45 1,226.10
Purchase of mutual fund units (43,000.00) (17,306.92)
Sale of mutual fund units 43,327.65 20,383.92
Investment in fixed deposit (65.08) (37.00)
Interest income from fixed deposits 11.47 37.96
Share application money received back 950.00 –
Repayment of loans given 1,776.00 1,537.18
Net cash from / (used in) investing activities (II) (1,305.21) 5,723.44
III) CASH FLOW FROM FINANCING ACTIVITIES
Interest and finance expenses paid (15,169.85) (19,106.46)
Repayment of term loans (13,396.81) (12,174.89)
Net cash used in financing activities (III) (28,566.66) (31,281.35)
127
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
Net (decrease) / increase in cash and cash equivalents (I+II+III) (3,685.62) 2,218.34
Cash and cash equivalents at the beginning of the year 3,872.92 1,654.59
Cash and cash equivalents at the end of the year ( refer note 1) 187.30 3,872.92
See accompanying notes forming part of the financial statements
NOTES
1. Reconciliation between closing cash and cash equivalents and
cash and bank balance
Closing cash and cash equivalents as per cash flow statement 187.30 3872.92
Less: mutual fund investments considered as cash
equivalents as per AS-3 (0.54) –
Closing cash and bank balance as per note no. 18 186.76 3872.92
2. Non cash transaction
During the year, the Company has converted inventory of
Rs. 1640.12 lakhs to capital assets.
3. Investment in units of mutual fund are considered as cash and
cash equivalents in the cash flow statement.
4. Cash flow statement has been prepared under the indirect
method as set out in the Accounting Standard 3 – "Cash Flow
Statement" referred to in Section 211 (3C) of the Companies Act, 1956.
See accompanying notes forming part of the financial statements.
Cash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Deepak Sachdeva Shailesh Sawa
Partner Executive Director Director
Habib Jan
Company Secretary
Mumbai Mumbai
May 29, 2012 May 29, 2012
128 Annual Report 2011-12
Notes forming part of financial statements
1 CORPORATE INFORMATION
Vadinar Oil Terminal Limited is a company incorporated
under the Companies Act, 1956 and subsidiary of Essar
Ports Limited. The Company has an integrated oil terminal
under the Kandla Port Trust (KPT) waters situated at
Vadinar, Gujarat. It currently has 58 MMTPA of capacity for
handling crude oil and petroleum products. The facilities
consist of an off-shore single point mooring (SPM), one
product berth, crude oil tanks, refined petroleum product
and intermediate tanks and rail and road gantries. These
facilities presently cater to Essar Oil Limited's Oil refinery.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Accounting
These financial statements are prepared under the
historical cost convention, on accrual basis of accounting,
and are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956.
2.2. Use of Estimates
The preparation of financial statements requires estimates
and assumptions to be made that affect the reported
amount of assets and liabilities on the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognised in the period in which the
results are known / materialised.
2.3 Revenue Recognition
Revenue on sale of products is recognised when the seller
has transferred to the buyer the property in the goods
for a price or when all significant risks and rewards of
ownership have been transferred to the buyer and the
seller retains no effective control of the goods transferred
to a degree usually associated with ownership and no
significant uncertainty exists regarding the amount of
consideration that will be derived from the sale of goods.
Revenue on transactions of rendering services is
recognised under the completed service contract method.
Performance is regarded as achieved when no significant
uncertainty exists regarding the amount of consideration
that will be derived from rendering the services.
2.4 Tangible Assets, Depreciation and Amortisation
Tangible assets are recorded at cost less accumulated
depreciation and impairment loss, if any. Cost is
inclusive of non-refundable duties and taxes, and cost
of construction including erection, installation and
commissioning expenses, borrowing costs, expenditure
during construction, inseparable know how costs, gains
or loss earned / incurred during the trial run and other
incidental costs, where applicable.
Depreciation on plant and machinery, buildings, pipelines
and tankages is provided as per straight line method at
the rates provided under Schedule XIV to the Companies
Act, 1956.
The assets to be handed over to Kandla Port Trust under
concession agreement are amortised over a period of
concession agreement of 30 years from 8 October 1997
or their useful life of assets (20 years, balance period of
concession from date of capitalisation of assets i.e. 1 July
2007) whichever is lower.
All other assets are depreciated under the written down
value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. Assets costing
less than Rs.5,000/- per item are depreciated at 100% in
the year of acquisition.
Depreciation on additions / deductions to fixed assets
made during the period is provided on a pro-rata basis
from / upto the date of such additions / deductions, as the
case may be.
2.5 Intangible Assets and Amortisation
Intangible assets are recognised only when it is probable
that the future economic benefits that are attributable
to the asset will flow to the Company and the cost of
the asset can be measured reliably. Intangible assets
are stated at cost less accumulated amortisation and
impairment loss, if any.
Intangible assets are amortised over the best estimate of
their useful lives, subject to a rebuttable presumption that
such useful lives will not exceed ten years.
2.6 Capital Work in Progress and Expenditure during
Constructions
Direct expenditure on projects or assets under
construction or development is shown under capital work–
in– progress.
Advances on capital account include progress / milestone
based payments made under the contracts for projects,
assets under construction and other capital advances until
the same are allocated to fixed assets and other accounts,
as applicable and the same is shown under long term
loans and advances.
2.7 Borrowing Cost
Borrowing costs that are directly attributable to the
acquisition, construction / development of qualifying asset
are amortised over the tenure of the loan and capitalised
as a part of cost of such asset till such time that the
of profit and loss thereafter. A qualifying asset is one that
necessary takes substantial period of time to get ready for
the intended use.
Costs in connection with the borrowing of funds to the
129
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
extent not directly related to the acquisition of fixed assets
are amortised and charged to the Statement of Profit and
Loss, over the tenure of the loan.
2.8 Foreign Currency Transactions
Transactions denominated in foreign currency are
accounted at the rate prevailing on the transaction
date. Monetary items denominated in foreign currency
are translated at the rate prevailing at the balance
sheet date. Gains / losses on conversion / translation /
settlement of foreign currency transactions are recognised
in the statement of profit and loss or expenditure during
construction, as applicable.
2.9 Taxes on Income
Current tax are provided as per the provisions of the
Income tax Act, 1961.
The tax effect of timing differences resulting between
taxable income and accounting income and are capable of
reversal in one or more subsequent periods are recorded
as a deferred tax asset or deferred tax liability. They are
measured using the substantively enacted tax rates and
tax regulations as at the balance sheet date.
Deferred tax assets arising on account of brought forward
losses and unabsorbed depreciation under tax laws are
recognised, only if there is virtual certainty of its realisation,
supported by convincing evidence. Deferred tax assets on
account of other timing differences are recognized only to
the extent there is reasonable certainty of its realisation.
2.10 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised in the accounts for present
obligations arising out of past events and would probably
require an outflow of economic resources, the amount of
which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or non
occurrence of one or more uncertain future events not
wholly within the control of the Company or a present
obligation that is not recognised because a reliable
estimate of the liability cannot be made or likelihood of an
outflow of resources is remote. Contingent assets are not
recognised or disclosed in the financial statements.
2.11 Impairment of Assets
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss
and is recognised in the statement of profit and loss. If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset
is reflected at the recoverable amount but limited to the
carrying amount that would have been determined (net of
depreciation / amortisation) had no impairment loss been
recognised in prior accounting periods.
2.12 Inventories
Stores and Spares: Valued at lower of cost and net
realisable value. Cost is determined on a moving weighted
average basis.
Net realisable value is the estimated current procurement
price in the ordinary course of the business.
2.13 Other Income
Interest income is accounted on accrual basis. Dividend
income is accounted for when the right to receive it is
established.
2.14 Investments
Long term investments are stated at cost. However, in
the opinion of management, when there is an other than
temporary decline in the value of long term investments
with reference to their fair / market value, the carrying
amount is reduced to recognise that decline. Current
investments are carried at lower of cost or market value.
2.15 Employee Benefits
(a) Contribution to recognised provident fund,
which is a fixed percentage of eligible
employees’ salary is charged to the statement
of profit and loss.
(b) The liability for gratuity is actuarially determined
at year end and funded to Life Insurance
Corporation of India to the extent demanded
by them and balance taken to provisions.
(c) The contribution towards superannuation,
funded by payment to Life Insurance
Corporation of India, is a fixed percentage
of the salary of eligible employees under a
defined contribution plan and is charged to
statement of profit and loss.
(d) Provision for all accumulated compensated
absences of eligible employees is based on an
independent actuarial valuation.
130 Annual Report 2011-12
Notes forming part of financial statements
3 SHARE CAPITAL
(a) Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
Authorised
Equity shares of Rs. 10/- each 4,000,000,000 400,000.00 4,000,000,000 400,000.00
4,000,000,000 400,000.00 4,000,000,000 400,000.00
Issued, subscribed and fully paid up
Equity shares of Rs. 10/- each 1,046,142,000 104,614.20 1,046,142,000 104,614.20
1,046,142,000 104,614.20 1,046,142,000 104,614.20
(b) Reconciliation of the shares outstanding
at the beginning and at the end of the
reporting period
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
a) Equity shares of Rs. 10/- each
At the beginning of the year 1,046,142,000 104,614.20 1,046,142,000 104,614.20
Add: Issue of shares – – – –
Outstanding at the end of the year 1,046,142,000 104,614.20 1,046,142,000 104,614.20
(c) Terms / rights attached to shares
The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the
shareholding more than 5% shares in the Company
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs % Number Rs. in lakhs %
a) Equity shares of Rs.10/-
each Essar Ports
Limited, the holding
company 1,046,142,000 104,614.20 100% 1,046,142,000 104,614.20 100%
1,046,142,000 104,614.20 100% 1,046,142,000 104,614.20 100%
4 RESERVE AND SURPLUS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Deficit of statement of profit and loss
Opening balance (30,461.77) (29,185.58)
Less : Loss for the year (5,445.22) (1,276.19)
Closing balance (35,906.99) (30,461.77)
131
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
5 LONG TERM BORROWINGS
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(A) Secured long term borrowings
(i) From Banks
(a) Rupee term loans 62,979.18 69,902.18 6,923.00 6,124.00
(b) Funded interest facilities:
(including funding of interest for the
period October 1998 to December
2003) : 112,225.40 95,126.47 1,795.83 1,561.07
Less:
Amount not payable if relevant funded
interest is paid on or before 31.03.2012 (41,528.20) (42,812.21) – –
Total Funded interest facilities from banks 70,697.20 52,314.26 1,795.83 1,561.07
Total secured borrowings from
banks (a + b) 133,676.38 122,216.44 8,718.83 7,685.07
(ii) From Financial Institutions
(a) Rupee term loans 46,429.47 51,638.97 5,209.50 5,436.00
(b) Funded interest facilities:
(including funding of interest for
the period October 1998 to
December 2003) : 66,875.26 55,425.92 280.79 275.74
Less:
Amount not payable if relevant funded
interest is paid on or before 31.03.2012 (24,607.78) (25,382.85) – –
Total Funded interest facilities from
Financials Institutions 42,267.48 30,043.07 280.79 275.74
Total secured borrowings from
financial institutions (a + b) 88,696.95 81,682.04 5,490.29 5,711.74
Less: Amount disclosed under the head
Other Current Liabilities” (Note 8) – – (14,209.12) (13,396.81)
Total long term borrowings (I + ii) 222,373.33 203,898.48 – –
(B) Notes:
(a) Term loans and funded interest facilities from banks and financial institutions (other than (b) below) are
secured / to be secured by first ranking security interests on all movable and immovable assets, present and
future, pledge of shares of the Company held by the promoters and persons associated with the promoters/
Company, security interest on rights, titles and interests under each of the project documents, trust and
retention accounts / sub-accounts, insurance policies related to the terminal project, immovable properties
of Essar Oil Ltd (EOL) pertaining to terminal project, guarantee by the promoters and guarantee of holding
company for Rs. 25,000 lakhs (previous year Rs. 25,000 lakhs) and pledge of shares of the Company held by
the holding company.
(b) The facilities provided by a financial institution upto Rs. 20,000 lakhs (previous year Rs. 20,000 lakhs) and
interest and other charges thereon are secured by a guarantee of EOL for Rs. 20,000 lakhs. To secure obligation
of EOL pursuant to the said guarantee, security is created by first mortgage and charge on immovable and
movable properties pertaining to the EOL refinery project, pledge over shares of EOL and an assignment of the
project contracts relating to EOL refinery project, the trust and retention accounts pertaining thereto.
132 Annual Report 2011-12
Notes forming part of financial statements
(c) Secured Master Restructuring Agreement (MRA) Rupee Term loan (including funded interest) from bank
carrying average interest cost of 10% to 11.50% per annum with quarterly installments payment upto June
2027.
(d) Recognition of Facility Stoppage and Facility E
The Master Restructuring Agreement (‘MRA’) dated 17 December 2004 entered pursuant to Corporate Debt
Restructuring Scheme, gives an option, subject to consent of its lenders, to the Company to prepay funded
interest loans (FS loan) of Rs. 86,908.16 lakhs (previous year Rs. 86,908.16 lakhs) at any point of time
during their term at a reduced amount computed in accordance with mechanism provided in the MRA or in
full, by one bullet payment in March, 2026. Interest on FS loan was not payable if FS loan was prepaid by
24 April 2012 and therefore considering the plans to prepay FS loan, interest liability on FS loan (Facility E)
was earlier considered as contingent liability and now recognised as loan as the same is funded.
In order to reflect the substance of the above, in terms of presentation in the balance sheet, an amount of
Rs. 66,135.98 lakhs (previous year Rs. 68,195.06 lakhs) being the amount not payable as at balance sheet
date has been presented as deduction from funded interest facilities under secured loans / borrowings to
reflect the present obligation on the balance sheet date. The changes in the present obligation of the said
FS loan subsequent to capitalisation of the Terminal Project till each reporting date is treated as a finance
cost item in the statement of profit and loss.
Facility E of Rs 24,179.58 lakhs is presented in the balance sheet under funded Interest facilities from banks
and financial institutions under long term borrowings, with corresponding recognition of Rs 807.34 lakhs,
being interest attributable to construction period, being added to fixed assets and balance as exceptional
Item in the statement of profit and loss.
6 LONG TERM PROVISIONS
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Provision for employee benefits (refer note 37 (C))
(i) Provision for compensate absences 72.09 96.66 1.56 9.41
(ii) Provision for gratuity (refer note 37 (C)) 6.72 21.45 – –
Total 78.81 118.11 1.56 9.41
Less: Amount disclosed under the head
short term provisions” (refer note 9) – – (1.56) (9.41)
Total long term provisions 78.81 118.11 – –
7 TRADE PAYABLES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Trade payable (refer note 33) 783.08 1,848.30
Total 783.08 1,848.30
133
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
8 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Current maturities of long term borrowings (refer note 5 (a), (b), (c)
for details of security, interest and guarantee) 14,209.12 13,396.81
Interest Accrued but not Due on Borrowings 208.58 239.36
Payable for Capital Expense (refer note 33) 418.80 310.47
Other Liabilities (Including Statutory dues for Tax deducted at Source,
Provident Fund and dues to employees) 97.33 222.69
Total 14,933.83 14,169.33
9 SHORT TERM PROVISIONS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Provision for employee benefits (refer note 6)
Provision for compensated absences 1.56 9.41
Total 1.56 9.41
134 Annual Report 2011-12
Notes forming part of financial statements
10
FIX
ED
AS
SE
TS
(Rs.
in lakhs)
Sr.
D
escrip
tion o
f A
sset
As a
t A
dd
itio
ns
Dis
po-
As a
t A
s a
t For
the
Dis
po
- A
s a
t A
s a
t A
s a
t
No.
01 A
pril
during
sals
/
Marc
h 3
1,
01 A
pril
year
sals
/
Marc
h 3
1,
Marc
h 3
1,
Marc
h 3
1,
2011
the y
ear
sale
s
2012
2011
sale
s
20
12
2
01
2
20
11
(A)
Tan
gib
le A
ssets
1
Land
4
.52
–
–
4.5
2
–
–
–
–
4.5
2
4.5
2
2
Build
ings
6,3
89.0
1
85.3
5
–
6,4
74.3
6
757.6
7
214.5
7
–
97
2.2
4
5,5
02
.12
5
,63
1.3
4
3
Pla
nt
& E
quip
ments
(refe
r note
s b
elo
w)
286,6
46.7
1
7,8
78.5
2
–
294,5
25.2
3
49,6
19.4
3
14,3
94.7
3
– 6
4,0
14
.16
2
30
,51
1.0
7
23
7,0
27
.28
4
Furn
iture
& F
ixtu
res
147.6
1
–
–
147.6
1
55.0
0
16.3
2
–
71
.32
7
6.2
9
92
.61
5
Offi
ce E
quip
ments
1
03.9
0
2.2
9
–
106.1
9
54.1
3
19.8
3
–
73
.96
3
2.2
3
49
.77
Sub
-tota
l (A
) 2
93,2
91.7
5
7,9
66.1
6
–
301,2
57.9
1
50,4
86.2
3
14,6
45.4
5
– 6
5,1
31
.68
2
36
,12
6.2
3
24
2,8
05
.52
(B)
Inta
ng
ible
Assets
1
Com
pute
r softw
are
1
4.5
9
–
–
14.5
9
9.3
6
2.0
9
–
11
.45
3
.14
5
.23
Sub
-Tota
l (B
) 1
4.5
9
–
–
14.5
9
9.3
6
2.0
9
–
11
.45
3
.14
5
.23
Tota
l (A
+ B
) 2
93,3
06.3
4
7,9
66.1
6
–
301,2
72.5
0
50,4
95.5
9
14,6
47.5
4
– 6
5,1
43
.13
2
36
,12
9.3
7
24
2,8
10
.75
Pre
vious Y
ear
Fig
ure
2
90,8
60.3
8
2,4
45.9
6
–
293,3
06.3
4
36,2
76.5
7
14,2
19.0
2
– 5
0,4
95
.59
2
42
,81
0.7
5
No
tes
1
Ad
ditio
ns t
o P
lant
and
Machin
ery
inclu
de R
s.
807.3
4 l
akhs d
ue t
o c
ap
italis
ation o
f in
tere
st
on f
acility
sto
pp
ag
e f
rom
Ap
ril
24
, 2
00
7 t
o J
une 3
0,
20
07
.
[refe
r note
: 5(B
)(d
)]
2
Part
icula
r R
s.
in lakhs
D
ep
recia
tion f
or
the y
ear
as a
bove
1
4,6
47.5
4
Less :
Dep
recia
tion o
n 1
ab
ove
consid
ere
d a
s e
xcep
tional item
(
178.9
3)
D
ep
recia
tion a
s p
er
sta
tem
ent
of
pro
fit a
nd
loss
14,4
68.6
1
135
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
11 CAPITAL WORK-IN-PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Capital work-in-progress 33.00 269.01
Total 33.00 269.01
12 NON CURRENT INVESTMENT
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Investment (at cost)
Unquoted:
(i) Traded:
Investment in subsidiary:
19,14,80,000 (P.Y. 19,14,80,000) equity shares of Rs. 10/- each
fully paid up of Vadinar Ports & Terminals Ltd. 19,148.00 19,148.00
Total 19,148.00 19,148.00
13 LONG TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Unsecured Considered Good
(A) Security deposit 216.00 150.00 – –
(B) Loans & advances to related parties
(refer note 38) 4,571.12 6,955.49 2,675.30 2,768.27
(C) Advance for expenses to related parties
(refer note 38) 12,399.89 2,375.33 2,951.09 2,627.46
(D) Other loans & advances
Prepaid expense 690.77 329.38 1,802.35 548.56
Total 17,877.78 9,810.20 7,428.73 5,944.28
Less: Amount disclosed under the head
short term loans and advances” (refer note 19) – – (7,428.73) (5,944.28)
Total long term loans and advances 17,877.78 9,810.20 – –
136 Annual Report 2011-12
Notes forming part of financial statements
14 OTHER NON CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Balance with Banks:
(i) Margin money
– In Time Deposits (lien marked against guarantee) 102.08 37.00
(ii) Deposits in escrow account** 99.26 99.26
Total 201.34 136.26
** As per the requirement of master restructuring agreement for secured term loans, there is restrictions on
operation of escrow account by the company.
15 CURRENT INVESTMENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Current investment – unquoted – at cost
Investments in mutual funds units 0.54 –
Total 0.54 –
Note:
Current investment in mutual fund units is in nature of cash and cash equivalent” (as defined in as 3 cash flow
statements) considered as part of cash and cash equivalent in the cash flow statement.
16 INVENTORIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Stores & spares (valued at lower of cost or net realisable value) 544.90 2,123.44
Total 544.90 2,123.44
17 TRADE RECEIVABLES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(a) Outstanding for more than six months from its due date 2,139.58 –
(b) Others 6,523.11 3,882.98
Total 8,662.69 3,882.98
137
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
18 CASH AND BANK BALANCE
(Rs. in lakhs)
Current portion
Particulars As at As at
March 31, 2012 March 31, 2011
Cash and cash equivalent
(i) Cash on hand – 0.08
(ii) in Current accounts 186.76 3,872.84
Total 186.76 3,872.92
19 SHORT TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Loans & advances to related parties (refer note 13) 2,675.30 2,768.27
(B) Advance for expenses to related parties (refer note 13) 2,951.09 2,627.46
(C) Other loans and advances
(i) Advances to vendor 393.45 1,067.90
(ii) Balance with excise department 400.75 168.96
(iii) Advance income tax (net of provision) 2,385.86 3,625.86
(iv) Other advance 3.59 0.84
(v) Prepaid expense (refer note 13) 1,802.35 548.56
Total 10,612.39 10,807.84
20 OTHER CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Income receivable 198.59 174.18
(B) Interest accrued on loans and advances given to related parties 167.60 205.86
(C) Interest accrued on bank deposits 4.63 1.76
(D) Share application money – 950.00
(E) Others receivable 561.18 2.86
Total 932.00 1,334.66
138 Annual Report 2011-12
Notes forming part of financial statements
21 REVENUE FROM OPERATIONS
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Sale of services (refer note (i) below) 47,948.98 46,441.38
(B) Other operating income (refer note (ii) below) 3,691.00 –
Total 51,639.98 46,441.38
Notes:
(i) Sale of services comprises:
– Crude and petroleum product storage service 34,625.73 –
– Crude and petroleum product handling services 10,556.61 43,648.19
Total 47,948.98 46,441.38
(ii) Other Operating Income
– Technical and facility sharing service income 3,691.00 –
Total 3,691.00 –
Total (i) + (ii) 51,639.98 46,441.38
22 OTHER INCOME
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Interest income – inter corporate deposits 809.88 984.92
(B) Interest income – from banks 14.35 37.66
(C) Interest on income tax refund 181.36 174.18
(D) Profit on sale of mutual fund units (net) 327.65 77.00
(E) Other non-operative Income – 1.63
(F) Excess provision written back 12.39 80.61
(G) Foreign exchange variation gain 5.97 28.20
(H) Insurance claim 152.03 –
Total 1,503.63 1,384.20
139
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
23 OPERATING EXPENSES
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(B) Hire charges 1,130.93 1,856.03
(C) Lease rent 1,374.12 1,366.42
(D) Operation and maintenance service expense 1,343.13 1,453.15
(E) Consumption of stores and spares 208.65 241.46
(F) Manning – management expense 632.89 1,023.06
(G) Repairs & maintenance 152.62 57.06
(H) Power & fuels 127.59 137.76
(I) Insurance expense 676.47 565.44
(J) Other operating expense 25.38 47.95
Total 8,438.41 9,541.53
24 ADMINISTRATIVE, ESTABLISHMENT AND OTHER EXPENSE
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Remuneration to the statutory auditors:
(i) Auditor 12.50 13.95
(ii) Other Assurance services 16.31 29.40
(iii) Reimbursement of expenses 1.05 0.70
(B) Consultancy and professional charges 446.24 104.32
(C) Travelling expense 129.34 93.67
(D) Communication expense 17.14 42.03
(E) Office rent expense 53.03 –
(F) Rates & taxes 24.22 28.36
(G) Other expense 49.21 45.48
Total 749.04 357.91
25 EMPLOYEE BENEFIT EXPENSE
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Salaries, wages and allowances 242.79 1,031.56
(B) Contribution to provident fund and other funds (refer note 37 ) 10.97 64.91
(C) Staff welfare expense 2.64 3.74
Total 256.40 1,100.21
140 Annual Report 2011-12
Notes forming part of financial statements
26 FINANCE COST
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Interest expense 23,652.11 23,874.01
(B) Other borrowing cost 22.13 9.09
Total 23,674.24 23,883.10
27 COMMITTED LIABILITY FOR FUTURE LEASE PAYMENT
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Payable not later than 1 year 308.88 218.36
(B) Payable later than 1 year and not later than 5 years 1,208.30 873.43
(C) Payable later than 5 years 5,063.12 5,230.58
Total 6,580.30 6,322.37
28 CONTINGENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Guarantee given by company on behalf of others 10,400.00 10,400.00
(B) Claims against the company not acknowledged as debt 243.74 1,024.59
(C) Interest on facility E on principal amount of facility stoppage
as per master restructuring agreement [refer note 5 (B) (d)] – 18,780.22
(D) Estimated amount of contracts remaining to be executed on
capital account and not provided for 35.88 –
Total 10,679.62 30,204.81
29 CIF VALUE OF IMPORTS (INCLUDING GOODS IN TRANSIT)
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Capital goods 9.92 34.69
(B) Components and spares parts 78.83 1,521.63
Total 88.74 1,556.33
141
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
30 EXPENDITURE IN FOREIGN CURRENCY
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Traveling expense 8.40 28.78
(B) Repairs and maintenance – 55.27
(C) Insurance expense 23.87 31.83
(D) Agency charges 3.20 –
(E) Fees and subscriptions 0.54 –
Total 36.01 115.88
31 DEFERRED TAX
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
Deferred tax liability
Depreciation of fixed assets (timing difference) 20,291.10 14,975.02
(A) 20,291.10 14,975.02
Deferred tax assets
On unabsorbed depreciation 32,840.15 14,975.02
(B) 32,840.15 14,975.02
Net deferred tax asset [ (B) – (A) ] 12,549.05 –
The Company has recognized net deferred tax asset of Rs. 12,549.05 lakhs on unabsorbed depreciation on the
basis of estimate of contracted revenue for the period for which agreement has been entered into by it.
32 EARNINGS PER SHARE
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
Net (loss) for the year (5,445.22) (1,276.19)
Number of equity share at the beginning and end of the year 1,046,142,000 1,046,142,000
Face value per share (in Rs.) 10.00 10.00
Basic and diluted earnings earning per share – (in Rs.) (0.52) (0.12)
33 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT :
The Company has received intimations from certain suppliers regarding status under micro, small and medium
unpaid at the end of the accounting year in respect of such suppliers.
34 SEGNMENTAL REPORTING :
The Company operates in only one business segment of ports and terminals business and only one geographical
segment i.e. India.
142 Annual Report 2011-12
Notes forming part of financial statements
35 EXPOSURE IN FOREIGN CURRENCY
The Company has not entered into any forward / option exchange contract to hedge its foreign currency exposure.
The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are
given below:
Amount payable / receivable on account of foreign currency :
Amount Rs. in lakhs Amount in Foreign Currency in lakhs
Particulars As at As at As at As at
March 31, March 31, Currency March 31, March 31,
2012 2011 2012 2011
– 66.13 GBP – 0.84
– 2.74 SGD – 0.08
Total – 121.93 – – 1.77
36 CONSUMPTIONS OF IMPORTED AND INDIGENOUS SPARES PARTS
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Rs. in lakhs % Rs. in lakhs %
Imported 100.39 48.11 231.54 16.95
Indigenous 108.26 51.89 1,134.88 83.05
Total 208.65 100.00 1,366.42 100.00
37 EMPOYEE BENEFITS :
The Company has various employee benefits as under:
I. Defined contribution plans
a. Provident fund
b. Superannuation fund
During the year, the Company has recognised the following amounts in the statement of profit and loss:
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(i) Employer’s contribution to provident fund 21.80 60.95
(ii) Employer’s contribution to superannuation fund 0.31 5.08
Total 22.11 66.03
The above amounts are included in contribution to staff provident and other funds. (refer note 25 (b) )
II. Defined benefit plans
a. Contribution to gratuity fund
b. Provision for compensated absences (CA)
143
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
In accordance with Accounting Standard-15 (Revised 2005), relevant disclosures are as under:
(A) Changes in present value of defined benefit obligation
(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
As at As at As at As at March 31, March 31, March 31, March 31, 2012 2011 2012 2011
(i) Present value of defined benefit obligation at the beginning of the year 64.85 34.64 58.32 70.05
(ii) Current service cost 15.40 14.09 16.39 1.10
(iii) Interest cost 5.12 2.48 4.56 2.52
(iv) Plan amendments – 11.11 – –
(v) Acquisitions / (transfers) (17.73) – (15.41) (34.04)
(vi) Benefits paid (1.69) (5.77) (2.64) (7.43)
(vii) Actuarial (gain) / loss on obligations (35.23) 8.30 (35.34) 26.12
Present value of defined benefit obligation at the end of the year 30.72 64.85 25.88 58.32
(B) Changes in the fair value of plan assets(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
As at As at As at As at March 31, March 31, March 31, March 31, 2012 2011 2012 2011
(i) Fair value of plan assets at the beginning of the year 42.67 97.57 – –
(ii) Acquisition adjustment / transfer In / (transfer out) (21.88) (61.87) – –
(iii) Expected return on plan assets 3.56 8.49 – –
(iv) Actuarial gains / (losses) 1.33 (6.17) – –
(v) Contributions by the employer – 10.42 – (7.43)
(vi) Benefits paid (1.69) (5.77) – –
Fair value of plan assets at the end of the year 23.99 42.67 – (7.43)
(C) Amount recognised in the Balance Sheet(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
As at As at As at As at March 31, March 31, March 31, March 31, 2012 2011 2012 2011
(i) Present value of defined benefit obligation at the end of the year 30.72 64.85 25.88 58.32
(ii) Fair value of plan assets at the end of the year 24.00 42.67 – –
(iii) Funded status Surplus / (deficit) (6.72) (22.18) (25.88) (58.32)
(Liability) / asset recognised in the balance sheet (6.72) (21.45) (25.88) (58.32) (refer note 7 – long term provisions)
144 Annual Report 2011-12
Notes forming part of financial statements
(D) Expenses recognised in the Statement of Profit and Loss
(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
As at As at As at As at March 31, March 31, March 31, March 31, 2012 2011 2012 2011
(i) Current service cost 15.40 14.10 16.40 1.09
(ii) Interest cost 5.13 2.48 4.56 2.52
(iii) Expected return on plan assets (3.56) (8.49) – –
(iv) Past service costs 0.73 10.38 – –
(v) Net actuarial (gain) / loss recognised
in the period (36.57) 14.46 (35.34) 26.12
Total expenses recognised in the
statement of profit and loss (18.87) 32.93 (14.38) 29.73
Included in contribution to provident
and other funds (refer note 25 –
employee benefit expense)
(E) Category of plan assets
The Company’s plan assets in respect of gratuity are funded through the group schemes of the Life
Insurance Corporation of India.
(F) Experience History
Gratuity:
(Rs. in lakhs)
Particulars As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31,
2012 2011 2010 2009 2008
(i) Defined benefit obligation (30.72) (64.85) (34.64) (25.16) N.A.
(ii) Plan assets at the end
of the period 24.00 42.67 97.57 62.84 N.A.
(iii) Funded status (6.72) (22.18) 62.93 37.68 N.A.
(iv) Experience gain / (loss)
adjustments on plan liabilities 33.66 (9.37) 1.19 15.11 N.A.
(v) Experience gain / (loss)
adjustments on plan assets 1.33 (6.17) (9.39) 0.17 N.A.
(vi) Actuarial gain / (loss) due to
change on assumptions 1.57 1.07 (3.51) – N.A.
145
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
Compensated Absences:(Rs. in lakhs)
Particulars As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31,
2012 2011 2010 2009 2008
(i) Defined benefit obligation (25.88) (58.32) (70.05) (51.27) N.A.
(ii) Plan assets at the end of
the period – – – – N.A.
(iii) Funded status (25.88) (58.32) (70.05) (51.27) N.A.
(iv) Experience gain / (loss)
adjustments on plan liabilities 33.92 (27.17) 24.19 – N.A.
(v) Experience gain / (loss)
adjustments on plan assets – – – – N.A.
(vi) Actuarial gain / (loss) due to
change on assumptions 1.42 1.06 (8.00) – N.A.
(G) Actuarial assumptions
In accordance with Accounting Standard (AS) 15 (Revised 2005), actuarial valuation as at the year-end was
done in respect of aforesaid defined benefit plans based on the following assumptions:
i) General Assumption(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
For the year For the year For the year For the year
ended ended ended ended
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%
(ii) Rate of return on plan assets
(for funded scheme) 8.50% 8.50% N.A. N.A
(iii) Expected retirement age of
employees (years) 58 58 58 58
(v) Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%
ii) Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality table.
iii) Leave Policy
a) Leave balance as at the valuation date and each subsequent year following the valuation date to the
extent not availed by the employee (maximum to the extent of 120 days) is available for encashment on
separation from the Company.
b) As this is the fourth year of implementation of Accounting Standard (AS 15) (Revised 2005), only
corresponding previous three years figures have been furnished.
146 Annual Report 2011-12
Notes forming part of financial statements
38 RELATED PARY TRANSACTIONS :
A Holding Company
Essar Global Limited, Cayman Island, (ultimate holding company)
Essar Shipping & Logistics Limited, Cyprus, (intermediate holding company)
Essar Ports Limited, (immediate holding Company since 30 September 2010) (formerly known as Essar Shipping
Ports & Logistics Limited)
Essar Ports & Terminals Limited (immediate holding company till 30 September,2010)
B Subsidiary company
Vadinar Ports & Terminals Limited
C Other related parties / affiliated where there have been transactions
Aegis Limited
Arkay Holdings Limited
Essar Agrotech Limited
Essar Bulk Terminal (Salaya) Limited
Essar Bulk Terminal Limited
Essar Bulk Terminal Paradip Limited
Essar Energy Services Limited
Essar Engineering Services Limited
Essar House Limited
Essar Information Technology Limited
Essar Infrastructure Services Limited
Essar Investments Limited
Essar Logistics Limited
Essar Oil Limited
Essar Paradip Terminals Limited
Essar Projects (India) Limited
Essar Shipping Limited
Futura Travels Limited
Global Supply FZE
Essar Constructions (India) Limited
Essar Services India Limited
D Key Management Personnel
Capt. Deepak Sachdeva – Executive Director – (w.e.f. 18.10.2011)
147
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
(Rs. in lakhs)
Nature of Transaction Holding companies Other related Key management
and subsidiary company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
INCOME
Port and terminal and technical service income
Essar Oil Limited – – 47,948.98 46,441.38 – – 47,948.98 46,441.38
Technical service income / administrative charges recovered
Essar Bulk Terminal (Salaya) Limited – – – 759.42 – – – 759.42
Essar Bulk Terminal Paradip Limited – – – 403.12 – – – 403.12
Essar Bulk Terminal Limited – – – 502.57 – – – 502.57
Essar Paradip Terminals Limited – – – 200.85 – – – 200.85
Vadinar Ports & Terminals Limited – 840.66 – – – – – 840.66
Sub Total – 840.66 – 1,865.96 – – – 2,706.62
Lease income
Vadinar Ports & Terminals Limited – 0.83 – – – – – 0.83
Facility usage income
Vadinar Ports & Terminals Limited 3,650.00 – – – – – 3,650.00 –
O & M and technical services recovered
Vadinar Ports & Terminals Limited 955.08 – – – – – 955.08 –
Inter corporate deposit-(I.C.D.) interest income
Essar Oil Limited – – 809.88 984.92 – – 809.88 984.92
Miscellaneous income
Essar Shipping Limited – – 1.92 – – – 1.92 –
EXPENSES
Rent / lease charges
Essar Oil Limited – – 25.09 25.09 – – 25.09 25.09
Essar House Limited – – 11.04 99.75 – – 11.04 99.75
Essar Infrastructure Services Limited – – 41.85 327.94 – – 41.85 327.94
Vadinar Ports & Terminals Limited 1,213.09 1,326.57 – – – – 1,213.09 1,326.57
Sub Total 1,213.09 1,326.57 77.98 452.78 – – 1,291.07 1,779.35
Operational & maintenance charges
Essar Oil Limited – – 2,023.61 1,399.27 – – 2,023.61 1,399.27
Hire charges
Essar Ports Limited * 1,086.30 1,806.75 – – – – 1,086.30 1,806.75
Reimbursement of expense
Essar Oil Limited – – – 473.97 – – – 473.97
Essar Ports Limited * 221.67 32.50 – – – – 221.67 32.50
Essar Bulk Terminal Limited – – 16.07 – – – 16.07 –
Sub Total 221.67 32.50 16.07 473.97 – – 237.74 506.47
Professional charges / manning expense
Essar Oil Limited – – 614.16 722.99 – – 614.16 722.99
Essar Energy Services Limited – – 283.21 324.24 – – 283.21 324.24
Essar Engineering Services Limited – – 40.51 28.68 – – 40.51 28.68
Essar Information Technology Limited – – 3.05 51.09 – – 3.05 51.09
Essar Investments Limited – – 120.01 1,630.00 – – 120.01 1,630.00
Essar Ports Limited * 102.00 – – – – – 102.00 –
Essar Services India Limited – – 1.08 – – – 1.08 –
Aegis Limited – – 38.56 40.94 – – 38.56 40.94
Sub Total 102.00 – 1,100.58 2,797.94 – – 1,202.57 2,797.94
* formerly known as Essar Shipping Ports & Logistics Limited
148 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding companies Other related Key management
and subsidiary company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Travelling expenses
Futura Travels Limited – – 85.76 254.51 – – 85.76 254.51
Freight expense
Essar Logistics Limited – – 19.57 11.97 – – 19.57 11.97
Purchase of fixed assets / CWIP
Arkay Holdings Limited – – 33.00 – – – 33.00 –
Essar Constructions (India) Limited – – 435.54 13.16 – – 435.54 13.16
Vadinar Ports & Terminals Limited 3,358.44 – – – – – 3,358.44 –
Sub Total 3,358.44 – 468.54 13.16 – – 3,826.98 13.16
Deposit given
Essar Ports Limited * – 150.00 – – – – – 150.00
Essar House Limited – – 14.00 – – – 14.00 –
Essar Infrastructure Services Limited – – 52.00 – – – 52.00 –
Sub Total – 150.00 66.00 – – – 66.00 150.00
Loans / advances given
Essar Ports Limited * 10,696.63 2,589.36 – – – – 10,696.63 2,589.36
Vadinar Ports & Terminals Limited – 1,121.21 – – – – – 1,121.21
Sub Total 10,696.63 3,710.57 – – – – 10,696.63 3,710.57
Refund of share application money
Vadinar Ports & Terminals Limited 950.00 – – – – – 950.00 –
Remuneration
Mr. K. K. Sinha – – – – 58.08 116.34 58.08 116.34
Capt. Deepak Sachdeva – – – – 17.66 – 17.66 –
Sub Total – – – – 75.74 116.34 75.74 116.34
Outstanding as on March 31, 2012
Trade receivable
Essar Oil Limited – – 3,542.39 3,882.98 – – 3,542.39 3,882.98
Vadinar Ports & Terminals Limited 5,071.11 – – – – – – –
Sub Total 5,071.11 – 3,542.39 3,882.98 – – 3,542.39 3,882.98
Loans & advances including deposits given
Essar Oil Limited – – 7,019.81 8,925.14 – – 7,019.81 8,925.14
Essar Paradip Terminals Limited – – 180.77 180.77 – – 180.77 180.77
Essar Investments Limited – – 37.47 18.80 – – 37.47 18.80
Essar Bulk Terminal (Salaya) Limited – – 3.31 220.00 – – 3.31 220.00
Essar Bulk Terminal Limited – – 0.00 279.04 – – 0.00 279.04
Essar Shipping Limited – – 2.76 – – – 2.76 –
Essar Services India Limited – – 2.28 – – – 2.28 –
Essar Bulk Terminal Paradip Limited – – – 100.01 – – – 100.01
Sub Total – – 7,246.39 9,723.76 – – 7,246.39 9,723.76
Accrued interest receivable
Essar Oil Limited – – 167.61 205.86 – – 167.61 205.86
Advances
Vadinar Ports & Terminals Limited 1,910.84 1,584.36 – – – – 1,910.84 1,584.36
Essar Ports Limited * 13,440.13 3,418.42 – – – – 13,440.13 3,418.42
Sub Total 15,350.97 5,002.78 – – – – 15,350.97 5,002.78
* formerly known as Essar Shipping Ports & Logistics Limited
149
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR OIL TERMINAL LIMITED
(Rs. in lakhs)
Nature of Transaction Holding companies Other related Key management
and subsidiary company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Deposit given
Essar House Limited – – 14.00 – – – 14.00 –
Essar Infrastructure Services Limited – – 52.00 – – – 52.00 –
Essar Shipping Limited – – 150.00 150.00 – – 150.00 150.00
Sub Total – – 216.00 150.00 – – 216.00 150.00
Outstanding as on March 31, 2012
Trade and other payable
Aegis Limited – – 8.16 18.20 – – 8.16 18.20
Futura Travels Limited – – 20.20 25.42 – – 20.20 25.42
Essar Projects (India) Limited – – 321.42 268.61 – – 321.42 268.61
Essar House Limited – – 0.92 – – – 0.92 –
Essar Infrastructure Services Limited – – 4.43 – – – 4.43 –
Essar Logistics Limited – – 1.44 78.10 – – 1.44 78.10
Essar Engineering Services Limited – – 0.07 – – – 0.07 –
Essar Energy Services Limited – – – 242.67 – – – 242.67
Global Supply FZE – – 114.02 114.02 – – 114.02 114.02
Essar Investments Limited – – – 0.01 – – – 0.01
Essar Agrotech Limited – – 0.68 – – – 0.68 –
Essar Information Technology Limited – – – 8.80 – – – 8.80
Sub Total – – 471.34 755.83 – – 471.34 755.83
Advance towards allotment of shares
Vadinar Ports & Terminals Limited – 950.00 – – – – – 950.00
Guarantees given on behalf of others
Essar Oil Limited – – 10,400.00 10,400.00 – – 10,400.00 10,400.00
Guarantees given by others on behalf of Company
Essar Oil Limited – – 20,000.00 20,000.00 – – 20,000.00 20,000.00
Essar Ports Limited * 25,000.00 25,000.00 – – – – 25,000.00 25,000.00
* formerly known as Essar Shipping Ports & Logistics Limited
NOTE: 39
The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification as per the
requirement of the revised schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
Capt. Deepak Sachdeva Shailesh Sawa
Executive Director Director
Habib Jan
Company Secretary
Mumbai
May 29, 2012
150 Annual Report 2011-12
BOARD OF DIRECTORS
Rajiv Agarwal
Director
Capt. Subhas Das
Executive Director & CEO
V. P. Shah
Director
Deepak Kumar Varma
Director
K. K. Sinha
Director
Shailesh Sawa
Director
ESSAR BULK TERMINAL LIMITED
REGISTERED OFFICE
27th KM.
Surat-Hazira Road
Hazira
Gujarat 394 270
AUDIT COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi, Mumbai 400 034
151
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
Directors’ Report
The Directors have pleasure in presenting the Eight Annual Report together with the Audited Accounts of the Company for
the year ended March 31, 2012.
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Total Income 43,292.69 24,488.36
Total Expenditure excluding depreciation 13,239.35 9,751.31
Profit before depreciation, interest and tax 30,053.34 14,737.05
Depreciation 2,892.40 2,619.28
Finance cost 6,808.09 5,961.36
Profit before tax 20,352.85 6,156.41
Less : Provision for Tax 4,471.42 1,337.85
Profit After Tax 15,881.43 4,818.56
OPERATIONAL HIGHLIGHTS
Your Company owns and operates one of India’s largest dry bulk terminal and has successfully completed two years of
operations at the deep water terminal at Hazira in the State of Gujarat.
During the year, the terminal of your Company has demonstrated high standards of nautical services, safe and smooth
cargo handling and port operations.
Your Company handled 243 deep draft vessels and 469 mini bulk carriers during the year. The cargoes handled at the
terminal included iron ore pellets, coal, project cargoes and finished steel coils. The following throughput was handled
during the year under review:
S. No. Cargo Description Quantity (in MMT)
1 Bulk Cargo 10.13
2 Finished Steel Products 1.81
3 Project Cargo 0.08
Total 12.02
Your Company has conducted business with strong health, safety and environment consciousness. Your Company has
also received ISO certifications from Indian Register of Shipping for Quality, Health, Safety and Environment and there was
ZERO loss time injury during the year.
Your terminal facility is capable of accommodating bigger size vessels of upto 12 mtrs. draft directly alongside the berth
throughout the year, resulting in quicker turnarounds and reduced dependence on lighterage operations.
DIVIDEND
Your Board recommends the Dividend on all the series of Preference shares issued and outstanding as on March 31,
2012. The dividend will be paid at the respective rate for each series of Preference Shares issued by the Company.
Your Board also recommends a dividend of 15.50% on the equity shares and the 0.01% Compulsorily Convertible
Cumulative Participating Preference Shares of the Company.
The above dividend will be paid upon approval by the shareholders.
DIRECTORS
In accordance with the provisions of the Companies Act 1956, and the Articles of Association of the Company,
Shri. K. K. Sinha and Shri. V. P. Shah retire at the ensuing Annual General Meeting of the Company and being eligible,
offer themselves for re-appointment.
Directors’ Report
152 Annual Report 2011-12
During the year, Shri. Deepak Kumar Varma was
appointed as an Additional Director of the Company.
Shri. Varma holds office upto the date of the ensuing
Annual General Meeting. The Company has received a
notice from a member proposing the appointment of Shri.
Varma as a Director of the Company.
AUDITORS
Your Company’s Auditors, M/s. Deloitte Haskins & Sells,
Chartered Accountants, Ahmedabad retire at the conclusion
of the ensuing Annual General Meeting. It is proposed
to re-appoint M/s. Deloitte Haskins & Sells, Chartered
Accountants, Ahmedabad as the Auditors of the Company
from the conclusion of this Annual General Meeting until the
conclusion of the next Annual General Meeting.
HOLDING COMPANY
Essar Ports Limited continues to be the holding company
of your Company.
SUBSIDIARY COMPANIES
Essar Bulk Terminal Paradip Limited (EBTPL) became
a subsidiary of your Company during the year. Your
Company holds 95% of the equity share capital of EBTPL.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPOTION AND FOREIGN EXCHANGE EARNING
AND OUTGO
The provisions of Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosure of Particulars in
the Report of Board of Directors), Rules 1988, relating to
Energy Conservation and Technology Absorption are not
applicable to your Company.
The foreign exchange earnings and outgo is as under:
PARTICULARS OF EMPLOYEES
Information required in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975 as
amended is annexed and forms part of this report.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state
that:
(a) in preparation of the annual accounts, the applicable
accounting standards have been followed and there
have been no material departures;
(b) the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
Company at the end of the financial year;
(c) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
and
(d) the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS
Your Directors express their sincere thanks and
appreciation to all the employees for their commendable
teamwork and contribution to the growth of the Company.
Your Directors also thank the Gujarat Maritime Board,
the Customs Authorities, its Bankers and other business
associates for their continued support and co-operation
during the year.
For and on behalf of the Board
Capt. Subhas Das Shailesh Sawa
Mumbai Executive Director Director
May 29, 2012
Directors’ Report
153
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
TO THE MEMBERS OF
ESSAR BULK TERMINAL LIMITED
1. We have audited the attached Balance Sheet of
as at 31st March, 2012, the Statement of Profit
and Loss and the Cash Flow Statement of the
Company for the year ended on that date, both
annexed thereto. These financial statements are
the responsibility of the Company’s Management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those Standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and the
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
the significant estimates made by the Management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central
Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a
statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to
in paragraph 3 above, we report that:
(i) we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books;
(iii) the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by
this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956;
(v) in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2012;
(b) in the case of the Statement of Profit and
Loss, of the profit of the Company for the
year ended on that date and
(c) in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
5. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken on
record by the Board of Directors, we report that none
of the Directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of Section
274(1) (g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)
Gaurav J. Shah
Mumbai Partner
May 29, 2012 (Membership No.35701)
Directors’ Report Auditors’ Report
154 Annual Report 2011-12
(Referred to in paragraph 3 of our report of even date)
In our opinion and according to the information and
explanations given to us, the nature of the Company’s
business/activities during the year are such that clauses
(vi), (xiii), (xiv), (xviii), (xix) and (xx) of Para 4 of the Order are
not applicable to the Company.
1. In respect of fixed assets:
a. The Company has maintained proper records
showing full particulars, including quantitative
details and situation of its fixed assets.
b. The fixed assets of the Company are physically
verified by the management according to a
phased program designed to cover all the items
over a period of three years, which in our opinion,
is largely reasonable having regard to the size of
the Company and the nature of its assets. As per
the information given to us by the management,
no material discrepancies as compared to book
records were noticed in respect of fixed assets
verified during the year.
c. There is no disposal during the year.
2. In respect of inventories:
a. As explained to us, inventories were physically
verified by the management during the year at
reasonable intervals.
b. In our opinion and according to the information
and explanations given to us, the procedures of
physical verification of inventories followed by the
management were reasonable and adequate in
relation to the size of the Company and nature of
its business.
c. In our opinion and according to the information
and explanations given to us, the Company has
maintained proper records of its inventories. No
material discrepancies were noticed on physical
verification as compared to book records.
3. In our opinion and according to the information and
explanations given to us, there are no companies,
firms or parties required to be entered into the register
maintained under section 301 of the Companies Act,
1956. Accordingly, paragraphs 4(iii) (a) to (g) of the
Order are not applicable to the Company.
4. In our opinion and according to the information and
explanations given to us, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business for purchase
of inventory and fixed assets and for sale of services.
During the course of our audit, we have not observed
any continuing failure to correct major weaknesses in
such internal controls. The nature of the Company’s
business does not involve sale of goods.
5. In our opinion and according to the information and
explanations given to us, there are no contracts or
arrangements that need to be entered into the
register maintained in pursuance of Section 301 of the
Companies Act, 1956.
6. In our opinion, the internal audit system of the
Company is commensurate with the size of the
Company and the nature of its business.
7. We have broadly reviewed the cost records
maintained by the Company pursuant to the
Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section
209(1)(d) of the Companies Act, 1956 and are of the
opinion that prima facie the prescribed cost records
have been maintained. We have, however, not made
a detailed examination of the cost records with a view
to determine whether they are accurate or complete.
8. According to the information and explanations given
to us, in respect of statutory dues:
a. The Company has been generally regular in
depositing undisputed statutory dues, including
Provident Fund, Income Tax, Service Tax, Custom
Duty, Cess and any other material statutory dues,
as applicable, with the appropriate authorities
during the year. As explained to us, the
provisions for Investor Education and Protection
Fund, Employees’ State Insurance Scheme,
Wealth Tax, Sales Tax, Value Added Tax and
Excise Duty were not applicable to the Company
during the year.
There are no material undisputed amounts payable
in respect of above statutory dues outstanding as
at 31st March, 2012 for a period exceeding six
months from the date they became payable.
b. According to the information and explanations
given to us, there were no dues pending to be
deposited on account of any dispute in respect
of Sales Tax, Income Tax, Customs Duty, Wealth
Tax, Service Tax, Excise Duty and Cess as on
31st March, 2012.
9. The Company has no accumulated losses at the
end of the financial year and it has not incurred cash
losses in the current and immediately preceding
financial year.
10. In our opinion and according to the information
and explanations given to us, the Company has
not defaulted in repayment of dues to banks. The
Company has not borrowed any sums from financial
institutions or through issue of debentures.
11. According to the information and explanations given
to us and based on the documents and records
produced to us, the Company has not granted loans
and advances on the basis of security by way of
pledge of shares, debentures and other securities.
Annexure to the Auditor’s Report
155
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
12. In our opinion and according to the information and
explanations given to us, the Company has not given
any guarantee for loans taken by others from banks
and financial institutions.
13. To the best of our knowledge and belief and
according to the information and explanations given
to us, term loans availed by the Company were, prima
facie, applied by the Company during the year for the
purposes for which the loans were obtained, other
than temporary deployment pending application.
14. According to the information and explanations given
to us, and on an overall examination of the Balance
sheet of the Company, we report that the funds raised
on short-term basis have, prima facie, not been used
during the year for long-term investment.
15. To the best of our knowledge and belief and
according to the information and explanations given
to us, no material fraud on or by the Company was
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)
Gaurav J. Shah
Mumbai Partner
May 29, 2012 (Membership No.35701)
156 Annual Report 2011-12
Balance Sheet as at 31 March, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
I. EQUITY AND LIABILITIES
(1) Shareholders’ funds
(a) Share capital 2 26,150.00 26,150.00
(b) Reserves and surplus 3 18,636.39 5,189.63
44,786.39 31,339.63
(2) Share application money pending allotment – 1,791.70
(3) Non-current liabilities
(a) Long-term borrowings 4 109,099.99 77,417.64
(b) Deferred tax liabilities (Net) 37 2,502.66 15.89
(c) Other Long term liabilities 5 20,752.87 30,150.39
(d) Long-term provisions 6 211.29 100.67
132,566.81 107,684.59
(4) Current liabilities
(a) Short-term borrowings 7 1,761.59 2,873.98
(b) Trade payables 5,786.31 2,539.00
(c) Other current liabilities 8 9,385.56 16,231.25
(d) Short-term provisions 9 2,786.66 543.14
19,720.12 22,187.37
Total 197,073.32 163,003.29
II. ASSETS
(1) Non-current assets
(a) Fixed assets
(i) Tangible assets 10 75,771.77 74,643.31
(ii) Intangible assets 10 3.40 6.80
(iii) a. Capital work-in-progress 11 75,991.22 60,311.48
b. Expenditure during construction 12 21,733.55 9,319.26
173,499.94 144,280.85
(b) Non-current investments 13 163.06 109.88
(c) Long-term loans and advances 14 3,912.58 827.67
(d) Other non-current assets 15 31.03 62.07
4,106.67 999.62
(2) Current assets
(a) Inventories 16 58.08 133.17
(b) Trade receivables 17 9,968.78 4,506.42
(c) Cash and cash equivalents 18 1,035.55 3,600.04
(d) Short-term loans and advances 19 7,600.12 9,294.15
(e) Other current assets 20 804.18 189.04
19,466.71 17,722.82
Total 197,073.32 163,003.29
See accompanying notes forming part of the financial statements
In terms of our report attached For and on behalf of the board
For Deloitte Haskins & Sells
Chartered Accountants
Gaurav J. Shah Subhas Das Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 29, 2012 May 29, 2012
157
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
(Rs. in lakhs)
Particulars Note Year ended Year ended
No. March 31, 2012 March 31, 2011
I. Revenue from operations 21 42,534.14 24,114.57
II. Other income 22 758.55 373.79
III. Total Revenue (I + II) 43,292.69 24,488.36
IV. Expenses:
a. Operating expenses 23 11,491.50 8,600.96
b. Establishment expenses 24 876.37 443.88
c. Employee benefit expenses 25 816.88 646.55
d. Other expenses 26 54.60 59.93
Total expenses 13,239.35 9,751.31
V. Earnings before finance costs, depreciation and tax 30,053.34 14,737.04
VI. Finance cost 27 6,808.09 5,961.36
VII. Earnings before depreciation and tax (V-VI) 23,245.25 8,775.68
VIII. Depreciation and amortisation expense 2,892.40 2,619.28
IX. Profit/ (Loss) for the year before tax (VII-VIII) 20,352.85 6,156.40
X. Tax expense:
a. Current tax 4,155.00 1,228.43
b. MAT Credit Entitlement (2,200.00) (200.00)
c. Deferred tax charge/(credit) 2,486.77 323.39
d. Short/(Excess) provisions for earlier years 29.65 (13.97)
XI. Profit/ (Loss) for the year (IX-X) 15,881.43 4,818.55
XII. Earnings per equity share:
a. Basic 10.14 3.78
b. Diluted 5.84 1.75
See accompanying notes forming part of the financial statements
Statement of Profit and Loss for the year ended 31 March 2012
In terms of our report attached For and on behalf of the board
For Deloitte Haskins & Sells
Chartered Accountants
Gaurav J. Shah Subhas Das Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 29, 2012 May 29, 2012
158 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
I. CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxes 20,352.85 6,156.40
Adjustments for:
a. Preliminary expenditure written off 31.03 31.03
b. Depreciation and amortisation 2,892.40 2,619.28
c. Gratuity 11.63 31.55
d. Compensated absences 51.31 15.51
e. Interest income (2.50) (351.94)
g. Interest expense 6,808.09 5,934.54
Operating profits before working capital changes 30,150.05 14,436.37
Movements in working Capital:
a. Increase in trade and other receivables (7,362.24) (8,656.89)
b. Increase in trade and other payables (4,752.98) 9,291.94
c. Increase in provisions 107.13 (47.70)
Cash generated from operations 18,141.96 15,023.72
Less: Income taxes paid (net of refund) (2,173.03) (444.54)
Net cash generated from operations 15,968.93 14,579.18
II. CASH FLOW FROM INVESTING ACTIVITIES
a. Purchase of fixed assets (4,871.75) (7.16)
b. Capital work in progress / expenditure during construction (18,585.56) (36,120.83)
c. Fixed deposits placed (849.09) (3,349.50)
d. Fixed deposits matured 3,907.00 6,116.00
e. Inter company deposits refunded – 330.00
f. Interest Income received 174.59 173.87
g. Purchase of current investments (58.17) (4,100.00)
h. Proceed from sale of current Investments 5.00 4,225.33
i. Proceed from sale of long term investment – 0.64
Net cash used in investing activities (20,277.98) (32,731.65)
III. CASH FLOW FROM FINANCING ACTIVITIES
a. Proceeds from secured loan 31,682.35 81,810.57
b. Proceeds from unsecured loan – 1,850.00
c. Proceeds from share application money received – 2,808.14
d. Share application money refunded (1,791.70) (46.16)
Cash Flow Statement for the year ended 31 March 2012
159
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
e. Bills accepted 23,719.43 30,196.10
f. Bills accepted repaid (32,052.66) (33,758.71)
g. Effect of exchange differences on translation of assets and liabilities 9.22 –
h. Repayment of the secured loan – (50,465.74)
i. Repayment of the unsecured loan (1,200.00) (4,530.00)
j. Interest and finance cost paid (15,564.17) (10,601.53)
Net cash flow from financing activities 4,802.47 17,262.67
Net increase / (decrease) in cash and cash equivalents 493.42 (889.80)
Cash and cash equivalents at the beginning of the year 250.16 1,139.96
Cash and cash equivalents at the end of the year 743.58 250.16
Notes:
1. Cash and cash equivalents include :
Cash and bank balances 743.58 250.16
Total cash & cash equivalents 743.58 250.16
Amounts not available for immediate use : -
Balances in Margin money deposits 291.97 3,349.88
Cash and bank balances (as per Note 18) 1,035.55 3,600.04
2. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard 3 – ‘Cash
flow statement’ as notified under the Companies (Accounting Standard) Rules, 2006.
Cash Flow Statement for the year ended 31 March 2012
(Rs. in lakhs)
Particulars For the year For the year
ended ended
31 March 2012 31 March 2011
In terms of our report attached For and on behalf of the board
For Deloitte Haskins & Sells
Chartered Accountants
Gaurav J. Shah Subhas Das Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 29, 2012 May 29, 2012
160 Annual Report 2011-12
Notes forming part of financial statements
1 SIGNIFICANT ACCOUNTING POLICIES:
A. Basis of Accounting
These financial statements are prepared under the
historical cost convention, on accrual basis of accounting,
and are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards (AS) referred to in sub-section (3C)
of Section 211 of the Companies Act, 1956.
B. Use of Estimates
The preparation of financial statements in conformity with
the generally accepted accounting principles requires
estimates and assumptions to be made that affect the
reported amounts of assets, liabilities and disclosures
relating to contingent liabilities as at the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognized in the period in which the
results are known / materialized.
C. Fixed Assets
Fixed assets are recorded at cost of acquisition or at
revalued amounts less accumulated depreciation and
impairment loss, if any.
Cost of acquisition of fleet includes brokerage, startup
costs and cost of major improvements/ up gradation.
Cost of acquisition is inclusive of cost of construction
including erection, installation and commissioning
expenses, expenditure during construction, inseparable
know how costs, gains or losses earned / incurred during
the trial run, nonrefundable duties and taxes, borrowing
costs and other incidental costs, where applicable.
D. Capital Work-in-Progress and Expenditure during
Construction
Direct expenditure on assets under construction is shown
under capital work in progress.
Project management consultancy/ technical advisory fees
and expenditure incidental to the construction of jetty
that take substantial period of time to get ready for their
intended use are accumulated as expenditure during
construction pending allocation to fixed assets and other
accounts, as applicable on completion of the project.
E. Depreciation
Depreciation on Fleet (Dredger) and Booster Pump is
provided by using the straight line method at the rates
prescribed in Schedule XIV to the Companies Act, 1956.
Depreciation on impact hammer, turning plates, clamps
and others included in plant and machinery are provided
by using the straight line method at the rates prescribed in
Schedule XIV to the Companies Act, 1956.
All other assets are depreciated by using the written
down value method at the rates prescribed in Schedule
XIV to the Companies Act, 1956. Assets costing less than
Rs.5,000 per item are depreciated at 100% in the year of
acquisition.
Depreciation on additions to / deductions from fixed
assets made during the year is provided on a pro-rata
basis from / up to the date of such additions / deductions,
as the case may be.
Berth and Jetty that are to be handed over to Gujarat
Maritime Board are depreciated over the concession
period or rates prescribed in Schedule XIV to the
Companies Act, 1956 whichever is higher.
F. Borrowing Costs
Borrowing costs that are directly attributable to the
acquisition, construction/development of qualifying asset
are capitalized as a part of cost of such asset. A qualifying
asset is one that necessary takes substantial period of
time to get ready for the intended use.
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of fixed assets
are amortized and charged to the Statement of Profit and
Loss, over the tenure of the loan.
G. Investments
Long term investments are stated at cost. However, in
the opinion of management, when there is an other than
temporary decline in the value of long term investments
with reference to their fair/market value, the carrying
amount is reduced to recognize that decline. Current
investments are carried at lower of cost or fair value.
H. Foreign Currency Transactions
Transactions denominated in foreign currencies are
accounted at standard exchange rates determined
monthly which approximates the actual rates on the date
of transaction. The difference between the standard rate
and the actual rate of settlement is accounted in the
Statement of Profit and Loss.
Monetary items denominated in foreign currency are
translated at the rate prevailing exchange rate at the
end of the year. Gains / losses arising on conversion /
translation / settlement of foreign currency transactions are
recognized in the Statement of Profit and Loss.
I. Taxation
Current tax is provided as per the provisions of the Income
Tax Act, 1961.
The tax effect of timing differences occurring between
taxable income and accounting income that are capable of
reversal in one or more subsequent periods are recorded
as a deferred tax asset or deferred tax liability. They are
161
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
measured using the substantively enacted tax rates and
tax regulations as at the balance sheet date.
Deferred tax assets arising on account of brought forward
losses and unabsorbed depreciation under tax laws are
recognized only if there is virtual certainty of realization,
supported by convincing evidence. Deferred tax assets on
account of other timing differences are recognized only to
the extent there is reasonable certainty of realization.
J. Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognized for present obligations arising
out of the past events if it is probable that an outflow of
economic resources, the amount of which can be reliably
estimated, will be required to settle the obligations.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or
nonoccurrence of one or more uncertain future events
not wholly within the control of the Company, or a present
obligation that is not recognized because a reliable
estimate of the liability cannot be made, or the likelihood
of an outflow of economic resources is remote.
Contingent assets are neither recognized nor disclosed in
the financial statements.
K. Inventory
Stores, spares and consumables are valued at lower of
cost (net of refundable taxes and duties) or net realizable
value. Cost is determined on moving weighted average
price.
L. Revenue Recognition
1. Revenue from operations represents the
revenue from Cargo Handling and Other
Related Services. Revenue is recognized when
the services are rendered and no significant
uncertainty exists as to determination or
realization exists.
2. Revenue in respect of Other Income is
recognized when a reasonable certainty to its
realization exists.
M. Operating Expenses
Operating expenses represents expenses relating to the
operation of cargo handling including hire charges, repairs,
stores, power and fuel charges and other expenses and is
accounted on accrual basis.
N. Impairment of Assets
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If
such recoverable amount of the asset is less than its
carrying amount, the carrying amount is reduced to its
recoverable amount. The amount so reduced is treated
as an impairment loss and is recognized in the Statement
of Profit and Loss or expenditure during construction,
as applicable. If at the balance sheet date, there is an
indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and
the asset is carried at the recoverable amount subject to a
maximum of depreciated historical cost.
O. Employee Benefits
a) Contribution to recognized provident fund,
which is a fixed percentage of eligible
employees’ salary, is charged to the statement
of Profit and Loss and expenditure during
construction, as the case may be.
b) The liability for gratuity is actuarially determined
and funded to Life Insurance Corporation of
India to the extent demanded by them and
balance taken to provisions.
c) Provision for all accumulated compensated
absences of eligible employees is based on an
independent actuarial valuation.
P. Miscellaneous Expenditure
Share issue expenses are written off over five years.
162 Annual Report 2011-12
Notes forming part of financial statements
2 SHARE CAPITAL
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
(i) Authorised
a. Equity Shares of Rs.10 each 10,000,000 1,000.00 170,000,000 17,000.00
b. 0.01 % Preference Shares of Rs.10 each 290,000,000 29,000.00 130,000,000 13,000.00
300,000,000 30,000.00 300,000,000 30,000.00
(ii) Issued, Subscribed & Paid up
a. Equity Shares of Rs.10 each fully paid 5,000,000 500.00 134,984,850 13,498.48
b. 0.01% Optionally Convertible Redeemable
Cumulative Preference Shares (OCRCPS)
of Rs.10 each 44,500,000 4,450.00 44,500,000 4,450.00
c. 0.01% Fully Convertible Cumulative
Preference Shares (FCCPS) of Rs.10 each 82,015,150 8,201.52 82,015,150 8,201.52
d. 0.01% Compulsory Convertible
Cumulative Participating Preference
Shares (CCCPPS) of Rs.10 each 129,984,850 12,998.48 – –
261,500,000 26,150.00 261,500,000 26,150.00
Notes : -
a. Reconciliation of the number of shares outstanding and the amount of share capital as at March 31, 2012
and March 31, 2011 is set out below:
Equity Shares OCRCPS FCCPS CCCPPS
(i) Shares outstanding at the Rs. in Lakhs 13,498.48 4,450.00 8,201.52 –
beginning of the year Numbers 134,984,850 44,500,000 82,015,150 –
(ii) Shares Issued during Rs. in Lakhs – – – 12,998.48
the year Numbers – – – 129,984,850
(iii) Shares bought back during the Rs. in Lakhs (12,998.48) – – –
year (Refer Note 28) Numbers (129,984,850) – – –
(iv) Shares outstanding at the Rs. in Lakhs 500.00 4,450.00 8,201.52 12,998.48
end of the year Numbers 5,000,000 44,500,000 82,015,150 129,984,850
b. Shares in each class held by holding company / by each shareholder holding more than 5% shares.
Equity Shares OCRCPS
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Essar Ports Limited Numbers 3,700,000 99,888,850 32,930,000 32,930,000
(Holding Company) Percentage 74.00% 74.00% 74.00% 74.00%
(ii) Essar Steel India Limited Numbers 1,300,000 35,096,000 10,413,000 10,413,000
Percentage 26.00% 26.00% 23.40% 23.40%
(iii) Essar Investments Limited Numbers – – 1,157,000 1,157,000
Percentage – – 2.60% 2.60%
Total Numbers 5,000,000 134,984,850 44,500,000 44,500,000
Percentage 100.00% 100.00% 100.00% 100.00%
163
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
FCCPS CCCPPS
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Essar Ports Limited Numbers 79,022,903 79,022,903 129,984,850 –
(Holding Company) Percentage 96.35% 96.35% 100.00% –
(ii) Essar Steel India Limited Numbers 2,992,247 2,992,247 – –
Percentage 3.65% 3.65% – –
Total Numbers 82,015,150 82,015,150 129,984,850 –
Percentage 100.00% 100.00% 100.00% –
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Terms / rights attached to preference shares
i. Dividend:
Fixed Dividend on Preference Shares: The Company has three classes of preference shares having fixed dividend
of 0.01% p.a. from the allotment on cumulative basis.
ii. Participating Dividend:
CCCPPS holder shall have the same rights to dividend as that of the equity share holder over and above the
fixed dividend.
iii. Conversion:
The holder of OCRCPS have an option to either apply for conversion of preference shares into equity shares of
Rs.10/- each in the ratio of 1:1 at par after one year from the date of issue (i.e. 28th March, 2007) or they will be
redeemed at the end of ten years from the date of allotment.
The holder of FCCPS have an option either to apply for conversion of preference shares into equity shares of
Rs.10/- each in the ratio of 1:1 at par at any time after one year from the date of allotment (i.e. 12th November,
2007) or to compulsorily convert them into equity shares at the end of ten years from the date of allotment.
Each CCCPPS shall be compulsorily convertible into one Equity Share at the end of twenty years from the
date of issue and allotment (i.e. 28th March, 2012). The CCCPPS holder shall have the option to convert the
CCCPPS into Equity Shares any time after the expiry of one year from the date of issue and allotment of the
CCCPPS. Each CCCPPS shall convert into one Equity Share.
Equity Shares issued upon conversion of the preference shares shall rank pari passu with the existing Equity
Shares.
164 Annual Report 2011-12
Notes forming part of financial statements
3 RESERVES & SURPLUS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
a. General Reserve
Opening balance – –
(+) Transfer from Surplus in Profit & Loss 1,191.11 –
Closing Balance 1,191.11 –
b. Surplus / (Deficit) in Statement of Profit & Loss
Opening balance 5,189.63 376.37
(+) Net Profit For the current year 15,881.43 4,818.55
(-) Proposed Dividend
on Equity Shares (Rs.1.55 per share) (77.50) –
on Preference Shares (2,017.34) (4.55)
(-) Tax on Dividend (339.83) (0.74)
(-) Transfer to General Reserve (1,191.11) –
Closing Balance 17,445.28 5,189.63
Total 18,636.39 5,189.63
4 LONG TERM BORROWINGS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Secured
Term loans from Banks 109,099.99 77,417.64
Total 109,099.99 77,417.64
Term loans from banks are repayable in quarterly instalments starting from 1st October, 2013 and are secured by
first pari passu charge on all future movable / immovable properties, insurance contracts, accounts receivables and
all other assets of the Company including but not limited good will, trademarks and patents.
5 OTHER LONG TERM LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Other Long Term Liabilities
Acceptances* 20,752.87 30,150.39
Total 20,752.87 30,150.39
* Acceptances facilities are part of loan agreement for rupee term loan from banks. The acceptances get
converted into rupee term loan.
165
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
6 LONG TERM PROVISIONS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Provision for gratuity 16.14 4.50
Provision for compensated absences 195.15 96.17
Total 211.29 100.67
7 SHORT TERM BORROWINGS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Secured
From Banks
Working Capital Loan 1,503.55 1,673.98
Buyers’ Credit 258.04 –
Total 1,761.59 1,673.98
Unsecured
From related parties
Vadinar Ports & Terminals Limited – 1,200.00
Total 1,761.59 2,873.98
The Working Capital Loan and Buyers’ Credit are secured by first pari passu charge on all the present and future
movable / immovable assets / properties, insurance contracts, accounts, receivables and all other assets of the
Company including but not limited to goodwill, trademarks and patents.
8 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Acceptances 1,110.00 45.71
Interest accrued but not due on borrowings 29.78 111.61
Interest accrued and due on borrowings 101.15 300.00
Advance from customer 1,704.02 3,505.53
Sundry Creditors (for capital expenses) 5,725.30 8,811.33
Other payables 715.31 3,457.07
Total 9,385.56 16,231.25
9 SHORT TERM PROVISIONS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Provision for employee benefits
Provision for compensated absences 8.78 12.27
Proposed dividend 2,094.83 –
Tax on dividend 339.83 –
Provision for tax (Net) 343.22 530.87
Total 2,786.66 543.14
166 Annual Report 2011-12
Notes forming part of financial statements
10
FIX
ED
AS
SE
TS
(A
T C
OS
T)
(Rs.
in lakhs)
G
RO
SS
BLO
CK
D
EP
RE
CIA
TIO
N
NE
T B
LO
CK
A
s a
t
As a
t A
s a
t
As a
t A
s a
t A
s a
t
A
pril 1,
Marc
h 3
1,
Ap
ril 1,
For
the
Marc
h 3
1,
M
arc
h 3
1,
Marc
h 3
1,
2011
Ad
ditio
ns
2012
2011
year
20
12
2
01
2
20
11
I.
Tan
gib
le fi
xed
assets
Land
6.7
0
–
6.7
0
–
–
–
6.7
0
6.7
0
B
uild
ing
27.9
8
–
27.9
8
3.8
1
1.2
1
5.0
2
22
.96
2
4.1
7
Fle
et
(Dre
dgers
) 10,7
47.0
2
–
10,7
47.0
2
2,6
27.8
1
838.8
5
3,4
66
.66
7
,28
0.3
6
8,1
19
.21
B
ert
h &
Jett
y 56,7
74.1
4
–
56,7
74.1
4
2,0
84.3
1
2,2
70.9
7
4,3
55
.28
5
2,4
18
.86
5
4,6
89
.83
P
lant
and
eq
uip
ment
12,3
40.8
1
4,6
15.9
8
16,9
56.7
9
572.2
1
601.6
7
1,1
73
.88
1
5,7
82
.91
1
1,7
68
.60
Vehic
les
17.2
0
241.8
4
259.0
4
1.2
6
20.8
4
22
.10
2
36
.94
1
5.9
4
O
ffice e
quip
ments
32.8
1
8.6
9
41.5
0
15.3
9
7.1
4
22
.53
1
8.9
7
17
.42
Furn
iture
and
fixtu
res
2.8
2
5.2
3
8.0
5
1.3
8
2.6
0
3.9
8
4.0
7
1.4
4
Tota
l (I)
79,9
49.4
8
4,8
71.7
4
84,8
21.2
2
5,3
06.1
7
3,7
43.2
8
9,0
49
.45
7
5,7
71
.77
7
4,6
43
.31
II.
Inta
ng
ible
fixed
assets
S
oftw
are
17.0
0
–
17.0
0
10.2
0
3.4
0
13
.60
3
.40
6
.80
Tota
l (II
)
17.0
0
–
17.0
0
10.2
0
3.4
0
13
.60
3
.40
6
.80
Tota
l (I
+ II)
79,9
66.4
8
4,8
71.7
4
84,8
38.2
2
5,3
16.3
7
3,7
46.6
8
9,0
63
.05
7
5,7
75
.17
7
4,6
50
.11
Pre
vious Y
ear
11,3
19.5
2
68,6
46.9
6
79,9
66.4
8
1,9
50.0
9
3,3
66.2
8
5,3
16
.37
7
4,6
50
.11
167
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
11 CAPITAL WORK IN PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Plant and Equipment 92.17 –
Jetty construction expenses 14,379.03 4,518.92
Dredging expenses 61,520.02 55,792.56
Total 75,991.22 60,311.48
12 EXPENDITURE DURING CONSTRUCTION
(Rs. in lakhs)
As at Additions during As at
April 1, 2011 the year March 31, 2012
Certification and survey charges 8.63 200.80 209.43
Salary & manpower expenses 1,448.72 1,449.45 2,898.17
Legal and professional charges 336.38 587.20 923.58
Insurance 55.35 68.53 123.88
Interest and finance cost 6,779.16 8,756.09 15,535.25
Agency fee 57.26 56.58 113.84
Depreciation 683.82 854.29 1,538.11
Taxes and dues 6.75 6.96 13.71
Traveling expenses 8.37 28.31 36.68
Hiring charges 241.73 345.59 587.32
Power and electricity expenses – 218.95 218.95
General expenses 8.30 120.95 129.25
Total (i) 9,634.47 12,693.70 22,328.17
Less :
Interest accrued on term deposits (205.31) (131.61) (336.92)
Gain on redemption of mutual funds (10.89) – (10.89)
Interest on intercompany deposits given (24.52) – (24.52)
Site formation services/scrap income (52.27) (147.80) (200.07)
Vessel and equipment hire income (22.22) – (22.22)
Total (ii) (315.21) (279.41) (594.62)
Total (A-B) 9,319.26 12,414.29 21,733.55
168 Annual Report 2011-12
Notes forming part of financial statements
13 NON CURRENT INVESTMENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Trade Investments {Unquoted (At cost)}
(a) Investment in Equity Shares
In Subsidiary Companies
(i) Essar Dredging Limited
Nil (Previous Year: 50,000 equity shares of Rs.10/- each) – 5.00
(ii) Essar Bulk Terminal Paradip Limited
47,500 (Previous Year: 6,630) equity shares of Rs.10/- each 8.84 0.66
In Other Companies
(i) Bhander Power Limited
386,000 (Previous Year: 386,000) equity shares of Rs.10/- each 104.22 104.22
(b) Investment in Preference Shares
(i) Essar Bulk Terminal Paradip Limited
500,000 (Previous Year: Nil) 0.01% compulsory convertible
cumulative preference Shares of Rs.10/- each 50.00 –
Total 163.06 109.88
Value of quoted investments – –
Value of unquoted investments 163.06 109.88
Provision for diminution in the value of investments – –
14 LONG TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Other loans and advances
Minimum alternate tax credit 2,412.07 212.07
Prepaid expenses 1,053.75 609.95
Capital advances 446.76 5.65
Total 3,912.58 827.67
15 OTHER NON CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Share issue expenses to the extent not written off 31.03 62.07
Total 31.03 62.07
169
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
16 INVENTORIES
(Valued at lower of cost and net realisable value)
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Fuel, oil & lubricants 44.16 127.66
Stores and spares 13.92 5.51
Total 58.08 133.17
17 TRADE RECEIVABLES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Trade receivables outstanding for a period exceeding six 12.75 372.89
months from the date they are due for payment
Others 9,956.03 4,133.53
Total 9,968.78 4,506.42
18 CASH AND CASH EQUIVALENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Balances with banks
On current accounts 743.58 250.16
Other bank balances
Margin Deposits 291.97 3,349.88
Total 1,035.55 3,600.04
19 SHORT-TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Loans & advances to related parties 781.41 165.70
Advances recoverable in cash or in kind 447.13 583.99
Balance with Excise Department 5,407.84 8,162.53
Loans & advances to employees 12.43 0.02
Prepaid expenses 951.31 381.91
Total 7,600.12 9,294.15
170 Annual Report 2011-12
Notes forming part of financial statements
20 OTHER CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Receivables
– From related parties 662.48 –
– From service tax authorities 15.20 –
– From others 55.00 55.87
732.68 55.87
Interest accrued on deposits with bank 40.47 102.14
Shares issue expenses to the extent not written off 31.03 31.03
Total 804.18 189.04
21 REVENUE FROM OPERATIONS
(Rs. in lakhs)
Year ended Year ended
March 31, 2012 March 31, 2011
Cargo handling income 35,742.77 20,685.91
Wharfage charges recovery 1,832.88 966.70
Port Charges 2,680.40 1,634.35
Berth Hire Charges 136.85 29.75
Piliotage charges 553.73 180.14
Facility Charges 896.02 294.82
Vessel & Equipment hire income 161.74 208.86
Stevedoring Income 529.75 114.04
Total 42,534.14 24,114.57
22 OTHER INCOME
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Interest Income from related parties 2.50 351.94
Ship management services, storage charges, scrap sales, etc. 756.05 21.85
Total 758.55 373.79
171
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
23 OPERATING EXPENSES
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Repairs – Plant and Equipment 465.41 282.20
Consumption of stores and spares 569.65 392.51
Power and fuel charges 218.95 137.10
Hire charges 3,973.25 1,688.81
Manning management expenses 1,332.35 1,399.07
Insurance 60.56 50.08
Security maintenance charges 63.35 47.85
Lighterage Cost 1,997.14 3,300.00
Port Charges 978.39 347.24
Wharfage charges 1,832.45 956.10
Total 11,491.50 8,600.96
24 ESTABLISHMENT EXPENSES
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Professional fees 589.23 134.43
Rent 24.49 –
Repairs others 124.00 226.36
Travelling and conveyance 91.43 39.64
Vehicle hire and maintenance charges 11.46 10.66
Auditors’ remuneration 7.78 7.43
Rates and taxes 27.98 25.36
Total 876.37 443.88
25 EMPLOYEE BENEFIT EXPENSES
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Salaries, wages and related costs 719.61 566.40
Contribution to staff provident and other funds 71.79 63.45
Staff welfare expenses 25.48 16.70
Total 816.88 646.55
26 OTHER EXPENSES
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Miscellaneous expenses 23.57 28.90
Preliminary expenses written off 31.03 31.03
Total 54.60 59.93
172 Annual Report 2011-12
Notes forming part of financial statements
27 FINANCE COST
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Interest expense 6,628.34 5,737.87
Other borrowing costs 134.07 196.67
Bank Charges 45.68 26.82
Total 6,808.09 5,961.36
28 BUY BACK
The Hon’ble High Court of Gujarat at Ahmedabad has vide order No. 2054/11 dated May 3, 2011 approved the Scheme
of Arrangement (the ‘Scheme’) between Essar Bulk Terminal Limited (EBTL) and its shareholders.
Pursuant to the said order the members of the Company have tendered 129,984,850 equity shares. These members have
been issued and allotted 129,984,850 – 0.01% Compulsorily Convertible Cumulative Participating Preference Shares of
Rs.10/- each (the CCCPPS). Each CCCPPS can be converted into one equity share of Rs.10/- each. The equity shares to be
issued upon conversion of the CCCPPS shall rank pari passu in all respects with the existing equity shares of the Company.
Each CCCPPS shall be compulsorily convertible into one Equity Share at the end of twenty years from the date of issue
and allotment. The CCCPPS holder shall have the option to convert the CCCPPS into Equity Shares any time after the
expiry of one year from the date of issue and allotment of the CCCPPS.
The CCCPPS holder shall participate in any dividend or any other distribution by the Company which will be on fully
diluted basis i.e. the CCCPPS holder shall have the same rights to dividend as that of the equity share holder over and
above the fixed dividend.
29 CONTINGENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Bills discounted from Bank 2,500.00 –
Guarantee given by banks on behalf of the company 905.35 905.35
Total 3,405.35 905.35
30 CAPITAL COMMITMENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Outstanding capital commitments {net of advances paid
Rs.446.76 lakhs (Previous Year Rs.5.65 lakhs) } 1,976.64 2,696.26
31 AUDITORS’ REMUNERATION
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Audit fees 2.50 4.00*
Other assurance services 5.50 2.95
Service tax on above 0.82 0.48
Total 8.82 7.43
(* includes Rs.1.50 lakhs pertaining to previous year)
173
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
32 EARNINGS PER SHARE
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
(i) Basic Earnings per Share
Net Profit for the year (Rs. in lakhs) [A] 15,881.43 4,818.55
Less: Dividend on preference shares including
dividend distribution tax (Rs. in lakhs) 2,344.60 1.44
Earnings for the purpose of basic earnings
per share (Rs. in lakhs) [B] 13,536.83 4,817.11
Equity shares at the beginning of the year(nos.) 134,984,850 100,435,004
Equity shares issued during the year (nos.) – 34,549,846
Equity shares bought back during the year (nos.) (129,984,850) –
Equity shares outstanding at the end of year (nos.) 5,000,000 134,984,850
Weighted average number of Equity shares for purpose
of calculating basic earnings per share (nos.) [C] 133,564,251 127,601,595
Basic Earnings Per Share [B / C] 10.14 3.78
Nominal Value of Equity Share (Rs.) 10.00 10.00
(ii) Diluted Earnings per Share
Dilutive potential equity shares (Including number of
equity shares which would be issued upon conversion of
preference shares) (nos.) [D] 138,411,811 147,144,051
Weighted average number of shares for purpose of calculating
diluted earnings per share (nos.) [E] = [C+D] 271,976,062 274,745,646
Diluted Earnings Per Share [A / E] 5.84 1.75
Nominal Value of Equity Share (Rs.) 10.00 10.00
33 INFORMATION PURSUANT TO REVISED SCHEDULE VI TO THE COMPANIES ACT, 1956 TO THE EXTENT
APPLICABLE IS GIVEN BELOW:
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
a) C.I.F. value of imports
Capital goods 1,947.77 379.29
Stores, spares and components 291.71 6.79
Total 2,239.48 386.08
b) Expenditure in foreign currency (on accrual basis)
Interest and finance costs 2.97 –
Insurance charges 26.22 21.50
Professional charges 0.02 0.56
Foreign travel 40.07 –
Freight charges 109.94 –
Total 179.22 22.06
174 Annual Report 2011-12
Notes forming part of financial statements
34 EARNING IN FOREIGN CURRENCY
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Port charges, Berth hire charges, Pilotage charges,
Facility charges etc. 1,115.40 388.93
Total 1,115.40 388.93
35 FOREIGN CURRENCY EXPOSURE
a) There were no forward /options contract in to by the Company during the financial year to hedge its foreign
currency exposure.
b) The year-end currency exposures that have not been hedged by a derivative instrument or otherwise are given
below:
Amount (Rs. in lakhs) Amount in foreign currency in lakhs
Particulars As at As at As at As at
March 31, March 31, Currency March 31, March 31,
2012 2011 2012 2011
– 1.10 GBP – 0.02
b) Amount payable in foreign currency on
on account of Buyers’ credit 48.33 – SEK 6.43 –
36 RELATED PARTY TRANSACTIONS
a) Holding companies:
i) Essar Global Limited, Cayman Island (ultimate holding company)
ii) Essar Shipping & Logistics Limited, Cyprus (holding company of Essar Ports Limited)
iii) Essar Ports Limited (formerly known as Essar Shipping, Ports & Logistics Limited)
b) Key management personnel:
Capt. Subhas Das – Whole time Director & CEO
c) Subsidiary:
i) Essar Bulk Terminal Paradip Limited (with effect from 28th March, 2012)
ii) Essar Dredging Limited (up to 30th June, 2011)
d) Other related parties where there have been transactions:
i) Essar Projects (India) Limited
ii) Futura Travels Limited
iii) Essar Logistics Limited
iv) Essar Steel India Limited (previously known as Essar Steel Limited)
v) Essar House Services Limited
vi) Essar Investments Limited
vii) Essar Engineering Services Limited
175
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
viii) Essar Heavy Engineering Services
ix) Essar Oil Limited
x) Essar Dredging Limited
xi) Essar Bulk Terminal (Salaya) Limited
xii) Essar Bulk Terminal Paradip Limited
xiii) Essar Information Technology Limited
xiv) Vadinar Oil Terminal Limited
xv) Bhander Power Limited
xvi) Essar Oilfield Services (India) Limited
xvii) Aegis Limited
xviii) Vadinar Ports & Terminals Limited
xix) Essar Shipping Limited
xx) Essar Infrastructure Services Limited
xxi) Essar Shipping (Cyprus) Limited
xxii) Essar Agrotech Limited
xxiii) Arkay Holdings Limited
xxiv) Essar House Limited
xxv) Essar Offshore Subsea Limited
xxvi) Essar Services India Limited
176 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding and subsidiary Other related Key management
company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Allotment of equity shares
Essar Ports & Terminals Limited – 3,454.98 – – – – – 3,454.98
Share application money received
Essar Ports & Terminals Limited – 2,808.14 – – – – – 2,808.14
Purchase of shares
Essar Logistics Limited – – 0.83 – – – 0.83 –
Essar Ports Limited 4.89 – – – – – 4.89 –
Essar Steel India Limited – – 2.46 – – – 2.46 –
Essar Bulk Terminal Paradip Limited 50.00 – – – – – 50.00 –
Sale of shares
Essar Investments Limited – – 5.00 – – – 5.00 –
Essar Ports Limited – 0.64 – – – – – 0.64
Jetty constructions and project management consultancy
Essar Projects (India) Limited – – 1,377.83 1,096.73 – – 1,377.83 1,096.73
Essar Engineering Services Limited – – 3.60 224.58 – – 3.60 224.58
Essar Oil Limited – – 1.25 0.21 – – 1.25 0.21
Aegis Limited – – 32.35 0.09 – – 32.35 0.09
Essar Investments Limited – – 160.87 – – – 160.87 –
Essar Infrastructure Services Limited – – 76.73 – – – 76.73 –
Futura Travels Limited – – 59.52 4.69 – – 59.52 4.69
Essar Steel India Limited – – 11.93 – – – 11.93 –
Essar House Limited – – 22.08 – – – 22.08 –
Essar Logistics Limited – – 94.24 – – – 94.24 –
Vadinar Oil Terminal Limited – – – 214.97 – – – 214.97
Essar Services India Limited – – 45.63 – – – 45.63 –
Essar Ports Limited 199.50 – – – – – 199.50 –
Jetty construction expenses – sale
Essar Steel India Limited – – 5.65 10.75 – – 5.65 10.75
Essar Heavy Engineering Services – – 127.30 43.63 – – 127.30 43.63
Essar Logistics Limited – – – 9.24 – – – 9.24
Jetty construction expenses – procurement
Essar Steel India Limited – – 4.04 538.25 – – 4.04 538.25
Essar Heavy Engineering Services – – – 1.27 – – – 1.27
Essar Oil Limited – – 6.63 131.95 – – 6.63 131.95
Hazira Pipe Mill Limited – – – 33.58 – – – 33.58
Remuneration
Subhas Das – – – – 84.03 77.86 84.03 77.86
Repairs and maintenance work
Essar Projects (India) Limited – – 440.73 – – – 440.73 –
Essar Heavy Engineering Services – – 2.50 – – – 2.50 –
Vadinar Oil Terminal Limited – – – 43.82 – – – 43.82
Essar Infrastructure Services Limited – – 76.73 – – – 76.73 –
Lighterage cost
Essar Logistics Limited – – – 3,300.00 – – – 3,300.00
Essar Ports Limited 840.00 – – – – – 840.00 –
Arkay Holdings Limited – – 848.95 – – – 848.95 –
177
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
Purchase of fuel (HSD Diesel)
Essar Oil Limited – – 112.15 27.91 – – 112.15 27.91
Vadinar Oil Terminal Limited – – 16.07 – – – 16.07 –
Consumption of stores & spares
Essar Steel India Limited – – 6.38 0.88 – – 6.38 0.88
Essar Heavy Engineering Services – – – 1.01 – – – 1.01
Cargo handling services rendered
Essar Logistics Limited – – 1,958.01 1,689.57 – – 1,958.01 1,689.57
Essar Steel India Limited – – 33,370.06 19,002.54 – – 33,370.06 19,002.54
Port services rendered & wharfage
charges
Essar Steel India Limited – – 1,571.95 877.38 – – 1,571.95 877.38
Essar Logistics Limited – – 326.25 27.26 – – 326.25 27.26
Essar Oil Limited – – 8.41 – – – 8.41 –
Essar Shipping Limited – – 1,622.25 1,291.27 – – 1,622.25 1,291.27
Essar Heavy Engineering Services – – 22.64 45.02 – – 22.64 45.02
Essar Shipping & Logistics Limited – – 24.25 – – – 24.25 –
Essar Offshore Subsea Limited – – 21.58 – – – 21.58 –
Miscellaneous income
Essar Logistics Limited – – 12.09 – – – 12.09 –
Essar Ports Limited 210.00 – – – – – 210.00 –
Essar Bulk Terminal (Salaya) Limited – – 348.77 – – – 348.77 –
Essar Bulk Terminal Paradip Limited – – 4.00 – – – 4.00 –
Arkay Holdings Limited – – 1.65 – – – 1.65 –
Essar Projects (India) Limited – – 6.14 – – – 6.14 –
Purchase of power
Bhander Power Limited – – 419.55 137.00 – – 419.55 137.00
Consultancy services received
Essar Ports Limited 199.50 – – – – – 199.50 –
Essar Engineering Services Limited – – 0.72 – – – 0.72 –
Essar Investments Limited – – 209.23 11.25 – – 209.23 11.25
Vadinar Oil Terminal Limited – – – 22.29 – – – 22.29
Aegis Limited – – 68.63 1.19 – – 68.63 1.19
Essar Information Technology Limited – – 0.72 – – – 0.72 –
Essar Services India Limited – – 45.63 – – – 45.63 –
Freight charges
Essar Logistics Limited – – – 5.36 – – – 5.36
Business promotion expenses
Essar Steel India Limited – – 1.92 – – – 1.92 –
Travel expenses
Futura Travels Limited – – 63.05 14.78 – – 63.05 14.78
Essar Steel India Limited – – 2.30 1.57 – – 2.30 1.57
Essar Oil Limited – – – 0.17 – – – 0.17
Essar House Services Limited – – 0.05 – – – 0.05 –
Arkay Holdings Limited – – 0.37 – – – 0.37 –
Insurance
Essar Logistics Limited – – 6.06 – – – 6.06 –
(Rs. in lakhs)
Nature of Transaction Holding and subsidiary Other related Key management
company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
178 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding and subsidiary Other related Key management
company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Employees accommodation expenses
Essar Steel India Limited – – 12.51 9.92 – – 12.51 9.92
Hire charges
Essar Projects (India) Limited – – – 342.59 – – – 342.59
Essar Logistics Limited – – 363.77 0.29 – – 363.77 0.29
Essar Ports Limited 571.20 – – – – – 571.20 –
Rent
Essar House Limited – – 22.08 – – – 22.08 –
Interest on unsecured loan
Essar Ports Limited – 117.24 – – – – – 117.24
Essar Logistics Limited – – – 12.80 – – – 12.80
Vadinar Ports & Terminals Limited – – 146.10 124.01 – – 146.10 124.01
Interest others
Bhander Power Limited – – 12.97 3.63 – – 12.97 3.63
Essar Logistics Limited – – 9.45 – – – 9.45 –
Interest earned on inter corporate deposits / delayed payments
Essar Steel India Limited – – – 351.94 – – – 351.94
Essar Oilfield Services (India) Limited – – – 24.52 – – – 24.52
Essar Shipping & Logistics Limited – – 1.03 – – – 1.03 –
Reimbursement of expenses
Essar Ports Limited 319.00 – – – – – 319.00 –
Essar Investments Limited – – – 0.77 – – – 0.77
Essar Bulk Terminal Paradip Limited – – – 20.68 – – – 20.68
Essar Logistics Limited – – – 14.32 – – – 14.32
Essar Steel India Limited – – 0.93 – – – 0.93 –
Essar Dredging Limited – 1.33 – – – – – 1.33
Essar Bulk Terminal Paradip Limited – – 0.10 – – – 0.10 –
Subhas Das – – – – 14.58 3.88 14.58 3.88
Printing & stationery
Essar Infrastructure Services limited – – 0.23 – – – 0.23 –
Staff welfare
Essar Infrastructure Services limited – – 0.39 – – – 0.39 –
Essar Steel India Limited – – 5.00 – – – 5.00 –
Bank charges & commitment fees recovered
Essar Steel India Limited – – 210.10 – – – 210.10 –
Essar Heavy Engineering Services – – 3.25 – – – 3.25 –
Arkay Holdings Limited – – 3.55 – – – 3.55 –
Advance towards investment in shares
Essar Bulk Terminal Paradip Limited – – – 50.00 – – – 50.00
Unsecured loan received
Essar Ports Limited – 200.00 – – – – – 200.00
Vadinar Ports & Terminals Limited – – – 1,650.00 – – – 1,650.00
Guarantee given by others on behalf of Company
Essar Steel India Limited – – 2,500.00 – – – 2,500.00 –
Essar Ports Limited 17,500.00 25,000.00 – – – – 17,500.00 25,000.00
179
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
(Rs. in lakhs)
Nature of Transaction Holding and subsidiary Other related Key management
company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Advances received
Essar Bulk Terminal (Salaya) Limited – – – 3,500.00 – – – 3,500.00
The outstanding balance as on
March 31, 2012
Sundry creditors
Essar Steel India Limited – – 343.18 300.77 – – 343.18 300.77
Essar Logistics Limited – – 1,074.61 1,025.63 – – 1,074.61 1,025.63
Essar House Limited – – 44.15 – – – 44.15 –
Essar House Services Limited – – 0.05 – – – 0.05 –
Essar Heavy Engineering Services – – 2.70 – – – 2.70 –
Futura Travels Limited – – 84.84 1.02 – – 84.84 1.02
Essar Investments Limited – – 576.87 0.77 – – 576.87 0.77
Essar Engineering Services Limited – – 3.97 197.98 – – 3.97 197.98
Essar Infrastructure Services limited – – 166.01 – – – 166.01 –
Essar Oil Limited – – 1.76 (0.12) – – 1.76 (0.12)
Aegis Limited – – 8.88 0.09 – – 8.88 0.09
Bhander Power Limited – – 258.99 14.46 – – 258.99 14.46
Essar Projects (India) Limited – – 5,074.22 3,991.06 – – 5,074.22 3,991.06
Vadinar Oil Terminal Limited – – – 279.04 – – – 279.04
Essar Information Technology Limited – – 0.45 – – – 0.45 –
Arkay Holdings Limited – – 110.57 – – – 110.57 –
Total – – 7,751.25 5,810.70 – – 7,751.25 5,810.70
Other current liabilities
Essar Services India Limited – – 91.25 – – – 91.25 –
Loans and advances given
Essar Bulk Terminal Paradip Limited – – – 20.68 – – – 20.68
Essar Ports Limited 611.58 – – – – – 611.58 –
Essar Oil Limited – – 0.27 – – – 0.27 –
Essar Group Salary-EIL – – 18.09 – – – 18.09 –
Subhas Das – – – – 0.73 – 0.73 –
Essar Agrotech Limited – – 0.74 – – – 0.74 –
Total 611.58 – 19.10 20.68 0.73 – 631.41 20.68
Other current assets
Essar Investments Limited – – 343.48 – – – 343.48 –
Essar Ports Limited 319.00 – – – – – 319.00 –
Total 319.00 – 343.48 – – – 662.48 –
Advances received
Essar Bulk Terminal (Salaya) Limited – – 1,689.67 3,500.00 – – 1,689.67 3,500.00
Deposits given
Essar Shipping Limited – – 150.00 150.00 – – 150.00 150.00
Advances towards share application
money given
Essar Bulk Terminal Paradip Limited – – – 50.00 – – – 50.00
Share application money
Essar Steel India Limited – – – 1,791.70 – – – 1,791.70
Total – – – 1,791.70 – – – 1,791.70
180 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding and subsidiary Other related Key management
company parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Unsecured loan
Vadinar Ports & Terminals Limited – – – 1,200.00 – – – 1,200.00
Total – – – 1,200.00 – – – 1,200.00
Interest payable on loan
Vadinar Ports & Terminals Limited – – 29.77 – – – 29.77 –
Total – – 29.77 – – – 29.77 –
Interest accrued but not due on loan
Vadinar Ports & Terminals Limited – – – 111.61 – – – 111.61
Total – – 111.61 – – – 111.61
Capital advances
Essar Dredging Limited – 1.78 – – – – – 1.78
Total – 1.78 – – – – – 1.78
Investments in shares
Bhander Power Limited – – 104.22 104.22 – – 104.22 104.22
Essar Dredging Limited – – – 5.00 – – – 5.00
Essar Bulk Terminal Paradip Limited – – 58.84 0.66 – – 58.84 0.66
Total – – 163.06 109.88 – – 163.06 109.88
Sundry debtors
Essar Logistics Limited – – 2,211.93 – – – 2,211.93 –
Essar Heavy Engineering Services Limited – – 7.56 7.52 – – 7.56 7.52
Essar Steel India Limited – – 5,492.39 3,479.03 – – 5,492.39 3,479.03
Essar Shipping Limited – – 1,693.71 947.90 – – 1,693.71 947.90
Essar Oil Limited – – 9.10 – – – 9.10 –
Essar Shipping & Logistics Limited – – 27.78 – – – 27.78 –
Essar Offshore Subsea Limited – – 2.40 – – – 2.40 –
Essar Bulk Terminal Paradip Limited – – 3.97 – – – 3.97 –
Essar Ports Limited 214.64 – – – – – 214.64 –
Arkay Holdings Limited – – 1.82 – – – 1.82 –
Essar Dredging Limited – – 0.99 – – – 0.99 –
Essar Projects (India) Limited – – 6.77 – – – 6.77 –
Total 214.64 – 9,458.42 4,434.45 – – 9,673.06 4,434.45
Guarantee availed for loan taken
Essar Ports Limited 17,500.00 37,370.00 – – – – 17,500.00 37,370.00
Essar Steel India Limited – – 2,500.00 – – – 2,500.00 –
Total 17,500.00 37,370.00 2,500.00 – – – 20,000.00 37,370.00
37 DEFERRED TAX LIABILITY/ (ASSET) (NET) The components of deferred tax asset and liabilities are as follows:
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Deferred tax liability
Depreciation on fixed assets (A) 2,502.65 1,176.86
Deferred tax assets
Net deferred tax liability /(asset) (A-B) 2,502.65 15.88
181
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
38 EMPLOYEE BENEFITS:
Accounting Standard (AS) 15 ‘Employee Benefits’ has been adopted by the Company effective from 1st April 2007. The
Company has classified the various benefits provided to employees as under:
I. Defined contribution plans
a. Provident fund
b. Group accident policy cover
During the year, the Company has recognized the following amounts in the statement of Profit and Loss and
Expenditure during construction:
(Rs. in lakhs)
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Employer’s contribution to provident fund 52.34 38.28
Group accident policy cover 1.37 1.03
II. Defined benefit plans
a. Contribution to Gratuity Fund
b. Provision for Compensated Absences (CA)
(A) Changes in present value of defined benefit obligation(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
For the year ended For the year ended
March 31, March 31, March 31, March 31, 2012 2011 2012 2011
Present value of defined benefit obligation
at the beginning of the year 74.10 42.22 108.44 92.35
Current service cost 10.92 8.23 21.70 1.09
Interest cost 5.92 3.12 8.39 7.07
Planned Amendment – 21.54 – –
Benefits paid (0.19) (4.41) (7.12) (3.46)
Actuarial (gain)/loss on obligations 37.33 3.40 72.53 11.39
Present value of defined benefit obligation
at the end of the year 128.08 74.10 203.94 108.44
(B) Changes in the fair value of plan assets(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
For the year ended For the year ended
March 31, March 31, March 31, March 31, 2012 2011 2012 2011
Fair value of plan assets at the beginning of the year 69.43 20.99 – –
Expected return on plan assets 7.43 3.69 – –
Actuarial gains / (losses) (0.82) (0.06) – –
Contributions by the employer 36.08 49.22 – 3.46
Benefits paid (0.19) (4.41) – (3.46)
Fair value of plan assets at the end of the year 111.93 69.43 – –
182 Annual Report 2011-12
Notes forming part of financial statements
(C) Amount recognized in the Balance Sheet
(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
For the year ended For the year ended
March 31, March 31, March 31, March 31, 2012 2011 2012 2011
Present value of defined benefit obligation
at the end of the year 128.06 74.09 203.93 108.44
Fair value of plan assets at the end of the year 111.92 69.43 – –
Funded status [surplus/ (deficit)] (16.13) (4.66) (203.93) (108.44)
Liability/(asset) recognized in the balance sheet 16.14 4.50 203.93 108.44
(Included in note no. 6 & 9 of liability in Balance Sheet)
(D) Expenses recognized in the Statement of Profit and Loss and Expenditure during construction
(Rs. in lakhs)
Particulars Gratuity (funded) CA (non funded)
For the year ended For the year ended
March 31, March 31, March 31, March 31, 2012 2011 2012 2011
Current service cost 10.92 8.23 21.70 1.09
Interest cost 5.92 3.12 8.39 7.07
Expected return on plan assets (7.43) (3.69) – –
Past service cost 0.16 21.38 – –
Net actuarial (gain)/loss recognized in the period 38.14 3.46 72.53 11.39
Total expenses recognized in the Statement
of Profit and Loss /Expenditure during
construction (Included in Employee benefit
expenses note no. 25) 47.71 32.50 102.62 19.55
(E) Experience history
(Rs. in lakhs)
Particulars Gratuity
Year ended (funded)
March 31, March 31, March 31,
2012 2011 2010
Defined Benefit Obligation at the end of the period (128.06) (74.09) (42.22)
Plan assets at the end of the year 111.92 69.43 20.99
Funded Status (16.14) (4.66) (21.23)
Experience Gain/(Loss) adjustments on plan liabilities (41.53) (4.40) (38.23)
Experience Gain/(Loss) adjustments on plan assets (0.82) (0.06) 0.03
Actuarial Gain/(Loss) due to change in Assumptions 4.21 1.00 (0.66)
183
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL LIMITED
(Rs. in lakhs)
Particulars CA
Year ended (non-funded)
March 31, March 31, March 31,
2012 2011 2010
Defined Benefit Obligation at the end of the period (203.93) (108.44) (92.35)
Plan assets at the end of the year – – –
Funded Status (203.93) (108.44) (92.35)
Experience Gain/(Loss) adjustments on plan liabilities (76.95) (12.46) (73.48)
Experience Gain/(Loss) adjustments on plan assets – – –
Actuarial Gain/(Loss) due to change on Assumptions 4.42 1.07 (6.54)
(F) Category of plan assets
The Company’s plan assets in respect of gratuity are funded through the group gratuity scheme administered by the
Life Insurance Corporation of India.
(G) Actuarial assumptions
In accordance with Accounting Standard (AS)15 (Revised), actuarial valuation as at the year end was done in
respect of the aforesaid defined benefit plans based on the following assumptions:
i) General Assumptions
Particulars Gratuity (Funded) CA (Non Funded)
For the year ended For the year ended
March 31, March 31, March 31, March 31, 2012 2011 2012 2011
Discount Rate (per annum) 8.50% 8.00% 8.50% 8.00%
Rate of return on plan assets
(for funded scheme) 8.50% 8.50% N.A. N.A.
Expected Retirement age of
employees (years) 58 58 58 58
Withdrawal rate of employees 8.00% 8.00% 8.00% 8.00%
Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%
ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-1996) Mortality table.
iii) Leave availment pattern
Sick leave balance as at the valuation date and each subsequent year following the valuation date will be availed by the
employee against future sick leave. The sick leave balance is not available for encashment.
Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the
employee is available for encashment on separation from the Company.
184 Annual Report 2011-12
Notes forming part of financial statements
39 The Company operates in only one segment of Ports and Terminal business and has only one geographical
segment – India.
40 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006 (the Act) and hence the disclosures as required under the said Act have not been furnished.
The Company is making effort to get confirmation from the suppliers as regards their status under the Act.
41 Previous year’s figures have been regrouped / reclassified wherever necessary to confirm to figures of the current year.
In terms of our report attached For and on behalf of the board
For Deloitte Haskins & Sells
Chartered Accountants
Gaurav J. Shah Subhas Das Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 29, 2012 May 29, 2012
185
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
BOARD OF DIRECTORS
Rajiv Agarwal
Director
K. K. Sinha
Director
Shailesh Sawa
Director
Capt. Rajen Sachar
Executive Director
ESSAR BULK TERMINAL (SALAYA) LIMITED
REGISTERED OFFICE
27th KM.
Surat-Hazira Road
Hazira
Gujarat 394 270
AUDIT COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi
Mumbai 400 034
186 Annual Report 2011-12
Directors’ Report Directors’ Report
The Directors have pleasure in presenting the Fifth Annual Report together with the Audited Accounts of the Company for
the year ended March 31, 2012.
FINANCIAL RESULTS
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Total Expenditure 36.77 11.64
Net Profit / (Loss) (36.77) (11.64)
PROJECT REVIEW AND OPERATIONAL HIGHLIGHTS
Your Company is setting up a green field port capable of handling 20 million metric tons of cargo per annum. The port is
expected to be completed by September 2013.
The work of construction of the jetty is in progress. Your Company has already commissioned the Emergency Coal
Feeding and Stacker cum Reclaimer in the coal stockyard.
Dredging operations in the 14 km long Salaya Channel is in progress and the conveyor is also in advanced stage of
completion.
DIVIDEND
Since your Company has not commenced operations, your Directors have not recommended any dividend on equity
shares and the 0.01% Compulsorily Convertible Cumulative Preference Shares for the period under review.
FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year under review.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,
Shri. K. K. Sinha, retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for
re-appointment.
Capt. Rajen Sachar and Shri. Dipankar have been appointed as Additional Directors in the wholetime employment of
the Company designated as Executive Director and Managing Director respectively. They hold office upto the date of
the ensuing Annual General Meeting. The Company has received a notice from a member proposing the candidature of
Capt. Rajen Sachar and Shri. Dipankar Pal as Directors of the Company.
AUDITORS
Your Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registered
No.117365W retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. It
is proposed to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad as the Auditors of the
Company from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.
HOLDING COMPANY
Your Company is the subsidiary of Essar Ports Limited.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPOTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the
Report of Board of Directors), Rules 1988, relating to Energy Conservation and Technology Absorption are not applicable
to your Company.
Your Company did not earn nor did it spend any foreign exchange during the year.
187
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
PARTICULARS OF EMPLOYEES
There are no employees of the Company who received
remuneration as prescribed under Section 217(2A) of
the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state
that:
(a) in preparation of the annual accounts, the applicable
accounting standards have been followed and there
have been no material departures;
(b) the Directors have selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the
financial year;
(c) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
and
(d) the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS
Your Directors express their sincere thanks and
appreciation to all the employees for their commendable
teamwork and contribution to the growth of the Company.
Your Directors also thank Gujarat Maritime Board, its
Bankers and other business associates for their continued
support and co-operation during the year.
For and on behalf of the Board
Rajen Sachar Shailesh Sawa
Mumbai Executive Director Director
August 29, 2012
188 Annual Report 2011-12
Auditors’ Report
TO THE MEMBERS OF
ESSAR BULK TERMINAL (SALAYA) LIMITED
1. We have audited the attached Balance Sheet of
ESSAR BULK TERMINAL (SALAYA) LIMITED (“the
Company”) as at 31st March, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of
the Company for the year ended on that date, both
annexed thereto. These financial statements are
the responsibility of the Company’s Management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those Standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and the
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
the significant estimates made by the Management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central
Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure
a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to
in paragraph 3 above, we report as follows:
a. we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit;
b. in our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books;
c. the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by
this report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956;
e. in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2012;
(ii) in the case of the Statement of Profit and
Loss, of the loss of the Company for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
5. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken
on record by the Board of Directors, none of the
Directors is disqualified as on 31st March, 2012 from
being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
Mumbai (Membership No. 31544)
May 26, 2012
189
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
Annexure to the Auditors’ Report
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company’s
business/activities/result, clauses (viii), (xii), (xiii), (xiv),
(xv), (xviii), (xix), (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets.
(b) The fixed assets were physically verified during
the year by the Management in accordance
with a regular programme of verification which,
in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals.
According to the information and explanation
given to us, no material discrepancies were
noticed on such verification.
(c) There was no disposal of fixed assets during
the year.
(iii) The Company does not have inventory in the current
financial year; hence, provisions of clause (ii) of the
Order are not applicable.
(iv) The Company has neither granted nor taken any
loans, secured or unsecured, to/from companies,
firms or other parties listed in the Register
maintained under Section 301 of the Companies
Act, 1956. Hence, provisions of clauses (iii) (b) to (iii)
(g) of the Order are not applicable to the Company.
(v) In our opinion and according to the information and
explanations give to us, there are adequate internal
control systems commensurate with the size of
the company and the nature of its business with
regard to purchases of fixed assets. The nature
of the Company’s activities is such that it did not
require purchase of inventory or sale of good and
services. During the course of our audit, we have
not observed any major weakness in such internal
control system.
(vi) In our opinion and according to the information and
explanations given to us, there are no contracts or
arrangements that need to entered into the register
maintained in pursuance of Section 301 of the
Companies Act, 1956. Hence the provision of clause
(v) of the Order is not applicable to the company.
(vii) According to the information and explanations given
to us, the Company has not accepted any deposit
from the public during the year. Hence the provision
of clause (vi) of the Order is not applicable to the
company.
(viii) In our opinion, the internal audit system of the
Company is commensurate with the size of the
Company and the nature of its business.
(ix) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company has been regular in depositing
undisputed dues, including Provident Fund,
Income-tax, Service Tax, Custom Duty, Cess
and other material statutory dues applicable
to it with the appropriate authorities. Except
in case of Professional tax and Service tax
where certain instances of delay have been
observed. As informed to us, the provisions
for Investment Education and Protection Fund,
Employee’s State Insurance, Sales Tax, Wealth
Tax and Excise duty were not applicable to
the Company during the year.
(b) There were no undisputed amounts payable
in respect of above statutory dues in arrears
as at 31st March, 2012 for a period of more
than six months from the date they became
payable.
(c) There was no due pending to be deposited on
account of any dispute in respect of Income-
tax, Service Tax, Custom Duty and Cess as
on 31st March, 2012.
(x) The Company has been registered for a period less
than five years. Hence the provision of clause (x) of
the Order is not applicable to the Company.
(xi) In our opinion and according to the information
and explanations given to us, the Company has
not defaulted in the repayment of dues to banks
and financial institutions. The Company has not
borrowed any money by way of debentures.
(xii) In our opinion and according to the information and
explanations given to us, the term loans have been
applied for the purposes for which they were obtained,
other than temporary deployment pending application.
(xiii) On the basis of an overall examination of the
balance sheet as at 31st March, 2012 and the
cash flow statement of the Company for the year
then ended and according to the information and
explanation given to us, we report that funds raised
on short-term basis amounting to Rs. 170.62 lakhs
have, prima facie, been used for long term purpose.
(xiv) To the best of our knowledge and according to the
information and explanations given to us, no fraud by
the Company and no material fraud on the Company
has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 26, 2012
190 Annual Report 2011-12
Notes forming part of financial statementsBalance Sheet as at March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants
Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa Partner Executive Director Director
Mumbai Mumbai May 26, 2012 May 26, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
I. EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 20,807.85 13,000.49
(b) Reserves and surplus 4 (53.45) (16.68)
20,754.40 12,983.81
2 Non-current liabilities
(a) Long-term borrowings 5 40,067.79 18,972.88
(b) Other long-term liabilities 6 3,549.27 6,359.76
(c) Long-term provisions 7 23.55 20.17
43,640.61 25,352.81
3 Current liabilities
(a) Other current liabilities 8 1,442.48 5,657.77
(b) Short-term provisions 9 2.17 1.83
1,444.65 5,659.60
Total 65,839.66 43,996.22
II. ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets 10 48.51 –
(iii) Capital work-in-progress 11 49,067.48 23,902.17
(b) Loans and advances 12 15,319.00 19,163.13
(c) Other non-current assets 13 130.64 73.15
64,565.63 43,138.45
2 Current assets
(a) Cash and bank balance 14 216.52 547.64
(b) Loans and advances 15 569.72 300.99
(c) Other current assets 16 487.79 9.14
1,274.03 857.77
Total 65,839.66 43,996.22
See accompanying notes forming part of the financial statements
191
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
Statement of Profit and Loss for the year ended March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
(Rs. in lakhs)
Particulars Note For the year ended For the year ended
No. March 31, 2012 March 31, 2011
I. REVENUE FROM OPERATIONS – –
II. Other income – –
III. Total Revenue (I + II) – –
IV. EXPENSES:
Administration and other expenses 17 36.77 11.64
V. Total Expenses 36.77 11.64
VI. Profit before tax (III-V) (36.77) (11.64)
VII. Tax expenses – –
VIII. Loss for the year (VI - VII) (36.77) (11.64)
IX. Earnings per equity share (face value of Rs.10/- each)
(1) Basic and diluted 21 (1.27) (0.41)
See accompanying notes forming part of the financial statements
192 Annual Report 2011-12
Notes forming part of financial statementsCash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
(I) CASH FLOW FROM OPERATING ACTIVITY
Profit (Loss) before exceptional / extraordinary items for the year (36.77) (11.64)
Adjustment for :
Share issue expense written off 17.47 9.14
Operating loss before working capital changes (19.30) (2.50)
Income tax paid (15.29) (33.74)
Income tax refund 0.23 –
Net cash used in operating activity (I) (34.36) (36.24)
(II) CASH FLOW FROM INVESTING ACTIVITY
Capital work-in-progress and capital advances (14,814.98) (39,203.12)
Purchase of fixed assets (55.69) –
Purchase of current investments (2,900.00) (19,013.20)
Sale of current investments 2,913.29 19,110.87
Loans and advances to body corporate (55.26) –
(Increase) / decrease in loans and advances and other current assets (1,332.80) (359.66)
Increase / (decrease) in current liabilities and provisions 826.98 821.05
Fixed deposits placed with banks (8.00) –
Interest income on fixed deposits 6.91 11.40
Interest received on deposits given to body corporates 5.84 –
Net cash flow used in investing activity (ii) (15,413.71) (38,632.66)
(III) CASH FLOW FROM FINANCING ACTIVITY
Interest and finance cost (4,061.03) (2,330.77)
Proceeds from issue of preference shares 2,800.00 12,700.00
Share application money received – 5,007.36
Proceeds from unsecured loans – 40.00
Repayment of unsecured loans – (2,165.00)
Acceptance of bills payable 3,655.06 11,622.64
Payment of bills payable on maturity (6,776.21) (5,275.38)
Proceeds from secured loans 19,574.43 18,938.38
Share issue expenses (83.30) (56.70)
Net cash flow from financing activity (iii) 15,108.95 38,480.53
Net increase / (decrease) in cash and cash equivalents (i + ii + iii) (339.12) (188.37)
Opening cash and cash equivalents 547.64 736.01
Closing cash and cash equivalents 208.52 547.64
193
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Rajen Sachar Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
Cash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Note:
1. Reconciliation between closing cash and cash equivalents and
cash and bank balance
Closing cash and cash equivalents as per cash flow statement 208.52 547.64
Add: bank deposit not considered as cash equivalents as per AS-3 8.00 –
Closing cash and bank balance as per note no. 14 216.52 547.64
2. Closing cash and cash equivalents include bank deposits of Rs. 8.33 lakhs which has lien marked against
guarantee facility provided by the banks.
3. Non - Cash Transaction
During the current year, the Company has issued 5,00,73,630 - 0.01% compulsorily convertible cumulative
participating preference shares of Rs.10/- each for Rs. 5,007.36 lakhs against share application money received in
previous year.
See accompanying notes forming part of the financial statements
194 Annual Report 2011-12
Notes forming part of financial statements
1 CORPORATE INFORMATION
Essar Bulk Terminal (Salaya) Limited (EBTSL), a company
incorporated under the Companies Act, 1956 is setting
up a world class marine infrastructure with state-of-the-art
material handling facility capable of handling 20 MMTPA
cargo. The Jetty will be located in the Salaya harbour near
Jamnagar district in the State of Gujarat. Presently, EBTSL
is developing one berth with associated material handling
facilities to handle imported coal for the upcoming power
plants – Essar Power Gujarat Limited and Vadinar Power
Company Limited and export of Pet Coke for Essar Oil
Limited. In future EBTSL has plans to develop the port
facility to be capable of handling imported Lime Stone,
Fertilizers, Crude and export of Pet Coke, Petrochemicals,
POL products and Bauxite.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Accounting
The financial statements are prepared under the historical
cost convention, on accrual basis of accounting, and
are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956.
2.2 Use of Estimates
The preparation of financial statements requires estimates
and assumptions to be made that affect the reported
amount of assets and liabilities on the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognised in the period in which the
results are known / materialised.
2.3 Tangible Fixed Assets, Depreciation/Amortisation
Fixed assets are recorded at cost less accumulated
depreciation and impairment loss, if any. Cost is
inclusive of non-refundable duties and taxes and cost
of construction including erection, installation and
commissioning expenses, borrowing costs, expenditure
during construction, inseparable know how costs, gains
or loss earned / incurred during the trial run and other
incidental costs, where applicable.
Depreciation on additions / deductions to fixed assets
made during the year is provided on a pro-rata basis from
/ up to the date of such additions / deductions, as the
case may be.
2.4 Capital Work in Progress and Expenditure During
Constructions
Direct expenditure on asset under construction is shown
under capital work-in-progress.
Project management consultancy, technical fees and other
expenditure incidental to the construction of jetty that take
substantial period of time to get ready for their intended
use are accumulated as expenditure during construction
pending allocation to fixed assets and other accounts, as
applicable on completion of the project.
Advances on capital account include progress / milestone
based payments made under the contracts for projects,
assets under construction and other capital advances until
the same are allocated to fixed assets and other accounts,
as applicable and the same is shown under long term
loans and advances.
2.5 Borrowing Cost
Borrowing costs that are directly attributable to the
acquisition, construction / development of qualifying asset
are amortised over the tenure of the loan and capitalised
as a part of cost of such asset till such time that the
asset is not capitalised; and is charged to the statement
of profit and loss thereafter. A qualifying asset is one that
necessary takes substantial period of time to get ready for
the intended use.
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of fixed assets
are amortised and charged to the statement of profit and
loss, over the tenure of the loan.
2.6 Foreign Currency Transactions
Transactions denominated in foreign currency are
accounted at the rate prevailing on the transaction
date. Monetary items denominated in foreign currency
are translated at the rate prevailing at the balance
sheet date. Gains / losses on conversion / translation /
settlement of foreign currency transactions are recognised
in the statement of profit and loss or expenditure during
construction, as applicable.
2.7 Taxes on Income
The provision for current taxation is computed in
accordance with the relevant tax regulations. Deferred
tax is recognised on timing differences between the
accounting and the taxable income for the period
and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognised and carried forward
to the extent that there is a reasonable certainty that
sufficient future taxable income will be available against
which such deferred tax assets can be realised in future.
Deferred tax assets relating to unabsorbed business
losses on unabsorbed depreciation are recognised when
195
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
there is a virtual certainty supported by the convincing
evidence that there will sufficient taxable profit to utilise
them.
2.8 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised in the accounts for present
obligations arising out of past events and would probably
require an outflow of economic resources, the amount of
which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or non
occurrence of one or more uncertain future events
not wholly within the control of the Company or a
present obligation that is not recognised because
a reliable estimate of the liability cannot be made
or likelihood of an outflow of resources is remote.
Contingent assets are not recognised or disclosed in the
financial statements.
2.9 Impairment of Assets
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss
and is recognised in the statement of profit and loss. If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset
is reflected at the recoverable amount but limited to the
carrying amount that would have been determined (net of
depreciation / amortisation) had no impairment loss been
recognised in prior accounting periods.
2.10 Employee Benefits
(a) The Company (employer) and the employees
contribute a specified percentage of eligible
employees’ salary- currently 12%, to the
employer established provident fund “Essar
Staff Provident Fund” set up as an irrevocable
trust by the Company. The Company is
generally liable for annual contributions and
any shortfall in the fund assets based on
government specified minimum rates of
return – currently @ 8.25%, and recognises
such provident fund liability, considering fund
as the defined benefit plan, based on an
independent actuarial valuation carried out at
every statutory year end.
(b) Provision for gratuity for staff is made on
actuarial valuation. Contribution in respect
of gratuity for staff is made to Life Insurance
Corporation of India based on demands
made. The Company also accounts for
gratuity liability based on an independent
actuarial valuation carried out at every
statutory year end.
(c) Contribution towards superannuation, funded
by payments to Life Insurance Corporation
of India, is a fixed percentage of the salary
of eligible employees under a defined
Contribution plan, and is charged to the
Statement of Profit and Loss.
(d) Provision for all compensated absences
of eligible employees is based on an
independent actuarial valuation.
196 Annual Report 2011-12
Notes forming part of financial statements
3 SHARE CAPITAL
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs No. of shares Rs. in lakhs
(a) Authorised
Equity shares of Rs. 10/- each 4,000,000 400.00 4,000,000 400.00
Preference shares of Rs 10/- each 246,000,000 24,600.00 127,000,000 12,700.00
25,000.00 13,100.00
Issued, subscribed and fully paid up
Equity shares of Rs. 10/- each 3,004,875 300.49 3,004,875 300.49
0.01% Compulsorily convertible cumulative
participating preference shares of Rs.10/- each 205,073,630 20,507.36 127,000,000 12,700.00
20,807.85 13,000.49
(b) Reconciliation of the shares outstanding
at the beginning and at the end of the
reporting period
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs No. of shares Rs. in lakhs
a) Equity shares of Rs. 10/- each
At the beginning of the year 3,004,875 300.49 3,004,875 300.49
Add: Issue of shares – – – –
Outstanding at the end of the year 3,004,875 300.49 3,004,875 300.49
b) 0.01% Compulsorily convertible cumulative
participating preference shares of Rs.10/- each
At the beginning of the year 127,000,000 12,700.00 3,004,875 300.49
Add: Issue of shares 78,073,630 7,807.36 127,000,000 12,700.00
Outstanding at the end of the year 205,073,630 20,507.36 130,004,875 13,000.49
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder
is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
(d) Terms / rights attached to Preference shares
(i) Fixed dividend on preference shares : the CCCPPS have fixed dividend of 0.01% p.a. from the date of
allotment on cumulative basis.
(ii) Participating Dividend : CCCPPS holders have the same rights to dividend as that of the equity share holder
over and above the fixed dividend.
(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs.10/- each at par at the
end of twenty years from the 28th March 2012. The CCCPPS holders shall have the option to convert
the CCCPPS into equity shares any time after the expiry of one year from the date of allotment of the
CCCPPS.
(iv) Equity shares issued upon conversion of the CCCPPS shall rank pari passu with the existing equity shares.
197
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
(e) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the
shareholding more than 5% shares in the company
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs % No. of shares Rs. in lakhs %
a) Equity shares of Rs. 10/- each
Essar Ports Limited (formerly
known as Essar Shipping
Ports & Logistics Limited),
the holding company 3,004,875 300.49 100.00% 3,004,875 300.49 100.00%
3,004,875 300.49 100.00% 3,004,875 300.49 100.00%
b) 0.01% Compulsorily convertible
cumulative participating preference
shares of Rs. 10/- each
Essar Ports Limited (formerly known
as Essar Shipping Ports & Logistics
Limited), the holding company 205,073,630 20,507.36 100.00% 127,000,000 12,700.00 100.00%
205,073,630 20,507.36 100.00% 127,000,000 12,700.00 100.00%
4 RESERVE AND SURPLUS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Deficit in statement of profit and loss
Opening balance (16.68) (5.04)
Add: loss for the year (36.77) (11.64)
Closing balance (53.45) (16.68)
5 LONG - TERM BORROWINGS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Secured long term borrowings
(i) Term loans from banks 27,836.00 12,275.38
(ii) Foreign currency buyers credit 12,231.79 6,697.50
Total 40,067.79 18,972.88
Note :
(a) Secured rupee term loan from bank carrying interest rates ranging from 14% to 17% (base rate +/- spread) per
annum. Repayment of term loan is in 36 quarterly installments from quarter ending June, 2014 to quarter ending
March, 2023.
(b) Foreign currency buyers credit carrying interest rate ranging from 2.62% to 3.62% (LIBOR plus spread) per annum.
Buyers credit facility are part of the consortium agreement will get converted into rupee term loan. Repayment
schedule is as per note (a) above
(c) Term loan and foreign currency buyers credit are secured by first mortgage and charge of all present and
future movable and immovable assets / properties of the Company. The loan is further secured by corporate
guarantee of Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited) for Rs. 67,960
lakhs.
198 Annual Report 2011-12
Notes forming part of financial statements
6 OTHER LONG - TERM LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Others
(i) Acceptances (issued under letters of credit issued in favour of the
company by lender banks and to be converted into term loans) 3,536.77 6,347.26
(ii) Retention money - capital creditors 12.50 12.50
Total 3,549.27 6,359.76
7 LONG - TERM PROVISIONS
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(A) Provision for employee benefits
(i) Provision for compensated absences
(refer note 25 ( B ) ) 11.12 9.56 1.27 1.01
(ii) Provision for gratuity (refer note 25 ( B ) ) 10.61 7.48 0.90 0.82
(B) Other provisions
(i) Provision for taxation (net of advance tax) 1.82 3.13 – –
Total 23.55 20.17 2.17 1.83
Less : amount disclosed under the head
“short term provisions” (refer note 9) – – 2.17 1.83
Total 23.55 20.17 – –
8 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Interest accrued but not due on borrowings
Foreign currency buyers credit 109.82 17.96
(B) Share Application money received pending allotment of securities** – 5,007.36
(C) Other payables
(i) Payable (refer note 23)
(a) For expense 398.95 453.83
(b) Payable on purchase of fixed assets 838.70 33.48
(ii) Other liabilities (statutory dues for tax deducted at source,
provident fund and reimbursement expenses dues to employees) 95.01 145.14
Total 1,442.48 5,657.77
** During the previous year, share application money received in excess of authorised share capital which is classified
as part other current liabilities.
9 SHORT TERM PROVISIONS (Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Provision for employee benefits (refer note 7) 2.17 1.83
Total 2.17 1.83
199
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
10
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200 Annual Report 2011-12
Notes forming part of financial statements
11 CAPITAL WORK-IN-PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Capital work-in-progress 38,224.41 20,680.98
(B) Expenditure during the construction (see below) 10,843.07 3,221.19
Total 49,067.48 23,902.17
Expenditure During Construction As at March Incurred As at
31, 2011 During the Year March 31, 2012
Survey charges 21.56 – 21.56
Consultancy and professional fees 309.55 651.35 960.90
Travelling and courier expenses 14.81 91.01 105.82
Insurance expenses 38.67 0.05 38.72
Finance cost 1,903.88 4,287.98 6,191.86
Employee cost 208.03 338.21 546.24
Loss on foreign currency transaction and translation 34.50 1,520.48 1,554.98
Other expenses 764.07 1,040.81 1,804.89
Depreciation – 7.18 7.18
3,295.07 7,937.07 11,232.15
Less: Other income (interest on fixed deposit,
profit on sale of unit of mutual fund and support
services (net of tax) (73.88) (315.20) (389.08)
Total expenditure during the construction 3,221.19 7,621.87 10,843.07
12 LOANS AND ADVANCES
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Unsecured, considered good
(A) Capital advance
– To related parties (refer note 26) 12,810.83 18,319.75 – –
– To others 957.20 – – –
(B) Security deposit 134.51 1.51 – –
(C) Loans & advances to related parties
(refer note 26)
(i) For expense 556.05 – 307.73 5.32
(D) Prepaid expense - unamortised borrowing cost 381.13 467.07 176.88 293.31
(E) Balance with excise authorities 474.53 374.80 – –
(F) Advance tax (net of provision) 4.75 – – –
Total 15,319.00 19,163.13 484.61 298.63
Less: Amount disclosed under the head
“loans and advances” (refer note 15) – – 484.61 298.63
Total 15,319.00 19,163.13 – –
201
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
13 OTHER NON CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Others
(i) Share issue expenses
(pending for amortisation) 130.64 73.15 17.47 9.14
Total 130.64 73.15 17.47 9.14
Less : Amount disclosed under the head
“other current assets” (refer note 16) 17.47 9.14
Total 130.64 73.15 – –
14 CASH & BANK BALANCE
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Cash and cash equivalents
(i) Bank balances in current Accounts 200.36 303.50
(iii) Margin money
– In time deposits (lien against facility of bank guarantee)
with maturity of less than 3 months 8.16 244.14
208.52 547.64
(B) Other cash and bank balances
(i) Margin money
– In time deposits (lien against facility of bank guarantee)
with maturity of more than 3 months and less than 12 months. 8.00 –
Total 216.52 547.64
15 LOANS AND ADVANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Loans and advances to related parties (refer note 26)
(i) Inter corporate deposits (including interest accrued but not due) 55.26 –
(ii) Advances for expense (refer note 12) 307.73 5.32
(B) Other loans and advances
(i) Advances to vendor 29.85 2.36
(ii) Prepaid expense (refer note 12) 176.88 293.31
Total 569.72 300.99
16 OTHER CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Others
(i) Other receivables 469.94 –
(ii) Share issue expenses (refer note 13) 17.47 9.14
(iii) Interest accrued on time deposits 0.38 –
Total 487.79 9.14
202 Annual Report 2011-12
Notes forming part of financial statements
17 ADMINISTRATION & OTHER EXPENSE
(Rs. in lakhs)
Particulars For the For the
Year ended Year ended
March 31, 2012 March 31, 2011
1) Remuneration to statutory auditors
(i) for audit fees 1.00 1.00
(ii) for other assurance services 18.00 1.50
(iii) for reimbursement of expenses 0.30 –
2) Share issue expenses written off 17.47 9.14
Total 36.77 11.64
18 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Unpaid dividend on preference shares issued 1.77 0.56
(B) Estimated amount of contract remaining to be executed on
capital account and not provided for tangible fixed assets 38,566.18 34,732.01
Total 38,567.95 34,732.57
19 EXPENDITURE IN FOREIGN CURRENCY
(Rs. in lakhs)
Particulars For the For the
Year ended Year ended
March 31, 2012 March 31, 2011
Travelling expenses 0.08 –
Total 0.08 –
20 EXPOSURE IN FOREIGN CURRENCY
The Company has not entered into any forward / option exchange contract to hedge its foreign currency exposure.
The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are
given below:
Amount payable on account of foreign currency :
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Amount in lakhs Amount in lakhs
INR USD INR USD
(A) Buyers credit 12,231.79 239.11 6,697.50 150.00
(B) Interest payable on buyers credit 109.82 2.15 17.96 0.40
(C) Import of equipment 45.77 0.89 – –
Total 12,387.38 242.15 6,715.46 150.40
203
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
21 EARNINGS PER SHARE
Particulars For the For the
Year ended Year ended
March 31, 2012 March 31, 2011
Earnings / (loss) for the year for the purpose of earning per share
(Rs. in lakhs) (net loss for the year) (36.77) (11.64)
Unpaid dividend on compulsorily convertible cumulative participating
preference shares (Rs. in lakhs) 1.28 0.56
Loss attributable to equity shareholders in (Rs. in lakhs) (38.05) (12.20)
No. of equity shares at the beginning of the year 3,004,875 3,004,875
No. equity shares issued during the year – –
No. of equity shares at the end of the year 3,004,875 3,004,875
Weighted average number of equity shares outstanding during the year 3,004,875 3,004,875
Earnings per share - basic (Rs.) (1.27) (0.41)
Face value per share (Rs.) 10.00 10.00
Note: 0.01% CCCPPS have not been considered for purpose of calculation of the weighted average number of
equity shares for dilution purposes as they are anti-dilutive.
22 SEGMENT REPORTING
The Company operates in only one segment of ports and terminals business and only one geographical segment
i.e. India.
23 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT
The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and
Medium Enterprise Development Act, 2006 and hence disclosures relating to amount unpaid as at the end of the
year, together with interest paid / payable as required under the said Act has not been furnished and provision for
interest, if any, on delayed payments, is not ascertainable at this stage.
24 CIF VALUE OF IMPORTED GOODS
(Rs. in lakhs)
Particulars For the For the
Year ended Year ended
March 31, 2012 March 31, 2011
CIF value of imports - capital goods 5,001.82 –
Total 5,001.82 –
25 EMPLOYEE BENEFITS
The Company has various employee benefits as under:
I. Defined contribution plans
a. Provident fund
b. Superannuation fund
During the year, the Company has recognised the following amounts in the statement of profit and loss /
expenditure during construction.
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(i) Employer’s contribution to provident fund 11.74 8.47
(ii) Employer’s contribution to superannuation fund – 0.25
(iii) Premium paid in respect of group life insurance cover 3.21 8.30
Total 14.95 17.02
204 Annual Report 2011-12
Notes forming part of financial statements
II. Defined benefit plans
a. Gratuity
b. Compensated absences (CA)
In accordance with Accounting Standard-15 (Revised 2005), relevant disclosures are as under:
(A) Changes in present value of defined benefit obligation
(Rs. in lakhs)
Particulars Gratuity (Non-funded) CA (non funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Present value of defined benefit
obligation at the beginning of the year 8.30 – 10.57 –
(ii) Current service cost 2.19 8.30 2.62 10.57
(iii) Interest cost 0.66 – 0.80 –
(iv) Plan amendments – – –
(v) Acquisitions / (transfers) – – – –
(vi) Benefits paid – – (1.22) (0.02)
(vii) Actuarial (gain) / loss on obligations 0.36 – (0.37) 0.02
Present value of defined benefit obligation
at the end of the year 11.51 8.30 12.40 10.57
(B) Amount recognised in the Balance Sheet(Rs. in lakhs)
Particulars Gratuity (Non-funded) CA (Non-funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Present value of defined benefit
obligation at the end of the year 11.51 8.30 12.39 –
(ii) Fair value of plan assets at the
end of the year – – – –
(iii) Funded status surplus / (deficit) (11.51) (8.30) (12.39) (10.57)
Of which :
Current 0.90 0.82 1.27 1.00
Non Current 10.61 7.48 11.12 9.57
11.51 8.30 12.39 10.57
Refer note 6 - long term provisions
(C) Expenses recognised in the statement of profit and loss / expenditure during the construction
(Rs. in lakhs)
Particulars Gratuity (Non-funded) CA (Non-funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Current service cost 2.19 8.30 2.62 1.09
(ii) Interest cost 0.66 – 0.80 –
(iii) Net actuarial (gain) / loss recognised
in the period 0.36 – (0.37) 9.50
Total 3.21 8.30 3.05 10.59
205
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
(D) Experience History
(Rs. in lakhs)
Particulars Gratuity (Non-funded) CA (Non-funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Defined benefit obligation (11.51) (8.30) (12.39) (10.57)
(ii) Funded status (11.51) (8.30) (12.39) (10.57)
(iii) Experience gain / (loss)
adjustments on plan liabilities (0.76) – (0.08) (9.50)
(iv) Actuarial gain / (loss) due to
change on assumptions 0.40 – 0.45 –
(E) Actuarial assumptions
i) General Assumption
(Rs. in lakhs)
Particulars Gratuity (Non-funded) CA (Non-funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(i) Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%
(ii) Rate of return on plan assets
(for funded scheme) 8.50% N.A. N.A. N.A
(iii) Expected retirement age of
employees (years) 58 58 58 58
(iv) Withdrawal rate of employees 8.00% 8.00% 8.00% 8.00%
(v) Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%
ii) Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality
table.
iii) Leave Policy
Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not
availed by the employee (maximum to the extent of 120 days) is available for encashment on separation from
the Company.
26 RELATED PARTY DISCLOSURE
A Holding Company:
Essar Global Limited, Cayman Islands (ultimate holding company)
Essar Shipping & Logistics Limited, Cyprus (intermediate holding company )
Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited), (immediate holding company)
B Fellow subsidiaries / other related parties / affiliated / where there have been transactions:
Aegis Limited
Essar Bulk Terminal Limited
Essar Bulk Terminal Paradip Limited
206 Annual Report 2011-12
Notes forming part of financial statements
Essar Engineering Services Limited
Essar House Limited
Essar Infrastructure Services Limited
Essar Investments Limited
Essar Logistics Limited
Essar Paradip Terminals Limited
Essar Power Gujarat Limited
Essar Projects (India) Limited
Essar Projects Management Consultants Limited
Essar Services India Limited
Futura Travels Limited
Global Supply FZE
The Mobile Store Limited
Vadinar Oil Terminal Limited
C Key management personnel:
Capt. Rajen Sachar - Executive Director (w.e.f. 17.10.2011)
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Allotment of 0.01% CCCPPS shares
Essar Ports Limited * 7,807.36 12,700.00 – – – – 7,807.36 12,700.00
Advance received towards share
application money
Essar Ports Limited * – 5,007.36 – – – – – 5,007.36
Repayment of loan
Essar Ports Limited * – 2,125.00 – – – – – 2,125.00
Deposit given
Essar House Limited – – 28.00 – – – 28.00 –
Essar Infrastructure Services Limited – – 105.00 – – – 105.00 –
Total – – – – – – 133.00 –
Purchase of fixed assets / C.W.I.P.
Essar projects (India) Limited – – 10,508.67 11,984.74 – – 10,508.67 11,984.74
Essar Engineering Services Limited – – 89.04 191.64 – – 89.04 191.64
Essar Logistics Limited – – 850.78 529.07 – – 850.78 529.07
Global Supply FZE – – 4,499.99 – – – 4,499.99 –
Total – – 15,948.48 12,705.45 – – 15,948.48 12,705.45
* formerly known as Essar Shipping Ports & Logistics Ltd.
207
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL (SALAYA) LIMITED
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Recovery of expenses
Essar Power Gujarat Limited – – 290.04 – – – 290.04 –
Interest Income on ICD
Essar Paradip Terminals Limited – – 5.84 – – – 5.84 –
Interest expense
Essar Ports Limited * – 31.60 – – – – – 31.60
Expenditure incurred during construction
Vadinar Oil Terminal Limited
(Administrative expenses) – – – 759.42 – – – 759.42
Aegis Limited – – 27.46 10.10 – – 27.46 10.10
Essar Ports Limited * 450.00 – – – – – 450.00 –
Futura Travels Limited – – 43.31 4.47 – – 43.31 4.47
Essar Bulk Terminal Limited – – 348.77 – – – 348.77 –
Essar Investments Limited – – 304.93 – – – 304.93 –
Essar House Limited – – 22.08 – – – 22.08 –
Essar Infrastructure Limited – – 83.85 – – – 83.85 –
Futura Aviation – – 77.00 – – – 77.00 –
Essar Engineering Services Limited – – 427.32 – – – 427.32 –
Essar Oil Limited – – 2.42 1.17 – – 2.42 1.17
Essar Power (Gujarat) Limited – – 19.65 – – – 19.65 –
Essar Projects (India) Limited – – 35.50 – – – 35.50 –
Essar Service India Limited – – 47.66 – – – 47.66 –
Total 450.00 – 1,439.95 775.16 – – 1,889.95 775.16
Deposit given
Essar Paradip Terminals Limited – – 50.00 – – – 50.00 –
Remuneration
Capt. Rajen Sachar # – – – – 22.12 – 22.12 –
* formerly known as Essar Shipping Ports & Logistics Ltd.
# figure does not include the amount payable gratuity and compensated absence by the Company as the same is calculated for the Company as a
whole on actuarial basis.
Outstanding as on March 31, 2012
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Capital advances (including
consultancy charges)
Essar Projects Management Consultants
Limited – – 38.88 38.88 – – 38.88 38.88
Essar Projects (India) Limited – – 11,081.57 14,348.58 – – 11,081.57 14,348.58
Essar Bulk Terminal Limited – – 1,689.67 3,500.00 – – 1,689.67 3,500.00
Global Supplies FZE – – – 432.30 – – – 432.30
Total – – 12,810.12 18,319.76 – – 12,810.12 18,319.76
208 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Loans and advances including
deposits given
Essar Ports Limited * 754.05 – – – – – 754.05 –
Essar House Limited - Deposit – – 28.00 – – – 28.00 –
Essar Infrastructure Services Limited - Deposit – – 105.00 – – – 105.00 –
Essar Bulk Terminal Paradip Limited – – 100.00 – – – 100.00 –
The Mobile Store Limited – – 0.35 – – – 0.35 –
Essar Paradip Terminal Limited – – 55.26 – – – 55.26 –
Total 754.05 – 288.61 – – – 1,042.66 –
Receivable
Essar Power Gujarat Limited – – 294.26 – – – 294.26 –
Retention money
Essar Projects Management Consultants
Limited – – 12.50 12.50 – – 12.50 12.50
Sundry creditors
Aegis Limited – – 4.75 9.09 – – 4.75 9.09
Essar Oil Limited – – 0.26 0.35 – – 0.26 0.35
Essar Logistics Limiyed – – 599.63 518.49 – – 599.63 518.49
Essar Bulk Terminal Paradip Limited – – – 1.93 – – – 1.93
Futura Travels Limited – – 9.41 4.43 – – 9.41 4.43
Global Supply FZE – – 45.77 – – – 45.77 –
Essar House Limited – – 1.85 – – – 1.85 –
Essar Infrastructure Services Limited – – 7.55 – – – 7.55 –
Vadinar Oil Terminal Limited – – 3.31 220.00 – – 3.31 220.00
Essar Investments Limited – – 134.58 – – – 134.58 –
Essar Service India Limited – – 40.95 – – – 40.95 –
Total – – 848.06 754.29 – – 848.06 754.29
Advance towards share
application money
Essar Ports Limited* – 5,007.36 – – – – – 5,007.36
Guarantees given by on behalf of
Company
Essar Ports Limited * 60,460.00 67,960.00 – – – – 60,460.00 67,960.00
* formerly known as Essar Shipping Ports & Logistics Ltd.
27 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year
classification as per the requirement of the revised schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
Capt. Rajen Sachar Shailesh Sawa
Executive Director Director
Mumbai
May 26, 2012
209
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
ESSAR BULK TERMINAL PARADIP LIMITED
Rajiv Agarwal
Director
K. K. Sinha
Director
Shailesh Sawa
Director
Capt. Rajesh Beri
Executive Director
REGISTERED OFFICE
Essar House
Opp. Gujarat College
Near Hotel Inder Residency
Ellisbridge
Ahmedabad
Gujarat - 380 006
AUDIT COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi
Mumbai - 400 034
210 Annual Report 2011-12
Directors’ Report
Your Directors have pleasure in presenting the third Annual Report together with the Audited Accounts of the Company
for the year ended March 31, 2012.
FINANCIAL RESULTS
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Rs. in lakhs)
Particulars For the year ended For the yearended
March 31, 2012 March 31, 2011
Total Expenditure 19.50 5.95
Gross Profit/(Loss) (19.50) (5.95)
Add: Balance in the Profit and Loss Account as per last Balance Sheet (7.38) (1.43)
Balance carried forward to Balance Sheet (26.88) (7.38)
PROJECT REVIEW AND OPERATIONAL HIGHLIGHTS
Your Company has undertaken a project of mechanisation of an existing berth on the central dock at the Paradip Port in
Odisha to handle dry bulk cargo, including iron ore with a capacity to handle upto 16 million metric tons per annum of
bulk cargo (the Project).
Paradip Port Trust (PPT) has granted your Company a licence for the mechanisation and operation of the berth. The
Project was awarded to the Company pursuant to a tender process by the PPT. The licence is valid for a period for 10
years and may be extended for a further period of five years. PPT has allocated approximately 230 metres of waterfront to
your Company for the mechanisation of the berth and operation of its facilities.
The berth has a length of 230 metres and a draft of 12.5 metres. The following facilities are being constructed:
bins with a capacity of 5,000 TPH is also being erected. Conveyor of about 7 kilometre has been erected.
under erection.
Your Company has entered into a long-term cargo handling agreement with Essar Steel India Limited for the entire period
of its licence for the mechanised berth at Paradip, under which your Company will handle the export of iron ore pellets
from Essar Steel’s pelletisation plant at Paradip.
Paradip port is connected to the four lane National Highway 5A and the East Coast Railway is 5 kilometres from the
port boundary. An additional railway link between Paradip to Haridaspur is being developed by Indian Railways, which
is expected to improve the competitiveness of the terminals at Paradip port as compared to other nearby ports. The
additional railway link is expected to be complete in 2015.
The Project is expected to be fully operational shortly.
DIVIDEND
Since your Company is yet to commence operations, your Directors have not recommended any dividend on the equity
shares and the 0.01% Compulsorily Convertible Cumulative Participating Preference Shares for the year under review.
FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year under review.
Directors’ Report
211
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
DIRECTORS
In accordance with the provisions of the Companies Act,
1956 and the Articles of Association of the Company, Shri.
K. K. Sinha retires at the ensuing Annual General Meeting
of the Company and being eligible, offers himself for re-
appointment.
During the year under review Capt. Rajesh Beri
has been appointed as a Director in the wholetime
employment of the Company designated as Executive
Director.
The Company has received a notice from a member under
Section 257 of the Companies Act, 1956, with requisite
deposit proposing the name of Capt. Beri as a candidate
for the office of Director of the Company.
AUDITORS
Your Company’s Auditors, M/s. Deloitte Haskins & Sells,
Chartered Accountants, Ahmedabad having Registered
No.117365W retire at the conclusion of ensuing Annual
General Meeting and are eligible for re-appointment. It
is proposed to re-appoint M/s. Deloitte Haskins & Sells,
Chartered Accountants, Ahmedabad as the Auditors of
the Company from the conclusion of this Annual General
Meeting until the conclusion of next Annual General
Meeting.
HOLDING COMPANY
Your Company is the subsidiary of Essar Ports Limited.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPOTION AND FOREIGN EXCHANGE EARNING
AND OUTGO
The provisions of Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosure of Particulars in
the Report of Board of Directors), Rules 1988, relating to
Energy Conservation and Technology Absorption are not
applicable to your Company.
As regards foreign exchange earnings and outgo, your
Company did not earn nor did it spend any foreign
exchange during the year.
PARTICULARS OF EMPLOYEES
There are no employees of the Company who received
remuneration as prescribed under Section 217(2A) of
the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state
that:
(a) in preparation of the annual accounts, the applicable
accounting standards have been followed and there
(b) the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
(c) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and for
and
(d) the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS
Your Directors express their sincere thanks and
appreciation to all the employees for their commendable
teamwork and contribution to the development of the
Project.
Your Directors also thank the Paradip Port Trust, its
Bankers and other business associates for their continued
support and co-operation during the year.
For and on behalf of the Board
K. K. Sinha Shailesh Sawa
Mumbai Director Director
May 26, 2012
212 Annual Report 2011-12
Auditors’ Report
AUDITORS’ REPORT
TO THE MEMBERS OF
ESSAR BULK TERMINAL PARADIP LIMITED
1. We have audited the attached Balance Sheet of
ESSAR BULK TERMINAL PARADIP LIMITED (“the
Company”) as at 31st March, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of
the Company for the year ended on that date, both
annexed thereto. These financial statements are
the responsibility of the Company’s Management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those Standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and the
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
the significant estimates made by the Management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central
Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure
a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to
in paragraph 3 above, we report as follows:
a. we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
b. in our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
c. the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by
this report are in agreement with the books of
d. in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
e. in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
i. in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
ii. in the case of the Statement of Profit and
Loss, of the loss of the Company for the
iii. in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
5. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken
on record by the Board of Directors, none of the
Directors is disqualified as on 31st March, 2011 from
being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 26, 2012
213
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company’s
business/activities/result, clauses (viii), (xii), (xiii), (xiv),
(xv), (xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets other
than assets under construction.
(b) The fixed assets were physically verified during
the year by the Management in accordance with
a regular programme of verification which, in our
opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According
to the information and explanation given to us,
no material discrepancies were noticed on such
verification.
(c) There was no disposal of fixed assets during the
year.
(iii) In respect of its inventory:
The Company does not have inventory in the current
Order are not applicable.
(iv) The Company has neither granted nor taken any
loans, secured or unsecured, to/from companies,
firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
Hence, the provisions of clause (iii) (b) to (iii) (g) of the
Order are not applicable to the Company.
(v) In our opinion and according to the information and
explanations given to us, there are adequate internal
control systems commensurate with the size of the
company and the nature of its business with regard
to purchase of fixed assets. The nature of the
Company’s activities is such that it did not require
purchase of inventory or sale of good and services.
During the course of our audit, we have not observed
any major weakness in such internal control system.
(vi) In our opinion and according to the information and
explanations given to us, there are no contracts or
arrangements that need to entered into the register
maintained in pursuance of Section 301 of the
Companies Act, 1956. Hence the provision of clause
(v) of the Order is not applicable to the company.
(vii) According to the information and explanations given
to us, the Company has not accepted any deposit
from the public during the year. Hence the provision
of clause (vi) of the Order is not applicable to the
company.
(viii) In our opinion, the internal audit system of the
Company is commensurate with the size of the
Company and the nature of its business.
(ix) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company has been regular in depositing
undisputed dues, including Provident Fund,
Income-tax, Service Tax, Custom Duty, Cess
and other material statutory dues applicable to it
with the appropriate authorities, except in case of
Professional tax and Works Contract Tax where
certain instances of delays have been observed.
As informed to us, the provisions for Investment
Education and Protection Fund, Employee’s State
Insurance, Sales Tax, Wealth Tax and Excise duty
were not applicable to the Company during the
year.
(b) There were no undisputed amounts payable in
respect of above statutory dues in arrears as at
31st March, 2012 for a period of more than six
months from the date they became payable.
(c) There was no due pending to be deposited on
account of any dispute in respect of Income-tax,
Service Tax, Custom Duty and Cess as on 31st
March, 2012.
(x) The Company has been registered for a period less
than five years. Hence the provision of clause (x) of
the Order is not applicable to the Company.
(xi) In our opinion and according to the information and
explanations given to us, the Company has not
defaulted in the repayment of dues to banks and
financial institutions. The Company has not borrowed
any money by way of debentures.
(xii) In our opinion and according to the information and
explanations given to us, the term loans have been
applied for the purposes for which they were obtained,
other than temporary deployment pending application.
(xiii) On the basis of an overall examination of the balance
sheet as at 31st March, 2012 and the cash flow
statement of the Company for the year then ended
and according to the information and explanation
given to us, we report that funds raised on short-term
basis amounting to Rs.2,249.43 lakhs have, prima
facie, been used for long term purpose.
(xiv) To the best of our knowledge and according to the
information and explanations given to us, no fraud by
the Company and no material fraud on the Company
has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 26, 2012
Annexure to the Auditors’ Report
214 Annual Report 2011-12
Balance Sheet as at March 31, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
(I) EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 11,605.00 6,605.00
(b) Reserves and surplus 4 (26.88) (7.38)
11,578.12 6,597.62
2 Non-current liabilities
(a) Long-term borrowings 5 30,973.19 9,445.18
(b) Other long-term liabilities 6 73.62 5,814.30
(c) Long-term provisions 7 16.42 1.97
31,063.23 15,261.45
3 Current liabilities
(a) Short-term borrowings 8 – 20.00
(b) Other current liabilities 9 6,599.64 3,456.86
(c) Short-term provisions 7 0.90 8.96
6,600.54 3,485.82
Total 49,241.89 25,344.89
(II) ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets 10 150.56 11.99
(ii) Capital work-in-progress 11 43,968.87 15,436.44
(b) Loans and advances 12 2,367.38 6,319.47
(c) Other non-current assets 13 44.07 31.24
46,530.88 21,799.14
2 Current assets
(a) Cash and bank balances 14 584.42 3,329.26
(b) Loans and advances 12 1,924.01 197.30
(c) Other current assets 13 202.58 19.19
2,711.01 3,545.75
Total 49,241.89 25,344.89
See accompanying notes forming part of financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Rajesh Beri Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
215
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
(Rs. in lakhs)
Particulars Note For the year ended For the year ended
No. March 31, 2012 March 31, 2011
I. REVENUE FROM OPERATIONS – –
II. Other income – –
III. Total Revenue (I + II) – –
IV. EXPENSES:
Establishment and other expenses 15 19.50 5.95
V. Total Expenses 19.50 5.95
VI. Loss for the Year (III-V) (19.50) (5.95)
VII. Earnings per share: 18
(1) Basic and diluted (40.34) (12.31)
See accompanying notes forming part of the financial statements
Statement of Profit and Loss for the year ended March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Rajesh Beri Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
216 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
CASH FLOW FROM OPERATING ACTIVITIES
Net loss as per statement of profit and loss (19.50) (5.95)
Adjustments for:
Share issue expenses 9.18 3.63
Cash generated from / (used in) operating activities (10.32) (2.32)
Income taxes refund / (paid) net (23.46) (2.76)
Net cash used in operating activities (33.78) (5.08)
CASH FLOW FROM INVESTING ACTIVITIES
Capital work in progress and capital advances (22,216.64) (18,878.87)
Purchase of fixed assets (139.59) (11.99)
Purchase of current investments (6,300.00) (6,200.19)
Proceeds from sale of current investments 6,335.54 6,226.08
Investment in bank deposit (250.00) (2,280.00)
Realisation of bank deposit 2,280.00 –
Interest received 14.75 1.29
Increase in loans and advances and other current assets (985.43) (834.11)
Increase / (decrease) in current liabilities and provision 4,017.93 1,113.53
Net cash flow from / (used in) investing activities (17,243.44) (20,864.26)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital 2,500.00 6,600.00
Proceeds from share application money 1,000.00 4,787.80
Share application money refunded (1,000.00) (2,287.80)
Bills accepted during the year 5,138.86 10,100.56
Bills repaid during the year (10,879.54) (4,481.24)
Interest and finance expenses (3,086.07) (1,743.17)
Proceeds from secured loan 22,936.63 9,443.40
Proceeds from unsecured loan – 228.97
Repayment of unsecured loan (20.00) (691.63)
Share issue expenses (27.50) (43.60)
Net cash flow from / (used in) financing activities 16,562.38 21,913.29
Cash Flow Statement for the year ended March 31, 2012
217
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
Net increase / (decrease) in cash and cash equivalents (714.84) 1,043.95
Cash and cash equivalents at the beginning of the year 1,049.26 5.31
Cash and cash equivalents at the end of the year
(refer reconciliation below) 334.42 1,049.26
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Note:
1 Reconciliation between closing cash and cash equivalents and cash
and bank balance as per cash flow statement.
Cash and cash equivalents as per cash flow statement 334.42 1,049.26
Less: Deposits with original maturity of more than 3 months but less
than 12 months not considered as cash equivalents as per AS-3 250.00 2,280.00
Cash and bank balances as per note 14 584.42 3,329.26
2 During the year, the Company has issued 25,000,000 0.01% compulsorily convertible cumulative participating
preference shares of Rs.10/- each for Rs.2500 lakhs against Share application money received.
3 Cash flow statement has been prepared under the indirect method as set out in Accounting Standard – 3 “Cash
Flow Statement” as notified under the Companies (Accounting Standards) Rules, 2006.
See accompanying notes forming part of financial statements
Cash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Capt. Rajesh Beri Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
218 Annual Report 2011-12
Notes forming part of financial statements
1 CORPORATE INFORMATION
Essar Bulk Terminal Paradip Limited (the Company) is a
public company domiciled in India and incorporated
under provision of Companies Act, 1956 with the
purpose of providing port and terminal handling services
and is running through pre-operation phase wherein it is
constructing jetty at Paradip.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Accounting
These financial statements are prepared under the
historical cost convention, on accrual basis of accounting,
and are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards (AS) referred to in Sub-section (3C)
of Section 211 of the Companies Act, 1956.
2.2 Use of Estimates
The preparation of financial statements requires estimates
and assumptions to be made that affect the reported
amount of assets and liabilities on the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognised in the period in which the
results are known / materialised.
2.3 Tangible Fixed Assets, Depreciation/Amortisation
Fixed assets are recorded at cost less accumulated
depreciation and impairment loss, if any. Cost is
inclusive of non-refundable duties and taxes and cost
of construction including erection, installation and
commissioning expenses, borrowing costs, expenditure
during construction, inseparable know how costs, gains
or loss earned/incurred during the trial run and other
incidental costs, where applicable.
Depreciation on additions / deductions to fixed assets
made during the year is provided on a pro-rata basis from/
up to the date of such additions / deductions, as the case
may be.
2.4 Capital Work-in-progress and expenditure during
constructions
Direct expenditure on asset under construction is shown
under capital work-in-progress.
Project management consultancy, technical fees and other
expenditure incidental to the construction of jetty that take
substantial period of time to get ready for their intended
use are accumulated as expenditure during construction
pending allocation to fixed assets and other accounts, as
applicable on completion of the project.
Advance on capital account include progress based
payments made under the contracts for assets under
construction and other capital advances until the same are
allocated to fixed assets and other accounts as applicable.
2.5 Borrowing Cost
Borrowing costs that are directly attributable to the
acquisition, construction / development of qualifying asset
are amortised over the tenure of the loan and capitalized
as a part of cost of such asset till such time that the
asset is not capitalised and is charged to the statement
of profit and loss thereafter. A qualifying asset is one that
necessary takes substantial period of time to get ready for
the intended use.
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of fixed assets
are amortized and charged to the statement of profit and
loss, over the tenure of the loan.
2.6 Foreign Currency Transactions
Transactions denominated in foreign currency are
accounted at the rate prevailing on the transaction
date. Monetary items denominated in foreign currency
are translated at the rate prevailing at the balance
sheet date. Gains / losses on conversion / translation /
settlement of foreign currency transactions are recognised
in the statement of profit and loss or expenditure during
construction, as applicable.
2.7 Taxation
The provision for current taxation is computed in
accordance with the relevant tax regulations. Deferred tax
is recognised on timing differences between the accounting
and the taxable income for the period and quantified using
the tax rates and laws enacted or substantively enacted
as on the balance sheet date. Deferred tax assets are
recognised and carried forward to the extent that there is
a reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets
can be realised in future. Deferred tax assets relating to
unabsorbed business losses on unabsorbed depreciation
are recognised when there is a virtual certainty supported
by the convincing evidence that there will sufficient taxable
profit to utilise them.
2.8 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised in the accounts for present
obligations arising out of past events and would probably
require an outflow of economic resources, the amount of
which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or non-
occurrence of one or more uncertain future events not
wholly within the control of the Company, or a present
obligation that is not recognised because a reliable
estimate of the liability cannot be made, or likelihood of an
outflow of resources is remote.
Contingent assets are not recognised in the financial
statements.
219
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
2.9 IMPAIRMENT OF ASSETS
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss
and is recognised in the statement of profit and loss. If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset
is reflected at the recoverable amount but limited to the
carrying amount that would have been determined (net of
depreciation / amortization) had no impairment loss been
recognised in prior accounting periods.
2.10 EMPLOYEE BENEFITS
a) The Company (employer) and the employees
contribute a specified percentage of eligible
employees’ salary- currently 12%, to the
employer established provident fund “Essar
Staff Provident Fund” set up as an irrevocable
trust by the Company. The Company is
generally liable for annual contributions and
any shortfall in the fund assets based on
government specified minimum rates of
return – currently @ 8.25%, and recognises
such provident fund liability, considering fund
as the defined benefit plan, based on an
independent actuarial valuation carried out at
every statutory year end.
b) Provision for gratuity for staff is made on
actuarial valuation. Contribution in respect
of gratuity for staff is made to Life Insurance
Corporation of India based on demands
made. The Company also accounts for
gratuity liability based on an independent
actuarial valuation carried out at every
statutory year end.
c) Contribution towards superannuation, funded
by payments to Life Insurance Corporation
of India, is a fixed percentage of the salary
of eligible employees under a defined
contribution plan, and is charged to the
statement of profit and loss.
d) Provision for all compensated absences
of eligible employees is based on an
independent actuarial valuation.
220 Annual Report 2011-12
Notes forming part of financial statements
3 SHARE CAPITAL
(a) Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
Authorised
Equity shares of Rs.10/- each 50,000 5.00 50,000 5.00
Preference shares of Rs.10/- each 129,950,000 12,995.00 74,950,000 7,495.00
13,000.00 7,500.00
Issued, subscribed and fully paid up
Equity shares of Rs.10/- each 50,000 5.00 50,000 5.00
0.01% compulsorily convertible cumulative
participating preference shares (the “CCCPPS”)
of Rs.10/- each 116,000,000 11,600.00 66,000,000 6,600.00
11,605.00 6,605.00
(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
i) Equity shares of Rs.10/- each
At the beginning of the year 50,000 5.00 50,000 5.00
Add: Issue of shares – – – –
Outstanding at the end of the year 50,000 5.00 50,000 5.00
ii) 0.01% CCCPPS of Rs.10/- each
At the beginning of the year 66,000,000 6,600.00 – –
Add: Issue of shares 50,000,000 5,000.00 66,000,000 6,600.00
Less: extinguishment under the scheme
of arrangement
Outstanding at the end of the year 116,000,000 11,600.00 66,000,000 6,600.00
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Terms / rights attached to CCCPPS
(i) Fixed dividend on preference shares : The CCCPPS have fixed dividend of 0.01% p.a. from the date of
allotment on cumulative basis.
(ii) Participating dividend: CCCPPS holder have the same rights to dividend as that of the equity share holder
over and above the fixed dividend.
(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs.10/- each at par at the end of
twenty years from the March 28, 2012. The CCCPPS holder shall have the option to convert the CCCPPS
into equity shares any time after the expiry of one year from the date of allotment of the CCCPPS.
(iv) Equity shares issued upon conversion of the CCCPPS shall rank pari passu with the existing equity shares.
221
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
(e) Shares held by holding / ultimate holding company and / or their subsidiaries / associates and details of the
shareholding more than 5% shares in the Company
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs % Number Rs. in lakhs %
i) Equity shares of Rs.10/- each
Essar Ports Limited (formerly
known as Essar Shipping Ports
& Logistics Limited) – – – 24,440 2.44 48.88%
Essar Steel India Limited (formerly
known as Essar Steel Limited) 2,000 0.20 4.00% 14,280 1.43 28.56%
Essar Bulk Terminal Limited 47,500 4.75 95.00% 6,630 0.66 13.26%
Essar Logistics Limited 500 0.05 1.00% 4,650 0.47 9.30%
ii) CCCPPS of Rs.10/- each 50,000 5.00 100.00% 50,000 5.00 100.00%
Essar Ports Limited (formerly
known as Essar Shipping Ports
& Logistics Limited) 115,500,000 11,550.00 99.57% 66,000,000 6,600.00 100.00%
Essar Bulk Terminal Limited 500,000 50.00 0.43% – – –
116,000,000 11,600.00 100.00% 66,000,000 6,600.00 100.00%
4 RESERVE AND SURPLUS(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
a. Deficit in the statement of profit and loss
Opening balance (7.38) (1.43)
Add: Net loss for the current year (19.50) (5.95)
Closing balance (26.88) (7.38)
Total reserves and surplus (26.88) (7.38)
5 LONG TERM BORROWINGS(Rs. in lakhs)
Particulars Non current portion Current Maturity
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Secured
(a) Rupee term loan from banks 23,394.84 7,856.69 1,341.90 –
(b) Rupee term loan from financial institutions 5,758.38 – 298.20 –
(c) Foreign currency buyers credit 1,819.97 1,588.49 – –
Total secured loan 30,973.19 9,445.18 1,640.10 –
Total 30,973.19 9,445.18 1,640.10 –
Less: Amount disclosed under the head
‘other current liabilities’ (refer note 9) – – (1,640.10) –
Long term borrowings 30,973.19 9,445.18 – –
222 Annual Report 2011-12
Notes forming part of financial statements
Notes:
(i) Loans are secured by first charge on Company’s movable and immovable properties and backed by jointly
and several corporate guarantee of Rs.41,000 lakhs from the holding company Essar Ports Limited (formerly
known as Essar Shipping Ports & Logistics Limited) and Essar Shipping Limited.
(ii) Secured rupee term loans from banks and financial institutions are part of consortium loan agreement and
carry interest rate of 13% to 14.5% (base rate + spread 2% to 4%) p.a with repayment starting from June
2012 to March 2021.
(iii) Foreign currency buyers credit loan carrying interest rate of LIBOR plus 285 bps. Buyers credit facilities are
part of the consortium loan agreement and get converted into rupee term loan. Repayment schedule is as per
note (ii) above
6 OTHER LONG-TERM LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Acceptances in respect of capital goods (refer note (a) below) 73.62 5,814.30
Total 73.62 5,814.30
Note:
(a) Acceptance facilities are part of consortium loan agreement for rupee term loan from banks and financial
institutions disclosed under note 5 above. The acceptances get converted into rupee term loan.
7 PROVISIONS
(Rs. in lakhs)
Particulars Long term provisions Short term provisions
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
(a) Provision for employee benefits
Gratuity (refer note 21) 8.82 0.97 0.35 0.00 *
Compensated absences (refer note 21) 7.60 1.00 0.55 0.09
(b) Others
Provisions for taxation (net of advance tax) – – – 8.87
Total 16.42 1.97 0.90 8.96
* figure is less than Rs.1000/-
8 SHORT TERM BORROWINGS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Unsecured
12.5% loans repayable on demand-from related parties (refer note 22) – 20.00
Total – 20.00
223
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
9 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Capital creditors (refer note 23) 4,591.14 606.40
Current maturities of long-term borrowings (refer note (i) below) 1,640.10 –
Application money received for allotment of securities – 2,500.00
(Share application money received in excess of authorised
share capital is classified as part other current liabilities.)
Other liabilities
(i) Creditors for expenditure (refer note 23) 329.35 237.03
(ii) Statutory dues (withholding taxes) 39.05 113.43
Total 6,599.64 3,456.86
Note:
(i) Refer note (i) & (ii) in note-5 long term borrowings for details of security and guarantee.
224 Annual Report 2011-12
Notes forming part of financial statements
10.
FIX
ED
AS
SE
TS
(Rs.
in lakhs)
G
RO
SS
BLO
CK
A
CC
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pril 1,
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uring
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For
the
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M
arc
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the y
ear
2012
2011
year
20
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2
20
11
Tan
gib
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Fre
ehold
land
11.9
9
115.1
0
127.0
9
–
–
–
12
7.0
9
11
.99
Furn
iture
and
fixtu
res
–
24.4
9
24.4
9
–
1.0
2
1.0
2
23
.47
–
Tota
l 11.9
9
139.5
9
151.5
8
–
1.0
2
1.0
2
15
0.5
6
11
.99
Pre
vious y
ear
–
11.9
9
11.9
9
–
–
–
11
.99
–
225
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
11 CAPITAL WORK IN PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(a) Capital work in progress 33,818.57 12,537.84
Sub - total (a) 33,818.57 12,537.84
(b) Expenditure during construction
Opening balance 2,898.61 7.46
Add: Additions during the year
Interest and finance cost 3,086.07 506.98
Foreign exchange loss / (gain) on borrowings 231.48 (22.88)
Insurance expenses 15.28 29.42
Consulting expenses 508.04 151.56
General expenses 219.49 1,286.83
Salary and wages 197.96 13.74
Rental expenses 3,025.99 951.51
Less: Income from sale of mutual fund and
interest of fixed deposit (net of tax) (32.64) (26.01)
Sub - total (b) 10,150.30 2,898.61
Total (a + b) 43,968.87 15,436.44
12 LOANS AND ADVANCES
(Rs. in lakhs)
Particulars Long term loans and advances Short term loans and advances
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Unsecured, considered good
Capital advances to related party (refer note 22) 1,349.54 4,379.39 – –
Security deposits 30.76 20.58 2.30 –
Advance income-tax and tax deducted at source
(net of provision for taxation) – – 0.01 –
Capital advance to related party
Prepaid expenses 987.08 1,110.47 123.67 192.80
Balance with excise authorities – 809.03 1,770.32 –
Staff advance – – 0.66 –
Excess tax paid under 194-C – – 27.05 –
Other receivable – – – 4.50
Total 2,367.38 6,319.47 1,924.01 197.30
226 Annual Report 2011-12
Notes forming part of financial statements
13 OTHER ASSETS
(Rs. in lakhs)
Particulars Other non-current assets Other current assets
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Others (unsecured and considered good)
Share issued expenses 44.07 31.24 14.22 8.73
Interest accrued on fixed deposits – – 7.42 10.46
Other receivables from related parties
(refer note 22) – – 180.94 –
Total other non current assets 44.07 31.24 202.58 19.19
14 CASH AND BANK BALANCE
(Rs. in lakhs)
Current balances
Particulars As at As at
March 31, 2012 March 31, 2011
A. Cash and cash equivalents
Balances with banks 334.42 1,049.26
– On current accounts 334.42 1,049.26
B. Other bank balances
Deposits with original maturity of more than
3 months but less than 12 months 250.00 2,280.00
Total 584.42 3,329.26
15 ESTABLISHMENT AND OTHER EXPENSES
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Auditors’ remuneration (refer note below) 10.30 1.43
Other expenses 9.20 4.52
Total 19.50 5.95
(Rs. in lakhs)
Auditor’s remunerations includes For the year ended For the year ended
March 31, 2012 March 31, 2011
As auditor 1.00 1.00
For other assurance services 9.00 0.43
Out of pocket expenses 0.30 –
Total 10.30 1.43
227
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
16 CONTINGENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Dividend on 0.01% compulsorily convertible cumulative
participating preference shares 0.84 0.18
17 CAPITAL COMMITMENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Estimated amount of contract remaining to be executed on capital
account and not provided for 5,642.59 23,870.49
18 EARNINGS PER SHARE:
The calculation of the basic and diluted earnings per share is based on the following data:
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Earnings/(loss) for the year for the purpose of earning per share (Rs. in lakhs) (19.50) (5.95)
Unpaid dividend on compulsorily convertible cumulative
participating preference shares (Rs. in lakhs) 0.67 0.21
Loss attributable to equity shareholders (Rs. in lakhs) (20.17) (6.16)
No. of equity shares at the beginning of the year 50,000 50,000
No. equity shares issued during the year – –
No. of equity shares at the end of the year 50,000 50,000
Weighted average number of equity shares outstanding during the year 50,000 50,000
Earnings per share - basic (Rs.) (40.34) (12.31)
Face value per share (Rs.) 10 10
Note : 0.01% CCCPPS have not been considered for purpose of calculation of the weighted average number of
equity shares for dilution purposes as they are anti-dilutive.
19 FOREIGN CURRENCY EXPOSURE
(a) There were no forward / options contracts entered in to by the Company during the financials year to hedge
its foreign currency exposures.
(b) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise
are given below.
As at Amount in As at Amount in Particulars March 31, foreign March 31, foreign 2012 currency 2011 currency
Rs. in lakhs Currency As at Rs. in lakhs Currency As at March 31, March 31, 2012 2012
Secured loan – buyer’s Credit 1,819.97 USD 3,557,647 1,588.49 USD 3,557,647
Interest on buyer’s credit 20.67 USD 40,400 5.68 USD 12,718
228 Annual Report 2011-12
Notes forming part of financial statements
20 CIF VALUE OF IMPORT (INCLUDING GOODS IN TRANSIT)
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Capital goods – 2,273.12
Total – 2,273.12
21 EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:
I. Defined contribution plans:
During the year, the Company has recognised the following amounts in the statement of profit and loss
expenditure during construction :
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(a) Employer’s contribution to provident fund 7.21 0.83
7.21 0.83
II. Defined benefit plans
(a) Gratuity
(b) Compensated absences (CA)
In accordance with AS-15, relevant disclosures are as under:
(A) Changes in present value of defined benefit obligation:
(Rs. in lakhs)
Particulars Gratuity (non-funded) CA-paid leave (non- funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Present value of defined benefit obligation
as at the beginning of the year 0.97 – 1.09 –
Current service cost 1.31 0.97 0.98 1.09
Interest cost 0.08 – 0.09 –
Actuarial (gain) / loss on obligations 6.82 – 5.98 –
Plan amendment – – – –
Present value of defined benefit obligation
as at the end of the year 9.18 0.97 8.14 1.09
229
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
(B) Amount recognised in balance sheet:
(Rs. in lakhs)
Particulars Gratuity-off shore officers CA- paid leave
(non-funded) (non- funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Present value of defined benefit obligation
as at the end of the year 9.17 0.97 8.14 1.09
Fair value of plan assets as at end of the period – – – –
Funded status (surplus / (deficit)) (9.17) (0.97) (8.14) (1.09)
Of which :-
Current 0.35 0.00 * 0.55 0.09
Non Current 8.82 0.97 7.59 1.00
* amount is less than Rs.1000/-
(C) Expenses recognised in the statement of profit and loss / expenditure during construction period:
(Rs. in lakhs)
Particulars Gratuity-off shore officers CA- paid leave
(non-funded) (non- funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Current service cost 1.31 0.97 0.98 1.09
Interest cost 0.08 – 0.09 –
Net actuarial (gain) / loss recognised in the period 6.82 – 5.98 –
Total expenses recognised in the statement
of profit and loss / edc 8.21 0.97 7.05 1.09
(D) Experience history:
(Rs. in lakhs)
Particulars Gratuity-off shore officers CA- paid leave
(non-funded) (non- funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Defined benefit obligation at the end of the year (9.17) (0.97) (8.14) (1.09)
Funded status (9.17) (0.97) (8.14) (1.09)
Experience gain / (loss) adjustments
on plan liabilities (7.16) – (6.29) –
Actuarial gain / (loss) due to change
on assumptions 0.34 – 0.31 –
As this is the second year of implementation of Accounting Standard (AS)-15 (Revised 2005) only corresponding
previous year figure have been furnished.
230 Annual Report 2011-12
Notes forming part of financial statements
(E) Actuarial assumptions
Actuarial valuations were done in respect of the aforesaid defined benefit plans based on the following
assumptions:
(i) General assumptions:
(Rs. in lakhs)
Particulars Gratuity-off shore officers CA-paid leave
(non-funded) (non-funded)
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Discount rate (per annum) 8.50% 8.00% 8.50% 8.00%
Rate of return on plan assets (for funded scheme) N.A N.A N.A N.A
Expected retirement age of employees (years) 58 58 58 58
Separation rate of employees 5.00% 5.00% 5.00% 5.00%
Rate of increase in compensation 9.00% 9.00% 9.00% 9.00%
(ii) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) Mortality table.
(iii) Leave policy:
(a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be
(b) Leave balance as at the valuation date and each subsequent year following the valuation date to the
extent not availed by the employee is available for encashment on separation from the Company up to a
maximum of 120 days.
22 RELATED PARTY TRANSACTIONS
(a) Holding companies
(i) Essar Global Limited, Cayman Island, ultimate holding company
(ii) Essar Shipping & Logistics Limited, Cyprus. (intermediate holding company)
(iii) Essar Ports Limited, (formerly known as Essar Shipping Ports & Logistics Ltd.) (intermediate holding
company from March 31, 2012)
(iv) Essar Bulk Terminal Limited (immediate holding company with effect from March 31, 2012)
(b) Key management personnel
Capt. Rajesh Beri – Whole time Director (with effect from October 17, 2011)
(c) Fellow subsidiaries and other related parties where there have been transactions
(i) Vadinar Oil Terminal Limited
(ii) Aarkay Holdings Limited
(iii) Essar Bulk Terminal (Salaya) Limited
(iv) Essar Steel India Limited (formerly known as Essar Steel Limited)
(v) Aegis Limited
(vi) Essar Paradip Terminals Limited
(vii) Vadinar Ports & Terminals Limited
(viii) Essar House Limited
(ix) Essar Projects (India) Limited
(x) Futura Travels Limited
(xi) Essar Investments Limited
(xii) Essar Infrastructure Services Limited
(xiii) India Securities Limited
(xiv) Essar Logistics Limited
(xv) Essar Services India Limited
231
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
The details of transactions with related parties during the year are as under:(Rs. in lakhs)
Nature of transactions Holding Fellow subsidiaries and Key management
companies other related parties personnel Total
31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011
Expenditure during construction period
Management fees
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 102.00 – – – – – 102.00 –
Vadinar Oil Terminal Limited – – – 403.12 – – – 403.12
Essar Investments Limited – – 194.51 – – – 194.51 –
Essar Bulk Terminal Limited – 37.06 – – – – – 37.06
Essar Services India Limited – – 45.50 – – – 45.50 –
Total 102.00 37.06 240.01 403.12 – – 342.01 440.18
Business support expenses
Essar House Limited – – 23.93 – – – 23.93 –
Essar Infrastructure Services Limited – – 104.63 – – – 104.63 –
Aegis Limited – – 42.34 – – – 42.34 –
Essar Bulk Terminal Limited 4.00 – – – – – 4.00 –
Total 4.00 – 170.90 – – – 174.90 –
Remuneration
Capt. Rajesh Beri * – – – – 39.81 – 39.81 –
Interest expenses
Vadinar Ports & Terminals Limited – – 1.19 1.53 – – 1.19 1.53
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 79.60 – – – – – 79.60
Total – 79.60 1.19 1.53 – – 1.19 81.13
Travelling expenses
Futura Travels Limited – – 86.49 2.50 – – 86.49 2.50
CWIP
Essar Projects (India) Limited – – 20,429.24 10,758.98 – – 20,429.24 10,758.98
Unsecured loans taken
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 3,497.30 – – – – – 3,497.30
Vadinar Port & Terminal Limited – – – 20.00 – – – 20.00
Essar Bulk Terminal Limited – – – – – – – –
Total – 3,497.30 – 20.00 – – – 3,517.30
Repayment of unsecured loan
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 806.00 – – – – – 806.00
Essar Bulk Terminal Limited – 600.00 – – – – – 600.00
Vadinar Ports & Terminals Limited – – 20.00 – – – 20.00 –
Total – 1,406.00 20.00 – – – 20.00 1,406.00
232 Annual Report 2011-12
Notes forming part of financial statements
Loans & advances
Essar Bulk Terminal (Salaya) Limited – – – 1.93 – – – 1.93
Transfer of loan into share application money
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 3,497.30 – – – – – 3,497.30
Transfer of share application money into loan
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 697.30 – – – – – 697.30
Share application money given
Essar Paradip Terminals Limited – – 70.00 – – – 70.00 –
Refund of share application money given
Essar Paradip Terminals Limited – – 70.00 – – – 70.00 –
Advance received towards shares
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 3,500.00 9,747.30 – – – – 3,500.00 9,747.30
Refund of share application money
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 1,000.00 – – – – – 1,000.00 –
Essar Logistics Limited – – – 2,287.80 – – – 2,287.80
Reimbursement of expenses
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 214.63 – – – – – 214.63
Essar Investments Limited – – – 1,000.00 – – – 1,000.00
Essar Infrastructure Services Limited – – – 0.11 – – – 0.11
India Securities Limited – – – 27.94 – – – 27.94
Essar Steel India Ltd. – – 4.67 – – – 4.67 –
Essar Bulk Terminal Limited 0.10 20.68 – – – – 0.10 20.68
Total 0.10 235.31 4.67 1,028.05 – – 4.76 1,263.36
Allotment of preference shares
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 4,950.00 6,600.00 – – – – 4,950.00 6,600.00
Essar Bulk Terminal Limited 50.00 – – – – – 50.00 –
Total 5,000.00 6,600.00 – – – – 5,000.00 6,600.00
Guarantee received (jointly & severally) – –
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) and
Essar Shipping Limited – 41,000.00 – – – – – 41,000.00
* figure does not include the amount payable gratuity and compensated absence by the company as the same is calculated for the company as whole
on actuarial basis.
(Rs. in lakhs)
Nature of transactions Holding Fellow subsidiaries and Key management
companies other related parties personnel Total
31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011
233
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR BULK TERMINAL PARADIP LIMITED
Outstanding as at March 31, 2012(Rs. in lakhs)
Nature of transactions Holding Fellow subsidiaries and Key management
companies other related parties personnel Total
31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011 31.03.2012 31.03.2011
Unsecured loan
Vadinar Ports & Terminals Limited – – – 21.53 – – – 21.53
Advance towards share application money
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 2,450.00 – – – – – 2,450.00
Essar Bulk Terminal Limited – 50.00 – – – – – 50.00
Capital creditors
Essar Projects (India) Limited – – 4,591.14 – – – 4,591.14 –
Other current liabilities – – – –
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 51.26 37.06 – – – – 51.26 37.06
Vadinar Oil Terminal Limited – – – 100.01 – – – 100.01
Essar Bulk Terminal (Salaya) Limited – – 100.00 – – – 100.00 –
Essar Bulk Terminal Limited – 20.68 – – – – – 20.68
Essar House Limited – – 1.83 – – – 1.83 –
Essar Infrastructure Services Limited – – 7.54 0.11 – – 7.54 0.11
Aegis Limited – – 25.77 – – – 25.77 –
Essar Bulk Terminal Limited 3.97 – – – – – 3.97 –
Futura Travels Limited – – 8.23 – – – 8.23 –
Essar Services India Limited – – 45.50 – – – 45.50 –
Total 55.23 57.74 188.87 100.12 – – 244.09 157.86
Interest accrued on loan
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) – 5.66 – – – – – 5.66
Advance to creditors
Essar Projects (India) Limited – – 1,349.54 4,379.39 – – 1,349.54 4,379.39
Other receivable
Essar Investments Limited – – 180.94 – – – 180.94 –
Loans & advances
Essar Bulk Terminal (Salaya) Limited – – – 1.93 – – – 1.93
Guarantee received (jointly & severally)
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) and
Essar Shipping Limited 41,000.00 41,000.00 – – – – 41,000.00 41,000.00
234 Annual Report 2011-12
Notes forming part of financial statements
For and on behalf of the Board of Directors
Capt. Rajesh Beri Shailesh Sawa
Executive Director Director
Mumbai
May 26, 2012
23 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and
Medium Enterprise Development Act, 2006 and hence disclosures relating to amount unpaid as at the end of the
year, together with interest paid / payable as required under the said Act has not been furnished and provision for
interest, if any, on delayed payments, is not ascertainable at this stage.
24 Business segment & geographic data
The Company has one business segment of jetty operation, which is in project stage and only one geographical
segment i.e. India.
25 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.
235
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
BOARD OF DIRECTORS
Rajiv Agarwal
Director
K. K. Sinha
Director
Shailesh Sawa
Director
U. Venkat Rao
Executive Director
Capt. Rajesh Beri
Director
ESSAR PARADIP TERMINALS LIMITED
REGISTERED & CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi
Mumbai 400 034
AUDIT COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
236 Annual Report 2011-12
Directors’ Report
Your Directors have pleasure in presenting the Third Annual Report together with the Audited Accounts of the Company
for the year ended March 31, 2012.
FINANCIAL RESULTS
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Total Expenditure 3.28 3.57
Gross Profit/(Loss) (3.28) (3.57)
Add: Balance in the Profit and Loss Account as per last Balance Sheet (5.30) (1.73)
Balance carried forward to Balance Sheet (8.58) (5.30)
PROJECT REVIEW
Your Company has been awarded a tender for the development of a deep draft coal berth at Paradip in the State of
Odisha by the Paradip Port Trust (PPT) on a built, operate and transfer basis for a period of 30 years.
The terminal will have a 370 mtrs. berth, storage yard of 1,47,000 sq. mtrs area and mechanised rail loading systems.
The berths will be equipped with ultra modern ship-unloaders that are capable of handling Cape Size vessels of 1,25,000
DWT initially with a draft of 17.1 mtrs. and will be upgraded to accommodate 1,85,000 DWT vessels with draft of 19.0
mtrs. The cargo will be moved to stockyard with high-capacity conveyors and stacked with modern stackers. The cargo
will be reclaimed with bucket wheel re-claimers for loading wagons with rapid wagon loading systems. The facility is being
built to enable handling of upto 18 million tons of cargo per annum.
PPT is building a bulb-shaped railway network for connecting to your Company’s terminal. The rail network construction
work has already started after several land surveys.
Dredging near berth and channel area will also be done by PPT. PPT is planning to tender the work soon.
The project is expected to be completed in 2 years time.
DIVIDEND
Since your Company is yet to commence operations, your Directors have not recommended any dividend on the equity
shares and the 0.01% Compulsorily Convertible Cumulative Participating Preference Shares for the year under review.
FIXED DEPOSITS
Your Company has not accepted any fixed deposits during the year under review.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,
Shri. K. K. Sinha retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-
appointment.
During the year under review Capt. Rajesh Beri has been appointed as an Additional Director. Shri. U. Venkat Rao has also
been appointed as an Additional Director in the wholetime employment of the Company designated as Executive Director.
The Company has received notices from members proposing the appointment of Capt. Rajesh Beri and Shri. U. Venkat
Rao as Directors of the Company.
AUDITORS
Your Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registered
No.117365W retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. It
is proposed to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad as the Auditors of the
Company from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.
Directors’ Report
237
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
HOLDING COMPANY
Your Company is the subsidiary of Essar Ports Limited.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPOTION AND FOREIGN EXCHANGE EARNING
AND OUTGO
The provisions of Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosure of Particulars in
the Report of Board of Directors), Rules 1988, relating to
Energy Conservation and Technology Absorption are not
applicable to your Company.
As regards foreign exchange earnings and outgo, your
Company did not earn nor did it spend any foreign
exchange during the year.
PARTICULARS OF EMPLOYEES
There are no employees of the Company who received
remuneration as prescribed under Section 217(2A) of
the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state
that:
(a) in preparation of the annual accounts, the applicable
accounting standards have been followed and there
have been no material departures;
(b) the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
Company at the end of the financial year;
(c) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
and
(d) the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS
Your Directors express their sincere thanks and
appreciation to all the employees for their commendable
teamwork and contribution to the growth of the Company.
Your Directors thank the Paradip Port Trust, its Bankers
and other business associates for their continued support
and co-operation during the year.
For and on behalf of the Board
U. Venkat Rao Shailesh Sawa
Mumbai Executive Director Director
May 26, 2012
238 Annual Report 2011-12
Auditors’ Report
TO THE MEMBERS OF
ESSAR PARADIP TERMINALS LIMITED
1. We have audited the attached Balance Sheet
of ESSAR PARADIP TERMINALS LIMITED (“the
Company”) as at 31st March, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of
the Company for the year ended on that date, both
annexed thereto. These financial statements are
the responsibility of the Company’s Management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free of material misstatements.
An audit includes examining, on a test basis, evidence
supporting the amounts and the disclosures in the
financial statements. An audit also includes assessing
the accounting principles used and the significant
estimates made by the Management, as well as
evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central Government
in terms of Section 227(4A) of the Companies Act,
1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to
in paragraph 3 above, we report as follows:
a. we have obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit;
b. in our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of those
books;
c. the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by
this report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, the Statement
of Profit and Loss and the Cash Flow Statement
dealt with by this report are in compliance with
the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956;
e. in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2012;
(ii) in the case of the Statement of Profit and
Loss, of the loss of the Company for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
5. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken
on record by the Board of Directors, none of the
Directors is disqualified as on 31st March, 2012 from
being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No.31544)
Mumbai
May 26, 2012
239
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
Annexure to the Auditors’ Report
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company’s
business/activities/result, clauses (vi), (vii), (viii), (xi),
(xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) and (xx) of
the order are not applicable.
(ii) In respect of its fixed assets:
The Company is in project stage, and hence the
requirement for maintenance of records showing
full particulars, including quantitative details and
situation of the fixed assets are not applicable to the
Company. Hence the provision of clause (i)(a) to (i)(c)
of the Order is not applicable to the Company.
(iii) The reporting requirements on inventory are not
applicable as the Company does not have any
inventory. Hence the provision of clause (ii) (a) to (ii)
(c) of the Order is not applicable to the company.
(iv) The Company has neither granted nor taken any
loans, secured or unsecured, to/from companies,
firms or other parties listed in the Register
maintained under Section 301 of the Companies
Act, 1956. Hence, the provision of clause (iii)(b) to (iii)
(g) of the Order is not applicable to the Company.
(v) In our opinion and according to the information
and explanations given to us, there are adequate
internal control systems commensurate with the
size of the Company and the nature of its business
with regard to purchases fixed assets. The nature
of the Company’s activities is such that it did not
require purchase of inventory or sale of good and
services. During the course of our audit, we have
not observed any major weakness in such internal
control system.
(vi) In our opinion and according to the information and
explanations given to us, there are no contracts
or arrangements that need to be entered into the
register maintained in pursuance of Section 301
of the Companies Act, 1956. Hence the provision
of clause (v) of the Order is not applicable to the
company.
(vii) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company has generally been regular in
depositing undisputed dues relating to Income-tax,
Cess and other material statutory dues applicable
to it with the appropriate authorities. As informed
to us, the provisions for Investment Education and
Protection Fund, Employee’s State Insurance, Sales
Tax, Wealth Tax Service Tax, Custom Duty and
Excise duty were not applicable to the Company
during the year.
(b) There were no undisputed amounts payable in
respect of above statutory dues in arrears as at 31st
March, 2012 for a period of more than six months
from the date they became payable.
(c) There was no due pending to be deposited on
account of any dispute in respect of Income-tax and
Cess as on 31st March, 2012.
(viii) The Company has been registered for a period less
than five years. Hence the provision of clause (x) of
the Order is not applicable to the Company.
(ix) To the best of our knowledge and according to the
information and explanations given to us, no fraud
by the Company and no material fraud on the
Company has been noticed or reported during the
year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No.31544)
Mumbai
May 26, 2012
240 Annual Report 2011-12
Balance Sheet as at March 31, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
I. EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital 3 905.00 5.00
(b) Reserves and surplus 4 (8.58) (5.30)
896.42 (0.30)
2 Share application money pending allotment 5 95.00 –
3 Current liabilities
(a) Short-term borrowings 6 50.00 –
(b) Other current liabilities 7 233.13 720.03
(c) Short-term provisions 8 0.47 –
283.60 720.03
Total 1,275.02 719.73
II. ASSETS
1 Non-current assets
(a) Fixed assets
(i) Capital work-in-progress 9 274.83 183.00
(b) Long-term loans and advances 10 526.91 526.14
(c) Other non-current assets 11 6.18 –
807.92 709.14
2 Current assets
(a) Cash and bank balances 12 458.93 10.59
(b) Other current assets 11 8.17 –
467.10 10.59
Total 1,275.02 719.73
See accompanying notes forming part of financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia U. Venkat Rao Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
241
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
(Rs. in lakhs)
Particulars Note For the year ended For the year ended
No. March 31, 2012 March 31, 2011
I. REVENUE FROM OPERATIONS – –
II. Other income – –
III. Total revenue (I + II) – –
IV. EXPENSES:
Other expenses 13 3.28 3.57
V. Total expenses 3.28 3.57
VI Loss for the year (III-V) (3.28) (3.57)
VII Earnings per share ( face value of Rs. 10/- Each): 16
Basic and diluted (6.55) (7.15)
See accompanying notes forming part of financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia U. Venkat Rao Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
Statement of Profit and Loss for the year ended March 31, 2012
242 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
I. CASH FLOW FROM OPERATING ACTIVITIES
Net loss as per Statement of Profit and Loss (3.28) (3.57)
Adjustment for:
Share issue expenses written off 0.13 –
Trade and other payables 1.00 2.22
Cash generated from / (used in) operating activities (2.15) (1.35)
Income taxes refund / (paid) net (7.17) –
Net cash used in operating activities (9.32) (1.35)
II. CASH FLOW FROM INVESTING ACTIVITIES
Capital work in progress and capital advances (98.21) (183.00)
Investment in bank fixed deposit (416.33) –
Interest income 18.15 –
Increase in loans and advances and other current assets (0.78) (18.76)
Increase in current liabilities and provision 32.11 191.43
Net cash used in investing activities (465.06) (10.33)
III. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital 375.00 –
Proceeds from short term loan 50.00 –
Share application money received 170.00 525.00
Refund of share application money (70.00) –
Interest & finance cost (loan arrangement fees & Interest) (10.72) (507.38)
Share issue expenses (7.89) –
Net cash flow from financing activities 506.39 17.62
Net increase in cash and cash equivalents 32.01 5.94
Cash and cash equivalents at the beginning of the year 10.59 4.65
Cash and cash equivalents at the end of the year
(refer reconciliation below) 42.60 10.59
Cash Flow Statement for the year ended March 31, 2012
243
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
NOTE:
1. Reconciliation between closing cash & bank balance and cash &
cash equivalents as per cash flow statement.
Cash and cash equivalents as per cash flow statement 42.60 10.59
Add: margin money deposits not considered as cash & cash
equivalents as per AS-3 416.33 –
Cash and bank balances as per note 12 458.93 10.59
2. Non-Cash Transaction
During the year, the Company has issued 525,000 - 0.01% compulsorily convertible cumulative participating
preference shares of Rs. 10/- each for Rs.525 lakhs against share application money received in previous year.
3. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 “Cash
Flow Statement” as notified under the Companies (Accounting Standards) Rules, 2006.
See accompanying notes forming part of financial statement
Cash Flow Statement for the year ended March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia U. Venkat Rao Shailesh Sawa
Partner Executive Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
244 Annual Report 2011-12
Notes forming part of financial statements
1 CORPORATE INFORMATION
Essar Paradip Terminals Limited (the Company) is a public
company domiciled in India and incorporated under
provisions of Companies Act, 1956 with the purpose
of providing port and terminal handling services and is
constructing jetty at Paradip.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Accounting
These financial statements are prepared under the
historical cost convention, on accrual basis of accounting
and are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards (AS) referred to in sub-section (3C)
of Section 211 of the Companies Act, 1956.
2.2 Use of Estimates
The preparation of financial statements requires estimates
and assumptions to be made that affect the reported
amount of assets and liabilities on the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognised in the period in which the
results are known / materialised.
2.3 Capital Work-In-Progress and Expenditure
during Constructions
Direct expenditure on asset under construction is shown
under capital work-in-progress.
Project management consultancy, technical fees and other
expenditure incidental to the construction of jetty that take
substantial period of time to get ready for their intended
use are accumulated as expenditure during construction
pending allocation to fixed assets and other accounts, as
applicable on completion of the project.
Advance on capital account include progress based
payments made under the contracts for assets under
construction and other capital advances until the same are
allocated to fixed assets and other accounts as applicable.
2.4 Borrowing Costs
Borrowing costs that are directly attributable to the
acquisition, construction/development of qualifying asset
are amortised over the tenure of the loan and capitalised
as a part of cost of such asset till such time that the asset
is not capitalised; and is charged to the Statement of
Profit and Loss thereafter. A qualifying asset is one that
necessary takes substantial period of time to get ready for
the intended use.
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of fixed assets
are amortised and charged to the Statement of Profit and
Loss, over the tenure of the loan.
2.5 Taxation
The provision for current taxation is computed in accordance
with the relevant tax regulations. Deferred tax is recognised
on timing differences between the accounting and the taxable
income for the period and quantified using the tax rates and
laws enacted or substantively enacted as on the balance
sheet date. Deferred tax assets are recognised and carried
forward to the extent that there is a reasonable certainty
that sufficient future taxable income will be available against
which such deferred tax assets can be realised in future.
Deferred tax assets relating to unabsorbed business losses
on unabsorbed depreciation are recognised when there is a
virtual certainty supported by the convincing evidence that
there will sufficient taxable profit to utilise them.
2.6 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised in the accounts for present
obligations arising out of past events and would probably
require an outflow of economic resources, the amount of
which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or non-
occurrence of one or more uncertain future events not
wholly within the control of the Company, or a present
obligation that is not recognised because a reliable
estimate of the liability cannot be made, or likelihood of an
outflow of resources is remote.
Contingent assets are not recognised in the financial
statements.
2.7 Impairment of Assets
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss
and is recognised in the statement of profit and loss. If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is re-assessed and the asset is
reflected at the recoverable amount but limited to the
carrying amount that would have been determined (net of
depreciation / amortisation) had no impairment loss been
recognised in prior accounting periods.
245
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
3 SHARE CAPITAL
(a) Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
Authorised
Equity shares of Rs. 10/- each 50,000 5.00 50,000 5.00
Preference shares of Rs. 10/- each 9,950,000 995.00 – –
1,000.00 5.00
Issued, subscribed and fully paid up
Equity shares of Rs. 10/- each 50,000 5.00 50,000 5.00
0.01% Compulsorily convertible cumulative
participating preference shares (the “CCCPPS”)
of Rs. 10/- each 9,000,000 900.00 – –
905.00 5.00
(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in lakhs Number Rs. in lakhs
i) Equity shares of Rs. 10/- each
At the beginning of the year 50,000 5.00 50,000 5.00
Add: Issue of shares – – – –
Outstanding at the end of the year 50,000 5.00 50,000 5.00
ii) 0.01%CCCPPS of Rs. 10/- each
At the beginning of the year – – – –
Add: Pending allotment of shares – – – –
Add: Issue of shares 9,000,000 900 – –
Outstanding at the end of the year 9,000,000 900.00 – –
(c) Terms / rights attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Terms / rights attached to CCCPPS
(i) Fixed Dividend : The CCCPPS have fixed dividend of 0.01% p.a. from the date of allotment on cumulative
basis.
(ii) Participating Dividend : CCCPPS holders have the same rights to dividend as that of the equity share holders
over and above the fixed dividend.
(iii) Each CCCPPS shall be compulsorily convertible into one equity share of Rs 10/- each at par at the end of
twenty years from 28th March 2012.The CCCPPS holders shall have the option to convert the CCCPPS into
equity shares any time after the expiry of one year from the date of allotment of the CCCPPS.
(iv) Equity shares issued upon conversion of the CCCPPS shall rank pari passu with the existing equity shares.
246 Annual Report 2011-12
Notes forming part of financial statements
(e) Shares held by holding/ultimate holding company and/or their subsidiaries/associates and details of the
shareholding more than 5% shares in the Company
Particulars As at March 31, 2012 As at March 31, 2011
Number Rs. in % Number Rs. in %
lakhs lakhs
i) Equity shares of Rs. 10/- each
Essar Ports Limited (formerly
known as Essar Shipping Ports &
Logistics Limited) 45,000 4.50 90.00 37,500 3.75 75.00
Essar Shipping & Logistics Limited,
Cyprus 5,000 0.50 10.00 12,500 1.25 25.00
50,000 5.00 100.00 50,000 5.00 100.00
ii) 0.01% CCCPPS of Rs. 10/- each
Essar Ports Limited (formerly known
as Essar Shipping Ports &
Logistics Limited) 9,000,000 900.00 100.00 – – 0.00
9,000,000 900.00 100.00 – – 0.00
4 RESERVES AND SURPLUS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Surplus / (deficit) in the statement of profit and loss
Opening balance (5.30) (1.73)
Add: loss for the current year (3.28) (3.57)
Net deficit in the statement of profit and loss (8.58) (5.30)
5 SHARE APPLICATION MONEY
The Company has received Rs. 95 lakhs (P.Y. Rs. Nil) towards share application money. The Company proposes to
issue, 9,50,000 (P.Y. Rs. Nil) number of CCCPPS of par value of Rs.10/- before March 31, 2013.
6 SHORT TERM BORROWINGS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Unsecured
12.5% Loans repayable on demand-from related parties
(refer note 17) 50.00 –
Total 50.00 –
247
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
7 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(a) Application money received for allotment of securities 5.00 525.00
(Share application money received in excess of the authorised
capital has been classified as other current liabilities)
(b) Capital creditors 221.71 195.03
(c) Other liabilities
(i) Statutory dues (withholding taxes) 0.58 –
(ii) Interest accrued but not due on borrowings 5.84 –
Total 233.13 720.03
8 SHORT TERM PROVISIONS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Others
Provisions for taxation (net of advance tax) 0.47 –
Total 0.47 –
9 CAPITAL WORK IN PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Expenditure during construction
Opening Balance 183.00 –
Add: Additions during the year
Interest and finance Cost 10.72 –
Professional and consultancy expenses 95.27 2.76
General expenses 2.94 180.24
Less: Income (Interest & profit on sale of mutual fund,
net of tax provision) (17.10) –
Total 274.83 183.00
10 LONG TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Other loans and advances (unsecured and considered good)
Prepaid expenses 507.38 507.38
Cenvat receivable 19.53 18.76
Total 526.91 526.14
248 Annual Report 2011-12
Notes forming part of financial statements
11 OTHER ASSETS
(Rs. in lakhs)
Particulars Non current Current
As at As at As at As at
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
Others (unsecured and considered good)
Interest accrued on fixed deposits – – 6.59 –
Share issue expenses 6.18 – 1.58 –
Total 6.18 – 8.17 –
12 CASH AND BANK BALANCES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
A. Cash and cash equivalents
Balances with banks
– On current accounts 42.60 10.59
[A] 42.60 10.59
B. Other bank balances
Margin deposits with original maturity
of less than 12 months (lien against
bank guarantee) 416.33 –
[B] 416.33 –
Total cash and bank balances [A+B] 458.93 10.59
13 OTHER EXPENSES
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
Auditors' remuneration (refer note below) 3.10 1.16
Other establishment expenses 0.18 2.41
Total 3.28 3.57
Auditors remuneration includes
As auditor 1.00 1.00
For other assurance services 2.00 0.16
For reimbursement of expenses 0.10 –
Total 3.10 1.16
249
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
14 CONTINGENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Dividend on compulsorily convertible cumulative participating
preference shares* 0.00* –
* amount is less than Rs.1,000/-
15 CAPITAL COMMITMENTS AND OTHER COMMITMENTS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Estimated amount of contract remaining to be executed on
capital account and not provided for tangible fixed assets 43,500.00 –
16 EARNINGS PER SHARE:
The calculation of the basic and diluted earnings per share is based on the following data:
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
Earnings/(loss) for the year for the purpose of earning
per share (Rs. in lakhs) (net loss for the year) (3.28) (3.57)
Unpaid dividend on compulsorily convertible cumulative
participating preference shares (Rs. in lakhs) (0.00)* –
Loss attributable to equity shareholders (Rs. in lakhs) (3.28) (3.57)
No. of equity shares at the beginning of the year 50,000 50,000
No. equity shares issued during the year – –
No. of equity shares at the end of the year 50,000 50,000
Weighted average number of equity shares outstanding during the year 50,000 50,000
Earnings per share - basic and diluted (Rs.) (6.55) (7.15)
Face value per share (Rs.) 10 10
* amount is less than Rs.1,000/-
Note:- 0.01% CCCPPS and share application money have not been considered for purpose of calculation of the
weighted average number of equity shares for dilution purposes as they are anti-dilutive.
17 RELATED PARTY TRANSACTIONS:
a) Holding companies :
(i) Essar Global Limited, Cayman Islands (ultimate holding company)
(ii) Essar Shipping & Logistics Limited, Cyprus (intermediate holding company)
(iii) Essar Ports Limited, immediate holding company (formerly known as Essar Shipping Ports & Logistics Ltd.)
b) Fellow subsidiary and other related parties where there have been transactions:
(i) Vadinar Oil Terminal Limited
(ii) Aarkay Holdings Limited
(iii) Essar Bulk Terminal (Salaya) Limited
(iv) Essar Steel India Limited
(v) Aegis Limited
(vi) Essar Bulk Terminal Paradip Limited
250 Annual Report 2011-12
Notes forming part of financial statements
The details of transactions with related parties
(Rs. in lakhs)
Nature of transactions Holding companies
Fellow subsidiary and Total
other related parties
March 31, March 31, March 31, March 31, March 31, March 31,
2012 2011 2012 2011 2012 2011
Share application money received
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 100.00 525.00 – – 100.00 525.00
Essar Bulk Terminal Paradip Limited – – 70.00 – 70.00 –
Refund of share application money
Essar Bulk Terminal Paradip Limited – – 70.00 – 70.00 –
Issue of preference share
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 900.00 – – – 900.00 –
Administration expenses*
Vadinar Oil Terminal Limited – – – 180.77 – 180.77
Reimbursement of expenses*
Essar Steel India Ltd. – – 8.78 – 8.78 –
Consultancy charges*
Aegis Limited – – 5.52 – 5.52 –
Interest expenses*
Essar Bulk Terminal (Salaya) Limited – – 5.84 – 5.84 –
Travelling expenses* –
Aarkay Holdings Limited – – – 0.37 – 0.37
Unsecured loans taken –
Essar Bulk Terminal (Salaya) Limited – – 50.00 – 50.00 –
Outstanding as on March 31, 2012
Share application money
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 100.00 525.00 – – 100.00 525.00
Unsecured loans
Essar Bulk Terminal (Salaya) Limited – – 50.00 – 50.00 –
Other current liabilities
Essar Bulk Terminal (Salaya) Limited – – 5.26 – 5.26 –
Aegis Limited – – 4.96 – 4.96 –
Aarkay Holdings limited – – – 0.58 – 0.58
Vadinar Oil Terminal Limited – – 180.77 180.77 180.77 180.77
Guarantee received
Essar Ports Limited (formerly known as
Essar Shipping Ports & Logistics Ltd.) 46,700.00 46,700.00 – – 46,700.00 46,700.00
* includes expenditure during construction period.
251
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
ESSAR PARADIP TERMINALS LIMITED
18 FOREIGN CURRENCY EXPOSURE
There were no forward / options contracts entered in to by the Company during the financials year to hedge its
foreign currency exposures.
19 BUSINESS SEGMENT AND GEOGRAPHICAL SEGMENT
The Company has one business segment of Jetty Operation, which is in feasibility-assessment stage and only one
geographical segment i.e. India.
20 The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and
Medium Enterprise Development Act, 2006 and hence disclosures relating to amount unpaid as at the end of the
year, together with interest paid/payable as required under the said Act has not been furnished and provision for
interest, if any, on delayed payments, is not ascertainable at this stage.
21 The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year
classification as per the requirement of the Revised schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
U. Venkat Rao Shailesh Sawa
Executive Director Director
Mumbai
May 26, 2012
252 Annual Report 2011-12
BOARD OF DIRECTORS
Rajiv Agarwal
Director
K. K. Sinha
Director
Shailesh Sawa
Director
R. N. Bansal
Director
Capt. Deepak Sachdeva
Director
VADINAR PORTS & TERMINALS LIMITED
REGISTERED OFFICE
Essar Refinery Site
39 KM Stone
Okha Highway (SH-25)
Khambalia
Dist. Jamnagar
Gujarat 361 305
AUDIT COMMITTEE
Rajiv Agarwal
K. K. Sinha
Shailesh Sawa
AUDITORS
Deloitte Haskins & Sells
CORPORATE OFFICE
Essar House
11, Keshavrao Khadye Marg
Mahalaxmi, Mumbai 400 034
253
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
Directors’ Report Directors’ Report
Your Directors have pleasure in presenting the third Annual Report together with the Audited Accounts of the Company
for the year ended March 31, 2012.
FINANCIAL RESULTS
The summary of financial results of your Company for the year ended March 31, 2012 is furnished below:
(Amount in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Total Revenue 21,611.19 –
Total Expenses 5,691.55 4.10
Profit/(Loss) for the year before interest, depreciation and tax 15,919.64 (4.10)
Finance cost 6,428.69 –
Depreciation and amortisation expenses 3,836.36 –
Profit / (Loss) before tax 5,654.59 (4.10)
Tax expenses 1,834.63 –
Profit / (Loss) after tax 3,819.95 (4.10)
OPERATIONAL HIGHLIGHTS
Your Company commenced operations with effect from April 1, 2011 and this is the first full year of operations of your
Company. Your Company has successfully handled 1.5 million metric tons (MMT) of product cargo and 3.3 MMT of
intermediate cargo during the year under review.
DIVIDEND
Ports & terminals sector is a highly capital intensive sector. With the view to conserve resources for future expansions,
your Directors have not recommended any dividend for the year under review.
FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year under review.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,
Shri. K. K. Sinha retires at the ensuing Annual General Meeting of the Company and being eligible, offers himself for
re-appointment.
Capt. Deepak Sachdeva and Shri. Dipankar Pal have been appointed as Additional Directors of the Company. They
hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice from a member
proposing the candidature of Capt. Deepak Sachdeva and Shri. Dipankar Pal as Directors of the Company.
AUDITORS
Your Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad having Registered
No.117365W retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. It
is proposed to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad as the Auditors of the
Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting.
HOLDING COMPANY
Your Company continues to be a subsidiary of Vadinar Oil Terminal Limited and indirect subsidiary of Essar Ports Limited.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPOTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the
Report of Board of Directors), Rules 1988, relating to Energy Conservation and Technology Absorption are not applicable
to your Company.
254 Annual Report 2011-12
The company has not earned any foreign exchange and
foreign exchange expenditure amounted to Rs. 0.65 lakhs
during the year under review.
PARTICULARS OF EMPLOYEES
There are no employees of the Company who received
remuneration as prescribed under Section 217(2A) of
the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors hereby state
that:
(a) in 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;
(c) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
and
(d) the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS
Your Directors express their sincere thanks and
appreciation to all the employees for their commendable
teamwork and contribution to the growth of the Company.
Your Directors also thank Gujarat Maritime Board, its
Bankers and other business associates for their continued
support and co-operation during the year.
For and on behalf of the Board
Shailesh Sawa Capt. Deepak Sachdeva
Mumbai Director Director
August 29, 2012
Directors’ Report
255
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
Auditors’ Report
TO THE MEMBERS OF
VADINAR PORTS & TERMINAL LIMITED
1. We have audited the attached Balance Sheet of
VADINAR PORTS & TERMINAL LIMITED (“the
Company”) as at 31st March, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of
the Company for the year ended on that date, both
annexed thereto. These financial statements are
the responsibility of the Company’s Management.
Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those Standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatements. An audit includes examining, on
a test basis, evidence supporting the amounts
and the disclosures in the financial statements.
An audit also includes assessing the accounting
principles used and the significant estimates made
by the Management, as well as evaluating the overall
financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report)
Order, 2003 (CARO) issued by the Central
Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to
in paragraph 3 above, we report as follows:
a. we have obtained all the information and
explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit;
b. in our opinion, proper books of account
as required by law have been kept by the
Company so far as it appears from our
examination of those books;
c. the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with
by this report are in agreement with the books
of account;
d. in our opinion, the Balance Sheet, the
Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are
in compliance with the Accounting Standards
referred to in Section 211(3C) of the Companies
Act, 1956;
e. in our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956 in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
i. in the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2012;
ii. in the case of the Statement of Profit and
Loss, of the Profit of the Company for the
year ended on that date; and
iii. in the case of the Cash Flow Statement, of
the cash flows of the Company for the year
ended on that date.
5. On the basis of the written representations received
from the Directors as on 31st March, 2012 taken
on record by the Board of Directors, none of the
Directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of
Section 274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 26, 2012
256 Annual Report 2011-12
Annexure to the Auditors’ Report
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company’s
business/activities/result, clauses (xii), (xiii), (xiv), (xv),
(xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets.
(b) The fixed assets were physically verified during
the year by the Management in accordance
with a regular programme of verification which,
in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals.
According to the information and explanation
given to us, no material discrepancies were
noticed on such verification.
(c) There was no disposal of fixed assets during
the year.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were
physically verified during the year by the
Management at reasonable intervals.
(b) In our opinion and according to the information
and explanation given to us, the procedures
of physical verification of inventories followed
by the Management were reasonable and
adequate in relation to the size of the Company
and the nature of its business.
(c) In our opinion and according to the information
and explanations given to us, the Company
has maintained proper records of its inventories
and no material discrepancies were noticed on
physical verification.
(iv) The Company has neither granted nor taken any
loans, secured or unsecured, to/from companies,
firms or other parties listed in the Register
maintained under Section 301 of the Companies
Act, 1956. Hence, the provision of clause (iii)(b) to (iii)
(g) of the Order is not applicable to the Company.
(v) In our opinion and according to the information
and explanations given to us, there is an adequate
internal control system commensurate with the size
of the Company and the nature of its business with
regard to purchases of inventory and fixed assets
and the sale of goods and services. During the
course of our audit, we have not observed any
major weakness in such internal control system.
(vi) In our opinion and according to the information and
explanations given to us, there are no contracts or
arrangements that need to entered into the register
maintained in pursuance of Section 301 of the
Companies Act, 1956.
(vii) According to the information and explanations given
to us, the Company has not accepted any deposit
from the public during the year. Hence, the provision
of clause (vi) of the Order is not applicable to the
Company.
(viii) In our opinion, the internal audit system of the
Company commensurate with the size of the
Company and the nature of its business.
(ix) We have broadly reviewed the cost records
maintained by the Company pursuant to the
Companies (Cost Accounting Records) Rules,
2011 prescribed by the Central Government under
Section 209(1)(d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed
cost records have been maintained. We have,
however, not made a detailed examination of the
cost records with a view to determine whether they
are accurate or complete.
(x) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company is generally regular in depositing
of undisputed dues, including Provident Fund,
Income-tax, Service Tax, Custom Duty, Cess,
and other material statutory dues applicable to
it with the appropriate authorities. As informed
to us, the provisions for Investment Education
and Protection Fund, Employee’s State
Insurance, Sales Tax, Wealth Tax and Excise
duty were not applicable to the Company
during the year.
(b) There were no undisputed amounts payable in
respect of above statutory dues in arrears as at
31st March, 2012 for a period of more than six
months from the date they became payable.
(c) There were no dues pending to be deposited
on account of any dispute in respect of Income-
tax, Service Tax, Custom Duty and Cess as on
31st March, 2012.
(xi) The Company has been registered for a period less
than five years. Hence the provision of clause (x) of
the Order is not applicable to the Company.
(xii) In our opinion and according to the information
and explanations given to us, the Company has
not defaulted in the repayment of dues to banks,
financial institutions.
(xiii) In our opinion and according to the information
257
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
and explanations given to us, the term loans have
been applied for the purposes for which they were
obtained, other than temporary deployment pending
application.
(xiv) In our opinion and according to the information and
explanation given to us, on the basis of review of
utilisation of funds, which is based on an overall
examination of the Balance Sheet of the Company
as at 31st March, 2012, we report that funds of Rs
16,598.75 raised on short-term basis have been
used during the year for long- term purpose.
(xv) To the best of our knowledge and according to the
information and explanations given to us, no fraud by
the Company and no material fraud on the Company
has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Khurshed Pastakia
Partner
(Membership No. 31544)
Mumbai
May 26, 2012
258 Annual Report 2011-12
Notes forming part of financial statementsBalance Sheet as at March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa Partner Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
(Rs. in lakhs)
Particulars Note As at As at
No. March 31, 2012 March 31, 2011
I. EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital 3 27,013.45 24,613.45
(b) Reserves and surplus 4 3,811.85 (8.10)
30,825.30 24,605.35
2 Share application money pending allotment 5 – 2,400.00
3 Non-current liabilities
(a) Long-term borrowings 6 53,425.42 47,560.32
(b) Deferred tax liabilities (Net) 31 1,834.63 –
(c) Other long-term liabilities 7 681.11 7,152.48
(d) Long-term provisions 8 22.80 –
55,963.96 54,712.80
4 Current liabilities
(a) Trade payables 9 7,171.04 660.91
(b) Other current liabilities 10 24,365.56 7,173.56
(c) Short-term provisions 11 1.21 –
31,537.81 7,834.47
Total 118,327.07 89,552.62
II. ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets 12 92,084.44 –
(ii) Capital work-in-progress 13 13,058.53 76,215.09
(b) Long-term loans and advances 14 2,026.70 3,613.39
(c) Other non-current assets 15 2,718.33 –
109,888.00 79,828.48
2 Current assets
(a) Inventories 16 85.59 –
(b) Trade receivables 17 982.83 –
(c) Cash and bank balance 18 54.84 325.69
(d) Short-term loans and advances 19 7,063.81 9,297.44
(e) Other current assets 20 252.00 101.01
8,439.07 9,724.14
Total 118,327.07 89,552.62
See accompanying notes forming part of the financial statements
259
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
Statement of Profit and Loss for the year ended March 31, 2012
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
(Rs. in lakhs)
Particulars Note For the year ended For the year ended
No. March 31, 2012 March 31, 2011
I. NET REVENUE FROM OPERATIONS 21 20,738.16 –
II. Other income 22 873.03 –
III. Total revenue (I + II) 21,611.19 –
IV. EXPENSES:
Operating expenses 23 4,808.80 –
Administrative, establishment and other expenses 24 684.83 4.10
Employee benefit expenses 25 197.92 –
Total 5,691.55 4.10
V. Profit / (loss) before interest, depreciation,
amortisation and tax (III - IV) 15,919.64 (4.10)
VI. Finance Cost 26 6,428.69 –
VII. Depreciation and amortisation expenses 12 3,836.36 –
VIII. Profit / (loss) before tax (V - VI - VII) 5,654.59 (4.10)
IX. Tax expense:
(1) Current tax - MAT 1,131.36 –
(2) MAT Credit (1,131.36)
(3) Deferred tax 31 1,834.63 –
X. Profit / (loss) for the year 3,819.95 (4.10)
XI. Earnings per equity share of
Rs. 10/- each fully paid up (in Rs.)
Basic EPS 30 1.55 (0.00)
Diluted EPS 30 1.42 (0.00)
See accompanying notes forming part of the financial statements
260 Annual Report 2011-12
Notes forming part of financial statementsCash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
(I) CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) before exceptional / extraordinary items for the year 5,654.59 (4.10)
Adjustment for:
Profit on sale of investments (7.38) –
Interest income - inter corporate deposits (585.99) –
Interest income - bank deposits (34.10) –
Interest and finance expenses 6,428.69 –
Depreciation 3,836.36 –
Cash flow from operation before changes in working capital 15,292.17 (4.10)
Adjustment for (increase) / decrease in operating assets :
Inventories Other long-term liabilities (85.59) –
Trade and other receivables (16.61) –
Adjustment for increase / (decrease) in operating liabilities :
Trade and other payables 23,485.29 –
Cash flow from operations 38,675.26 (4.10)
Income tax (paid) / refund (1,212.07) (257.53)
Net cash flow from / (used in) operating activities (I) 37,463.19 (261.63)
(II) CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure on fixed assets including capital advances (27,961.58) (16,450.17)
Interest income - inter corporate deposits 585.99 –
Interest income - bank deposits 34.10 –
Interest received - others – 25.21
Loans and advances given to other body corporates – (4,970.00)
Loans and advances repaid by body corporates 908.53 250.00
Investment in bank deposits (2,718.33) –
Increase / decrease in loans and advances and other current assets – (1,499.17)
Increase / decrease in current liabilities and provisions – (1,005.54)
Purchase of current investments (1,875.00) (2,055.75)
Proceeds from sale of current investments 1,882.38 2,770.86
Net cash flow from investing activities (II) (29,143.81) (22,934.56)
(III) CASH FLOW FROM FINANCING ACTIVITIES
Interest and finance expenses paid (8,200.93) (5,403.77)
Share application money received / (refunded) (950.00) 3,350.00
Bills accepted during the year 2,371.42 15,681.42
Bills repaid during the year (9,300.74) (17,593.32)
Proceeds from term loans 12,365.12 27,435.32
Repayments of term loans (4,875.00) –
Net cash flow from financing activities (III) (8,590.13) 23,469.65
261
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Khurshed Pastakia Rajiv Agarwal Shailesh Sawa
Partner Director Director
Mumbai Mumbai
May 26, 2012 May 26, 2012
Cash Flow Statement for the year ended March 31, 2012
(Rs. in lakhs)
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Net cash flow for the year (I + II + III) (270.85) (273.46)
Opening cash and cash equivalents 325.69 52.23
Closing cash and cash equivalents 54.84 325.69
Note:
A. Non- cash transaction
During the current year, the Company has issued 2,40,00,000 equity shares of Rs. 10/- each for 2,400.00 lakhs
against share application money received in previous year.
B. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 - “Cash
Flow Statement” referred to in Section 211 (3C) of the Companies Act, 1956.
See accompanying notes forming part of the financial statements.
262 Annual Report 2011-12
Notes forming part of financial statements
1 PARTICULARS
Vadinar Ports & Terminals Limited, a company
incorporated under the Companies Act, 1956 and
subsidiary of Vadinar Oil Terminal Limited started
commercial operations in April, 2011 to provide storage
and handling facilities to Essar Oil Limited required for
its refinery operations. The facilities include a marine
jetty, crude oil tanks, refined petroleum product and
intermediate tanks, a road gantry and interconnected
pipelines.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Accounting
The financial statements are prepared under the historical
cost convention, on accrual basis of accounting, and
are in accordance with generally accepted accounting
principles and in compliance with the applicable
Accounting Standards referred to in Sub-section (3C) of
Section 211 of the Companies Act, 1956.
2.2 Use of Estimates
The preparation of financial statements requires estimates
and assumptions to be made that affect the reported
amount of assets and liabilities on the reporting date and
the reported amounts of revenues and expenses during
the reporting period. Differences between the actual results
and estimates are recognised in the period in which the
results are known / materialised.
2.3 Revenue Recognition
Revenue on sale of products is recognised when the seller
has transferred to the buyer the property in the goods
for a price or when all significant risks and rewards of
ownership have been transferred to the buyer and the
seller retains no effective control of the goods transferred
to a degree usually associated with ownership and no
significant uncertainty exists regarding the amount of
consideration that will be derived from the sale of goods.
Revenue on transactions of rendering services is
recognised either under the completed service contract
method or under the proportionate completion method, as
appropriate. Performance is regarded as achieved when
no significant uncertainty exists regarding the amount
of consideration that will be derived from rendering the
services.
2.4 Tangible Assets, Depreciation and Amortisation
Tangible assets are recorded at cost less accumulated
depreciation and impairment loss, if any. Cost is
inclusive of non-refundable duties and taxes and cost
of construction including erection, installation and
commissioning expenses, borrowing costs, expenditure
during construction, inseparable know how costs, gains
or loss earned / incurred during the trial run and other
incidental costs, where applicable.
Depreciation on plant and machinery and buildings is
provided as per straight line method at the rates provided
under Schedule XIV to the Companies Act, 1956. These
assets need to be handed over to Kandla Port Trust under
the concession agreement entered into by the holding
company, Vadinar Oil Terminal Ltd. and are amortised
over a period of concession agreement of 30 years from
October 8, 1997 or their useful life of assets whichever is
lower. Assets costing less than Rs. 5,000/- per item are
depreciated at 100% in the year of acquisition.
Depreciation on additions / deductions to tangible assets
made during the year is provided on a pro-rata basis
from/up to the date of such additions / deductions, as the
case may be.
2.5 Intangible Assets and Amortisation
Intangible assets are recognised only when it is probable
that the future economic benefits that are attributable
to the asset will flow to the Company and the cost of
the asset can be measured reliably. Intangible assets
are stated at cost less accumulated amortisation and
impairment loss, if any.
Intangible assets are amortised over the best estimate of
their useful lives, subject to a rebuttable presumption that
such useful lives will not exceed ten years.
2.6 Capital Work in Progress and Expenditure During
Constructions
Direct expenditure on projects or assets under
construction or development is shown under capital work-
in-progress.
Advances on capital account include progress / milestone
based payments made under the contracts for projects,
assets under construction and other capital advances until
the same are allocated to fixed assets and other accounts,
as applicable and the same is shown under long term
loans and advances.
Expenditure incidental to the construction of projects
that take substantial period of time to get ready for their
intended use is accumulated as expenditure during
construction pending allocation to fixed assets and other
accounts, as applicable, on completion of the projects.
2.7 Borrowing Cost
Borrowing costs that are directly attributable to the
acquisition, construction/ development of qualifying asset
are amortised over the tenure of the loan and capitalised
as a part of cost of such asset till such time that the
asset is not capitalised; and is charged to the statement
of profit and loss thereafter. A qualifying asset is one that
necessarily takes substantial period of time to get ready
for the intended use.
263
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of fixed assets
are amortised and charged to the statement of profit and
loss, over the tenure of the loan.
2.8 Foreign Currency Transactions
Transactions denominated in foreign currency are
accounted at the rate prevailing on the transaction
date. Monetary items denominated in foreign currency
are translated at the rate prevailing at the balance
sheet date. Gains / losses on conversion / translation /
settlement of foreign currency transactions are recognised
in the statement of profit and loss or expenditure during
construction, as applicable.
2.9 Taxes on Income
Current tax are provided as per the provisions of the
Income Tax Act, 1961.
The tax effect of timing differences resulting between
taxable income and accounting income and are capable of
reversal in one or more subsequent periods are recorded
as a deferred tax asset or deferred tax liability. They are
measured using the substantively enacted tax rates and
tax regulations as at the balance sheet date.
Deferred tax assets arising on account of brought forward
losses and unabsorbed depreciation under tax laws are
recognised, only if there is virtual certainty of its realisation,
supported by convincing evidence. Deferred tax assets on
account of other timing differences are recognised only to
the extent there is reasonable certainty of its realisation.
2.10 Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised in the accounts for present
obligations arising out of past events and would probably
require an outflow of economic resources, the amount of
which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, the existence
of which will be confirmed by the occurrence or non
occurrence of one or more uncertain future events not
wholly within the control of the Company or a present
obligation that is not recognised because a reliable
estimate of the liability cannot be made or likelihood of an
outflow of resources is remote. Contingent assets are not
recognised or disclosed in the financial statements.
2.11 Impairment of Assets
The Company assesses on each balance sheet date
whether there is any indication that an asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss
and is recognised in the statement of profit and loss. If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset
is reflected at the recoverable amount but limited to the
carrying amount that would have been determined (net of
depreciation / amortisation) had no impairment loss been
recognised in prior accounting periods.
2.12 Inventories
Stores and Spares: valued at lower of cost and net
realisable value. Cost is determined on a moving weighted
average basis. Net realisable value is the estimated current
procurement price in the ordinary course of the business.
2.13 Other Income
Interest income is accounted on time proportionate basis.
Dividend income is accounted for when the right to receive
it is established.
2.14 Investments
Long-term investments (excluding investment properties),
are carried individually at cost less provision for diminution,
other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of
cost and fair value. Cost of investments include acquisition
charges such as brokerage, fees and duties.
2.15 Employee Benefits
(a) Contribution to recognised provident fund,
which is a fixed percentage of eligible
employees’ salary is charged to the statement
of profit and loss.
(b) The liability for gratuity is actuarially
determined at year end and funded to Life
Insurance Corporation of India to the extent
demanded by them and balance taken to
provisions.
(c) The contribution towards superannuation,
funded by payment to Life Insurance
Corporation of India, is a fixed percentage
of the salary of eligible employees under a
defined contribution plan and is charged to
Statement of Profit and Loss.
(d) Provision for all accumulated compensated
absences of eligible employees is based on an
independent actuarial valuation.
264 Annual Report 2011-12
Notes forming part of financial statements
3 SHARE CAPITAL
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs No. of shares Rs. in lakhs
(a) Authorised
Equity shares of Rs. 10/- each 280,000,000 28,000.00 280,000,000 28,000.00
280,000,000 28,000.00 280,000,000 28,000.00
Issued, subscribed and fully paid up
Equity shares of Rs. 10/- each 270,134,457 27,013.45 246,134,457 24,613.45
Other long-term liabilities 270,134,457 27,013.45 246,134,457 24,613.45
(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs No. of shares Rs. in lakhs
Equity shares of Rs. 10/- each
At the beginning of the year 246,134,457 24,613.45 246,134,457 24,613.45
Add: issue of shares 24,000,000 2,400.00 – –
Outstanding at the end of the year 270,134,457 27,013.45 246,134,457 24,613.45
(c) Terms / rights attached to shares
The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible
for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.
(d) Shares held by holding/ultimate holding company and/or their subsidiaries/associates and details of the
shareholding more than 5% shares in the Company
Particulars As at March 31, 2012 As at March 31, 2011
No. of shares Rs. in lakhs % No. of shares Rs. in lakhs %
Equity shares of Rs. 10/- each
Vadinar Oil Terminal Limited, the
holding company 191,480,000 19,148.00 70.9% 191,480,000 19,148.00 77.8%
Essar Ports Limited, the ultimate
holding company 78,654,457 7,865.45 29.1% 54,654,457 5,465.45 22.2%
270,134,457 27,013.45 100.0% 246,134,457 24,613.45 100.0%
(e) In the year 2009-10, the Company issued 19,14,80,000 equity shares of Rs. 10/- each, as fully paid up to Vadinar
Oil Terminal Limited, the immediate holding company, for a consideration other than cash.
4 RESERVE AND SURPLUS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Surplus / (deficit) in statement of profit and loss
Opening balance (8.10) (4.00)
Add (less) : Profit (loss) for the year 3,819.95 (4.10)
Closing balance 3,811.85 (8.10)
265
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
5 SHARE APPLICATION MONEY
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Share application money pending allotment – 2,400.00
Total – 2,400.00
During the previous year, the Company received Rs. 3,350.00 lakhs towards share application money, out of
which the Company refunded Rs. 950.00 lakhs and issued 2,40,00,000 number of equity shares of Rs.10/- each,
amounting to Rs. 2,400.00 lakhs, during the current year.
6 LONG TERM BORROWINGS
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, 2012 March 31, 2012 March 31, 2012 March 31, 2012
Secured long term borrowings
Term loans
– Rupee term loans from banks 53,425.42 47,560.32 6,500.00 4,875.00
Total 53,425.42 47,560.32 6,500.00 4,875.00
Less : Amount disclosed under the head
“Other Current Liabilities” (refer note 10) – – 6,500.00 4,875.00
Total long term borrowings 53,425.42 47,560.32 – –
(a) Secured rupee term loan from banks carry interest rates ranging from 12% to 14% (base rate +/- spread) per
annum. Repayment of term loan is in 40 quarterly instalments from quarter ending September, 2011 to quarter
ending June, 2021.
(b) Term loans are secured by first mortgage and charge of all present and future movable and immovable
assets/properties of the Company. The loan is further secured by Corporate Guarantee of Essar Ports Limited
(formerly known as Essar Shipping Ports & Logistics Limited ) of Rs. 15,000 lakhs.
7 OTHER LONG TERM LIABILITIES
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(i) Lease rent received in advance 434.16 – 1,213.09 1,111.11
(ii) Acceptances 246.95 7,152.48 – –
(Issued under letter of credit in favour of
the Company by lending banks and to be
converted into term loans)
Total 681.11 7,152.48 1,213.09 1,111.11
Less: Amount disclosed under the head “Other
Current Liabilities” (refer note 10) – – 1,213.09 1,111.11
Total Other Long Term Liabilities 681.11 7,152.48 – –
266 Annual Report 2011-12
Notes forming part of financial statements
8 LONG TERM PROVISIONS
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Provision for employee benefits
(i) Provision for compensated absences
(refer note 36(C) ) 17.04 – 1.21 –
(ii) Provision for gratuity (refer note 36(C)) 5.76 – – –
Total 22.80 – 1.21 –
Less: Amount disclosed under the head
“Short Term Provisions” (refer note-11) – – 1.21 –
Total long term provisions 22.80 – – –
9 TRADE PAYABLE
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Trade payable (refer note 32) 7,171.04 660.91
Total 7,171.04 660.91
10 OTHER CURRENT LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Current maturities of long term borrowing (refer note 6 (a) & (b)
for details of interest rates, security and guarantees.) 6,500.00 4,875.00
(B) Lease rent received in advance (refer note 7) 1,213.09 1,111.11
(C) Share application money pending allotments and due for refund
or in excess of issued capital. – 950.00
(D) (i) Creditors for capital expense (refer note 32) 16,358.32 37.00
(ii) Other liabilities (statutory dues for tax deducted as source,
professional tax, book overdraft and others) 294.15 200.45
Total 24,365.56 7,173.56
11 SHORT TERM PROVISIONS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Provision for employee benefits (refer note 8)
– Provision for compensated absences 1.21 –
Total 1.21 –
267
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
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2011).
268 Annual Report 2011-12
Notes forming part of financial statements
13 CAPITAL WORK-IN-PROGRESS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Capital work-in-progress 12,877.60 67,338.70
(B) Expenditure during construction (see below) 180.93 8,876.39
Total 13,058.53 76,215.09
Expenditure During Construction As at Incurred Capitalised As at
March 31, During During March 31,
2011 the Year the Year 2012
Stores and consumables 60.04 100.67 160.71 –
Consultancy and professional fees 1,259.00 103.48 1,313.97 48.51
Hire charges - equipment 46.20 – 46.20 –
Customs duty and clearing expenses 612.19 – 612.19 –
Travelling and courier expenses 1.19 0.04 1.23 –
Insurance expenses 56.61 52.66 83.13 26.14
Stamp duty and registration charges 2,525.31 – 2,525.31 –
Lease rent expenses 358.31 54.18 412.49 –
Finance charges and bank Interest 6,099.35 1,818.97 7,894.53 23.78
Employee cost – 219.37 136.87 82.50
Manning management / commitment fees 8.52 – 8.52 –
11,026.72 2,349.37 13,195.15 180.93
Less: Income from lease rent 1,212.12 – 1,212.12 –
Less: Income from operations during trial run 759.48 – 759.48 –
Less : Interest and profit on sale of mutual fund
(net of tax) 178.73 – 178.73 –
Total expenditure during construction 8,876.39 2,349.37 11,044.82 180.93
14 LONG TERM LOANS AND ADVANCES
(Rs. in lakhs)
Particulars Non current portion Current portion
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Unsecured, considered good
(A) Capital advance 143.33 3,126.99 – –
(B) Security deposit 216.15 0.15 – –
(C) Other loans and advances
(i) Prepaid expense 287.61 318.72 287.33 412.39
(ii) Balance with excise authorities – – 2,397.22 3,782.54
(iii) Advance income tax (net of provision) 248.25 167.53
(iv) MAT credit available 1,131.36 – – –
Total 2,026.70 3,613.39 2,684.55 4,194.93
Less: Amount disclosed under the head
“short term loans and advances” (refer note 19) 2,684.55 4,194.93
Total long term loans and advances 2,026.70 3,613.39 – –
269
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
15 OTHER NON-CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Balance with banks
(i) Margin money
– In time deposits (debt service reserve account as per the term
loan agreement) with maturity of more than 12 months 1,354.00 –
– In time deposits (lien marked against facility of letter of credit)
with maturity of more than 12 months 1,364.33 –
Total non-current assets 2,718.33 –
16 INVENTORIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Stores and spares (lower of cost or net realisable value) 85.59 –
Total 85.59 –
17 TRADE RECEIVABLES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Trade receivables - unsecured, considered good
(i) Outstanding for more than 6 months from its due date – –
(ii) Others 982.83 –
Total 982.83 –
18 CASH & BANK BALANCE
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Cash and cash equivalents
Balance with bank in current accounts 54.84 325.69
Total cash and bank balance 54.84 325.69
19 SHORT TERM LOANS AND ADVANCES(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
Unsecured, considered good
(A) Loans and advances to related parties (including accrued interest) (refer note 37) 4,039.88 5,098.41 (B) Advance to related parties for expense (refer note 37) 326.57 – (C) Other loans and advances (i) Advances to vendor 3.68 3.90 (ii) Balance with excise authorities (refer note 14) 2,397.22 3,782.54 (iii) Prepaid expense (refer note 14) 287.33 412.39 (iv) Advance to staff 9.13 0.20
Total 7,063.81 9,297.44
270 Annual Report 2011-12
Notes forming part of financial statements
20 OTHER CURRENT ASSETS
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Income receivable – 101.01
(B) Other receivables 225.64 –
(C) Interest accrued on bank deposits 26.36 –
Total 252.00 101.01
21 REVENUE FROM OPERATIONS
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Sale of services (refer note (i) below) 19,525.07 –
(B) Other operating revenue (refer note (ii) below) 1,213.09 –
Total 20,738.16 –
Notes:
(i) Sale of services comprises:
Crude and petroleum products storage revenue 18,773.64 –
Petroleum products handling revenue 751.43 –
Total 19,525.07 –
(ii) Other operating revenue
Berth hire charges 1,213.09 –
Total 1,213.09 –
Total (i) + (ii) 20,738.16 –
22 OTHER INCOME
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Interest income
(i) Interest on bank deposit 34.10 –
(ii) Interest on loans and advances 585.99 –
(B) Profit on sale of units of mutual fund 7.38 –
(C) Other income 245.56 –
Total 873.03 –
271
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
23 OPERATING EXPENSES
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Hire charges 3,650.00 –
(B) Lease rent 212.53 –
(C) Operation and maintenance service expenses 497.59 –
(D) Consumption of stores and spares 16.60 –
(E) Manning - management expenses 330.14 –
(F) Repairs and maintenance 0.44 –
(G) Agency expenses 0.81 –
(H) Insurance expense 100.69 –
Total 4,808.80 –
24 ADMINISTRATIVE, ESTABLISHMENT AND OTHER EXPENSE
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Consultancy and professional charges 530.89 –
(B) Auditors’ remuneration – –
(i) As auditor 4.00 4.00
(ii) Other assurance services 5.00 –
(iii) Reimbursement of expenses 0.20 0.10
(C) Travelling expenses 3.76 –
(D) Communication expenses 0.18 –
(E) Office rent expenses 112.90 –
(F) Other expenses 27.90 –
Total 684.83 4.10
25 EMPLOYEE BENEFIT EXPENSES(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Salaries, wages and allowances 182.97 –
(B) Contribution to provident fund and other funds (refer note 36) 13.35 –
(C) Staff welfare expenses 1.60 –
Total 197.92 –
26 FINANCE COST(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
(A) Interest expenses 6,277.55 –
(B) Other borrowing cost 151.14 –
Total 6,428.69 –
272 Annual Report 2011-12
Notes forming part of financial statements
27 COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Committed liability for future lease rental charges in respect
of land taken on lease
a. Payable not later than 1 year 141.10 115.15
b. Payable later than 1 year and not later than 5 years 623.03 460.59
c. Payable later than 5 years 4,541.15 4,849.63
5,305.27 5,425.37
(B) Claims against the company not acknowledged as debt 78.85 –
(C) Estimated amount of contracts remaining to be executed
on capital account and not provided for 10,221.86 4,922.63
Total 15,605.98 10,348.00
28 EXPENDITURE IN FOREIGN CURRENCY
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
Travelling expenses 0.65 –
Total 0.65 –
29 EXPOSURE IN FOREIGN CURRENCY
The Company has not entered into any forward/ option exchange contract to hedge its foreign currency exposure
The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are
given below:
Amount payable/ receivable on account of foreign currency :
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Amount in Lakhs Amount in Lakhs
INR USD INR USD
(A) Capital advance – – 418.59 9.38
(B) Advance to vendors * 0.09 0.00 – –
Total 0.09 0.00 418.59 9.38
* Amount of advance to vendor is less than USD 1000
273
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
30 EARNINGS PER SHARE
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
BASIC EARNING PER SHARE:
Net profit / (loss) for the year (Rs. in lakhs) 3,819.95 (4.10)
Weighted average number of equity shares outstanding during the year 246,396,752 246,134,457
Basic earnings per share (in Rs.) 1.55 (0.00)
DILUTED EARNING PER SHARE:
(I) Net profit / (loss) for the year 3,819.95 (4.10)
(II) Weighted number of equity shares
Weighted average number of equity shares outstanding at the
beginning of the year 246,134,457 246,134,457
Weighted average number of equity shares equivalent to the
advance share application money received (considered to be
issued at par) 23,737,705 –
Total weighted number of equity shares 269,872,162 246,134,457
Diluted earnings per share (in Rs.) (I / II)** 1.42 (0.00)
** In previous year, share application money was not considered for calculating diluted earnings per share as they
were anti-dilutive.
31 DEFERRED TAX LIABILITIES
(Rs. in lakhs)
Particulars As at As at
March 31, 2012 March 31, 2011
(A) Deferred tax liability
– Due to timing difference related to depreciation 2,644.90 –
2,644.90 –
(B) Deferred tax asset
– Due to unabsorbed depreciation 810.27 –
810.27 –
Net deferred tax liability (A - B) 1,834.63 –
32 CREDITORS UNDER MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT :
The Company has not received any intimation from its supplier’s regarding their status under the Micro, Small and
Medium Enterprise Development Act, 2006 and hence disclosures relating to amount unpaid as at the end of the
year, together with interest paid/ payable as required under the said Act has not been furnished and provision for
interest, if any, on delayed payments, is not ascertainable at this stage.
33 CIF VALUE OF IMPORTS
(Rs. in lakhs)
Particulars For the year For the year
ended ended
March 31, 2012 March 31, 2011
– Capital goods 3,684.42 –
– Components and spare parts 78.22 –
Total 3,762.64 –
274 Annual Report 2011-12
Notes forming part of financial statements
34 CONSUMPTION OF IMPORTED AND INDIGENOUS COMPONENT AND SPARE PARTS
Particulars For the year ended For the year ended
March 31, 2012 March 31, 2011
Rs. in lakhs % of total Rs. in lakhs % of total
Imported – 0% – –
Indigenous 16.60 100% – –
Total 16.60 100% – –
35 SEGNMENTAL REPORTING :
The Company operates in only one segment of ports and terminals business and only one geographical segment
i.e. India.
36 EMPOYEE BENEFITS :
The Company has various employee benefits as under:
I. Defined contribution plans
a. Provident fund
b. Superannuation fund
During the year, the Company has recognised the following amounts in the statement of profit and loss:
(Rs. in lakhs)
Particulars As at
March 31, 2012
(i) Employer’s contribution to provident fund 7.40
(ii) Employer’s contribution to superannuation fund 0.63
Total 8.03
II. Defined benefit plans
a. Contribution to gratuity fund
b. Provision for compensated absences (CA)
In accordance with Accounting Standard-15 (Revised 2005), relevant disclosures are as under:
(A) Changes in present value of defined benefit obligation
(Rs. in lakhs)
Particulars Gratuity CA
(funded) (non funded)
As at As at
March 31, 2012 March 31, 2012
(i) Present value of defined benefit obligation at the
beginning of the year – –
(ii) Current service cost 5.88 5.22
(iii) Interest cost 1.23 1.23
(iv) Plan amendments – –
(v) Acquisitions / (transfers) 17.73 15.41
(vi) Benefits paid ** (1.33) (1.33)
(vii) Actuarial (gain) / loss on obligations 2.79 (2.28)
Present value of defined benefit obligation
at the end of the year 26.30 18.25
275
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
(B) Changes in the fair value of plan assets
(Rs. in lakhs)
Particulars Gratuity CA
(funded) (non funded)
As at As at
March 31, 2012 March 31, 2011
(i) Fair value of plan assets at the beginning of the year – –
(ii) Acquisition adjustment / transfer in / (transfer out) 21.88 –
(iii) Expected return on plan assets – –
(iv) Actuarial gains / (losses) – –
(v) Contributions by the employer – –
(vi) Benefits paid (1.33) –
Fair value of plan assets at the end of the year 20.55 –
(C) Amount recognized in the Balance Sheet
(Rs. in lakhs)
Particulars Gratuity CA
(funded) (non funded)
As at As at
March 31, 2012 March 31, 2012
(i) Present value of defined benefit obligation at the
end of the year 26.31 18.25
(ii) Fair value of plan assets at the end of the year 20.55 –
(Liability) / asset recognised in the balance sheet (5.76) (18.25)
(refer note 8 - long term provisions)
(D) Expenses recognised in the statement of profit and loss / expenditure during construction
(Rs. in lakhs)
Particulars Gratuity CA
(funded) (non funded)
For the year For the year
ended March ended March
31, 2012 31, 2011
(i) Current service cost 5.88 5.22
(ii) Interest cost 1.23 1.23
(iii) Expected return on plan assets – –
(iv) Past service costs – –
(v) Net actuarial (gain) / loss recognised in the period 2.79 (2.28)
Total expenses recognised in the statement of
profit and loss / (EDC) 9.90 4.17
(E) Category of plan assets
The Company’s plan assets in respect of gratuity are funded through the group schemes of the Life
Insurance Corporation of India
276 Annual Report 2011-12
Notes forming part of financial statements
(F) Experience History
(Rs. in lakhs)
Particulars Gratuity CA
(funded) (non funded)
For the year For the year
ended March ended March
31, 2012 31, 2011
(i) Defined benefit obligation (26.30) (18.25)
(ii) Plan assets at the end of the period 20.55 –
(iii) Funded status (5.76) (18.25)
(iv) Experience gain / (loss) adjustments on plan liabilities (4.10) 1.30
(v) Experience gain / (loss) adjustments on plan assets – –
(vi) Actuarial gain / (loss) due to change on assumptions 1.32 0.98
(G) Actuarial assumptions
i) General Assumption
Particulars Gratuity CA
(funded) (non funded)
For the year For the year
ended March ended March
31, 2012 31, 2012
(i) Discount rate (per annum) 8.00% 8.50%
(ii) Rate of return on plan assets (for funded scheme) 0.00% N.A.
(iii) Expected retirement age of employees (years) 58 58
(iv) Withdrawal rate of employees 5.00% 5.00%
(v) Rate of increase in compensation 9.00% 9.00%
Mortality rates considered are as per the published rates in the Life Corporation (1994-96) Mortality table
ii) Leave Policy
Leave balance as at the valuation date and each subsequent year following the valuation date to the
extent not availed by the employee (maximum to the extent of 120 days) is available for encashment on
separation from the Company.
(H) The Company did not have any employees in the previous year and hence comparative information is not
provided.
37 RELATED PARTY DISCLOSURE
A Holding Company:
Vadinar Oil Terminal Limited (immediate holding company)
Essar Ports Limited (formerly known as Essar Shipping Ports & Logistics Limited) (intermediate holding
company)
Essar Shipping & Logistic Limited, Cyprus (intermediate holding company)
Essar Global Limited (ultimate holding company)
B Other related parties / affiliated where there have been transactions:
Aegis Limited
Arkay Holdings Limited
277
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
Essar Bulk Terminal Limited
Essar Bulk Terminal Paradip Limited
Essar Engineering Services Limited
Essar House Limited
Essar Information Technology Limited
Essar Infrastructure Services Limited
Essar Investments Limited
Essar Logistics Limited
Essar Oil Limited
Essar Projects (India) Limited
Essar Project Management Consultants Limited
Essar Services India Limited
Essar Shipping Limited
Futura Travels Limited
C Key management personnel:
Mr. Girish Joshi - Manager (w.e.f. 18.10.2011)
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Port and terminal and technical service income
Essar Oil Limited – – 19,525.07 – – – 19,525.07 –
Berth hire charges
Vadinar Oil Terminal Limited 1,213.09 1,326.57 – – – – 1,213.09 1,326.57
Interest income
Essar Bulk Terminal Paradip Limited – – 1.19 1.53 – – 1.19 1.53
Essar Ports Limited* 438.70 128.08 – – – – 438.70 128.08
Essar Bulk Terminal Limited – – 146.10 124.01 – – 146.10 124.01
Sub total 438.70 128.08 147.29 125.54 – – 585.99 253.62
Sale of SPM
Vadinar Oil Terminal Limited 3,358.44 – – – – – 3,358.44 –
Recovery of expenses
Essar Ports Limited* 49.07 – – – – – 49.07 –
Lease rent expenses
Essar Oil Limited – – 104.25 67.87 – – 104.25 67.87
Vadinar Oil Terminal Limited – 0.83 – – – – – 0.83
Sub total – 0.83 104.25 67.87 – – 104.25 68.70
Rent expenses
Essar House Limited – – 11.04 – – – 11.04 –
Essar Infrastructure Services Limited – – 53.04 – – – 53.04 –
Arkay Holdings Limited – – 60.13 – – – 60.13 –
Sub total – – 124.21 – – – 124.21 –
* formerly known as Essar Shipping Ports & Logistics Limited.
278 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Hire charges
Vadinar Oil Terminal Limited 3,650.00 – – – – – 3,650.00 –
Operation and maintenance expenses
Vadinar Oil Terminal Limited 497.59 – – – – – 497.59 –
Professional / consultancy charges
Essar Engineering Services Limited – – – 16.55 – – – 16.55
Essar Information Technology Limited – – – 1.82 – – – 1.82
Essar Investments Limited – – 57.39 – – – 57.39 –
Essar Services India Limited – – 22.75 – – – 22.75 –
Aegis Limited – – 25.83 10.07 – – 25.83 10.07
Essar Ports Limited* 399.00 – – – – – 399.00 –
Vadinar Oil Terminal Limited 314.08 840.66 – – – – 314.08 840.66
Sub total 713.08 840.66 105.97 28.44 – – 819.05 869.10
Other miscellaneous expenses
Vadinar Oil Terminal Limited 26.49 – – – – – 26.49 –
Futura Travels Limited – – 3.65 – – – 3.65 –
Sub total 26.49 – 3.65 – – – 30.14 –
Purchase of fixed asset (CWIP /
EDC during the year)
Essar Engineering Services Limited – – 323.37 – – – 323.37 –
Essar Project (India) Limited – – 31,400.72 12,484.99 – – 31,400.72 12,484.99
Essar Project Management Consultants
Limited – – 121.97 110.69 – – 121.97 110.69
Essar Engineering Services Limited – – – 1,411.24 – – – 1,411.24
Essar Logistics Limited – – – 7.27 – – – 7.27
Essar Oil Limited – – 26.75 – – – 26.75 –
Vadinar Oil Terminal Limited 116.93 – – – – – 116.93 –
Essar Investments Limited – – 42.31 – – – 42.31 –
Sub total 116.93 – 31,915.12 14,014.19 – – 32,032.05 14,014.19
Loans / advances / security deposit
received back
Essar Bulk Terminal Paradip Limited – – 20.00 – – – 20.00 –
Essar Bulk Terminal Limited – – 1,200.00 – – – 1,200.00 –
Sub total – – 1,220.00 – – – 1,220.00 –
Loans / advances / security deposit given
Essar House Limited – – 14.00 – – – 14.00 –
Essar Infrastructure Services Limited – – 52.00 – – – 52.00 –
Essar Shipping Limited – – – 150.00 – – – 150.00
Essar Bulk Terminal Limited – – – 1,311.61 – – – 1,311.61
Essar Bulk Terminal Paradip Limited – – – 21.53 – – – 21.53
Essar Ports Limited* – 3,615.27 – – – – – 3,615.27
Sub total – 3,615.27 66.00 1,483.14 – – 66.00 5,098.41
* formerly known as Essar Shipping Ports & Logistics Limited
279
Notes forming part of financial statements
COMPANY PROFILE REVIEW OF FACILITIES MANAGEMENT INSIGHT CSR GOVERNANCE FINANCIALS
VADINAR PORTS & TERMINALS LIMITED
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Issue of equity shares
Essar Ports Limited* 2,400.00 – – – – – 2,400.00 –
Advance received towards share
application money
Vadinar Oil Terminal Limited – 950.00 – – – – – 950.00
Essar Ports Limited* – 2,400.00 – – – – – 2,400.00
Sub total – 3,350.00 – – – – – 3,350.00
Remuneration to key managerial person
Mr. Girish Joshi # – – – – 11.43 – 11.43 –
* formerly known as Essar Shipping Ports & Logistics Limited
# figure does not include the amount payable towards gratuity and compensated absence by the Company as the same is calculated for the
company as a whole on actuarial basis
Outstanding as on year end
(Rs. in lakhs)
Nature of balances Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Debtors
Essar Oil Limited – – 982.83 – – – 982.83 –
Sundry creditors / capital creditors
Essar Project (India) Limited – – 14,865.43 – – – 14,865.43 –
Essar Project Management Consultants
Limited – – 121.07 – – – 121.07 –
Essar Logistics Limited – – – 0.04 – – – 0.04
Aegis Limited – – 3.72 9.06 – – 3.72 9.06
Essar House Limited – – 0.92 – – – 0.92 –
Arkay Holdings Limited – – 6.88 – – – 6.88 –
Essar Engineering Services Limited – – – 33.88 – – – 33.88
Futura Travels Limited – – 1.06 – – – 1.06 –
Essar Oil Limited – – – 150.29 – – – 150.29
Essar Infrastructure Services Limited – – 3.78 – – – 3.78 –
Vadinar Oil Terminal Limited 6,999.18 1,584.36 – – – – 6,999.18 1,584.36
Sub total 6,999.18 1,584.36 15,002.86 193.27 – – 22,002.04 1,777.63
Loans and advances
Essar Ports Limited* 326.57 – – – – – 326.57 –
Essar Projects (India) Limited – – – 2,501.97 – – – 2,501.97
Essar Investments Limited – – 10.00 – – – 10.00 –
Essar Engineering Services Limited – – 105.68 – – – 105.68 –
Sub total 326.57 – 115.68 2,501.97 – – 442.25 2,501.97
Income received in advance
Vadinar Oil Terminal Limited 1,647.25 – – – – – 1,647.25 –
Security deposit
Essar House Limited – – 14.00 – – – 14.00 –
Essar Infrastructure Services Limited – – 52.00 – – – 52.00 –
Essar Shipping Limited – – 150.00 – – – 150.00 –
Sub total – – 216.00 – – – 216.00 –
* formerly known as Essar Shipping Ports & Logistics Limited
280 Annual Report 2011-12
Notes forming part of financial statements
(Rs. in lakhs)
Nature of Transaction Holding company Other related Key management
parties personnel Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Inter corporate deposit given
(including accrued interest)
Essar Shipping Limited – – – 150.00 – – – 150.00
Essar Bulk Terminal Limited – – 29.78 1,311.61 – – 29.78 1,311.61
Essar Ports Limited* 4,010.10 3,615.27 – – – – 4,010.10 3,615.27
Essar Bulk Terminal Paradip Limited – – – 21.53 – – – 21.53
Sub total 4,010.10 3,615.27 29.78 1,483.13 – – 4,039.89 5,098.41
Advance received towards share
application money
Vadinar Oil Terminal Limited – 950.00 – – – – – 950.00
Essar Ports Limited* – 2,400.00 – – – – – 2,400.00
Sub total – 3,350.00 – – – – – 3,350.00
Other receivable
Essar Ports Limited* 49.07 – – – – – 49.07 –
Guarantees given by others on
behalf of company
Essar Ports Limited* 15,000.00 15,000.00 – – – – 15,000.00 15,000.00
* formerly known as Essar Shipping Ports & Logistics Limited
38 As on March 31, 2012, the Company’s current liabilities exceeded its current assets by Rs. 23,098.73 lakhs due to
inclusion of capital creditors of Rs. 16,358.32 lakhs and current maturity of long term debts (repayable within the
next one year) amounting to Rs. 6,500.00 lakhs. The Company is in discussions with banks for raising long term
debt for repayment of capital creditors, which along with the operating cash profits during FY 2013 will be available
for meeting the current liabilities falling due during the year and also providing liquidity to the Company. Accordingly,
the Company has presented these financial statements on a going concern basis.
39 Previous year’s figures have been regrouped / reclassified wherever necessary, to conform to current year
classification as per the requirement of the Revised Schedule VI notified under the Companies Act, 1956.
For and on behalf of the Board of Directors
Rajiv Agarwal Shailesh Sawa
Director Director
Mumbai
May 26, 2012
Essar Ports Limited,
Equinox Business Park,
LBS Marg, Kurla (W),
Mumbai - 400070
www.essarports.com