Esl Ar 07 08

Dear Members, As you are aware, the Registered Office of the Company has been shifted.
The new address is as under:
Essar Shipping Ports & Logistics Limited, Administrative Building, Essar Refinery Complex, Okha Highway (SH 25), Taluka Khambalia, District Jamnagar, Pin Code: 361 305, Gujarat State.
Members are requested to take note of the said change. All correspondence to the Company should henceforth be sent to the above address only.
Manoj Contractor Company Secretary
BOARD OF DIRECTORS
Shashi Ruia Chairman Ravi Ruia Vice Chairman Anshuman Ruia Director Sanjay Mehta Managing Director A. R. Ramakrishnan Wholetime Director V. Ashok Wholetime Director R. N. Bansal Independent Director N. Srinivasan Independent Director K. V. Krishnamurthy Independent Director Dilip J. Thakkar Independent Director AUDIT COMMITTEE R. N. Bansal N. Srinivasan Anshuman Ruia
COMPENSATION COMMITTEE Ravi Ruia Anshuman Ruia Sanjay Mehta
SHARE TRANSFER & SHAREHOLDERS GRIEVANCE COMMITTEE Ravi Ruia Sanjay Mehta A. R. Ramakrishnan V. Ashok
REGISTERED OFFICE Administrative Building, Essar Refinery Complex Okha Highway (SH - 25), Taluka Khambhalia Distt. - Jamnagar Gujarat 361305
CORPORATE OFFICE Essar House 11, Keshavrao Khadye Marg Mahalaxmi, Mumbai 400 034
REGISTRARS & SHARE TRANSFER AGENTS Data Software Research Company Private Limited Sree Sovereign Complex 22, 4th Cross Street, Trustpuram, Kodambakkam Chennai 600 024 e-mail: dsrcmd@vsnl.com
COMPANY SECRETARY Manoj Contractor
AUDITORS Deloitte Haskins & Sells
32nd Annual Report 2007-2008
Essar Shipping Ports & Logistics Limited

(formerly known as Essar Shipping Limited)
NOTICE TO MEMBERS
Notice is hereby given that the Thirty-second Annual General Meeting of Essar Shipping Ports & Logistics Limited will be held at the Registered Office of the Company at Administrative Building, Essar Refinery Complex, Okha Highway (SH - 25), Taluka Khambhalia, Distt. Jamnagar, Gujarat 361305 at 3.30 p.m. on Saturday, September 27, 2008, to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the Profit and Loss Account for the year ended March 31, 2008 and the Audited Balance Sheet as on that date and the Reports of the Board of Directors and Auditors thereon. To appoint a Director in place of Mr. N. Srinivasan, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Sanjay Mehta, who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Mr. Ravi Ruia, who retires by rotation and being eligible, offers himself for re-appointment. To re-appoint Messrs. Deloitte Haskins & Sells, Chartered Accountants as Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration. candidature for the office of Director, be and is hereby appointed as Director of the Company. 8. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary resolution: RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 311 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 and subject to the approval of the Central Government, Mr. Sanjay Mehta be and is hereby reappointed as Managing Director of the Company for a period of three years with effect from September 18, 2008 on the terms and conditions as set out in the Explanatory Statement annexed hereto. RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year, the Managing Director shall be paid remuneration by way of salary, perquisites and allowances as specified above or as may be decided by the Board of Directors. RESOLVED FURTHER THAT the terms and conditions set out for appointment and payment of remuneration herein, may be altered and varied from time to time by the Board of Directors of the Company as it may, in its discretion deem fit so as not to exceed the limits specified under Schedule XIII to the Companies Act, 1956 (including any statutory modification or reenactment thereof, for the time being in force) or any amendments made thereto. RESOLVED FURTHER THAT the Agreement may be terminated by either party (Company or the Managing Director) by giving the other three months prior notice of termination in writing. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take all necessary steps including filing of necessary applications, forms, letters, etc., with the Government and other authorities to give effect to the above resolution. 9. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary resolution: RESOLVED THAT in partial modification of the resolution passed by the members at the Thirty-first Annual General Meeting of the Company held on September 25, 2007, approving the appointment and terms of remuneration of Mr. V. Ashok, Wholetime Director and in accordance with the provisions of Sections 198, 269, 309, 311 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, the Company hereby approves the variation in the terms of remuneration of Mr. V. Ashok, Wholetime Director for the remaining period of his tenure in office, 32nd Annual Report 2007-2008
2.
3.
4.
5.
SPECIAL BUSINESS: 6. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary resolution: RESOLVED THAT Mr. K. V. Krishnamurthy, who was appointed as an Additional Director by the Board of Directors pursuant to Section 260 of the Companies Act, 1956 and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956, proposing his candidature for the office of Director, be and is hereby appointed as Director of the Company. 7. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary resolution: RESOLVED THAT Mr. Dilip J. Thakkar, who was appointed as an Additional Director by the Board of Directors pursuant to Section 260 of the Companies Act, 1956 and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956, proposing his 2
with effect from April 1, 2008, as set out in the Explanatory Statement annexed hereto. RESOLVED FURTHER THAT all other terms and conditions of appointment of Mr. V. Ashok, Wholetime Director as approved earlier by the members, shall remain unchanged. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take all necessary steps as may be necessary to give effect to the above resolution. By Order of the Board 6.
the Company the details of such folios together with the Share Certificates for consolidating their holdings in one folio. Members are further advised to hold the shares in dematerialised form, as the trading of the shares on Bombay Stock Exchange and National Stock Exchange where the shares of your Company are listed is in compulsory demat mode. Members are informed that in case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote. In terms of Section 109A of the Companies Act, 1956, members are entitled to make nomination in respect of shares held by them in physical form. Members desirous of making nominations are requested to send their requests in Form 2B, in duplicate, to the Secretarial Department at the Registered Office of the Company or to the Registrars and Share Transfer Agents - Data Software Research Company Private Limited. Members desiring any information regarding the accounts are requested to write to the Company at Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai 400 034 atleast 7 days before the date of the Meeting to enable the Company keep the information ready. The Chairman of the Audit Committee of Directors shall be present at the Annual General Meeting to reply to the queries of members on the Annual Accounts of the Company.
7.
MANOJ CONTRACTOR Company Secretary Jamnagar July 29, 2008 Notes: 1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of himself on a poll. The proxy need not be a member of the Company. Proxy forms in order to be effective should be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting. Members / Proxies should bring the attendance slip duly filled in for attending the meeting. The Register of Members and Share Transfer Books of the Company will remain closed from Monday, September 22, 2008 to Saturday, September 27, 2008, both days inclusive. The members are requested to immediately notify, in their own interest, the change in their mailing address to the Companys Registrars and Share Transfer Agents, Data Software Research Company Private Limited, Sree Sovereign Complex, 22, 4 th Cross Street, Trustpuram, Kodambakkam, Chennai 600 024, Tel : 91-44-2483 3738, Fax: 91-44-2483 4636. Members who are holding shares in identical order of names in more than one folio are requested to send to 8.
9.
2. 3.
10. Appointment / Re-appointment of Directors: At the ensuing Annual General Meeting, Mr. N. Srinivasan, Mr. Sanjay Mehta and Mr. Ravi Ruia retire by rotation and being eligible offer themselves for reappointment. Mr. K. V. Krishnamurthy and Mr. Dilip J. Thakkar are proposed to be appointed as Directors. The information pertaining to the aforesaid Directors in terms of Clause 49 of the Listing Agreement with the Stock Exchanges is annexed hereto. 11. The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of the special business at item Nos. 6 to 9 hereinabove, is annexed hereto.
4.
5.

(formerly known as Essar Shipping Limited) ANNEXURE TO NOTICE: EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.
Item No. 6 Mr. K. V. Krishnamurthy was appointed as an Additional Director of the Company with effect from June 20, 2008. In terms of Section 260 of the Companies Act, 1956 and in accordance with Article 73 of the Articles of Association of the Company, Mr. Krishnamurthy holds office upto the date of ensuing Annual General Meeting. Accordingly, the resolution at item No. 6 of the notice is being proposed for his appointment as Director of the Company. The Company has received a notice from a member under Section 257 of the Companies Act, 1956, with requisite deposit, proposing the name of Mr. Krishnamurthy as a candidate for the office of Director of the Company. Mr. K. V. Krishnamurthy, a Chartered Accountant by profession is a fellow member of the Indian Institute of Bankers and was a member of its Governing Board. He has over thirty-three 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, leading nationalised banks. 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. Your Board is of the opinion that the vast experience of Mr. Krishnamurthy would be beneficial for the future growth of the Company. Your Directors accordingly recommend the resolution at Item No. 6 of the Notice for your approval. None of the Directors, except Mr. Krishnamurthy, is concerned or interested in this resolution. Item No. 7 Mr. Dilip J. Thakkar was appointed as an Additional Director of the Company with effect from June 20, 2008. In terms of Section 260 of the Companies Act, 1956 and in accordance with Article 73 of the Articles of Association of the Company, Mr. Thakkar holds office upto the date of ensuing Annual General Meeting. Accordingly, the resolution at item No. 7 of the notice is being proposed for his appointment as Director of the Company. 4 The Company has received a notice from a member under Section 257 of the Companies Act, 1956, with requisite deposit, proposing the name of Mr. Thakkar as a candidate for the office of Director of the Company. Mr. Thakkar, a practicing Chartered Accountant by profession since last forty-six 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. He is also a Director on the Board of various Indian public limited companies. Your board is of the opnion that the vast experience of Mr. Thakkar would be beneficial for the future growth of the Company. Your Directors accordingly recommend the resolution at Item No. 7 of the Notice for your approval. None of the Directors, except Mr. Thakkar, is concerned or interested in this resolution. Item No. 8 Mr. Sanjay Mehta was appointed as the Managing Director of the Company with effect from September 18, 2005 for a period of three years. The term of appointment of Mr. Mehta as the Managing Director expires on September 17, 2008. Considering his vast experience and management skills, the Board at its meeting held on July 29, 2008, has reappointed him as the Managing Director with effect from September 18, 2008 for a further period of three years. Mr. Mehta has an Honors Degree from London School of Economics and a Masters Degree from London Business School. Prior to joining Essar in June 2000, Mr. Mehta was head of the South East Asia Investment Banking Desk at American Marine Advisors Inc., New York; Simpson, Spence & Young; Hambros Bank and Goldman Sachs. Mr. Mehta has experience in raising capital in the US financial markets. Mr. Mehta also has vast experience of ports & terminals, logistics and the shipping industry. After considering various factors, the Remuneration Committee recommended the remuneration for Mr. Mehta. The Board of Directors, accepting the recommendation of the Remuneration Committee, have approved the following remuneration to be paid to Mr. Mehta with effect from September 18, 2008: 1. Remuneration : Basic salary in the range of Rs. 1,00,000/- to Rs. 3,50,000/- per month, as may be determined by the Board of Directors or such other authority as may be delegated by the Board of Directors. 2. In addition to the Basic Salary, Mr. Mehta shall be entitled to perquisites and allowances like accommodation (furnished or otherwise) or house rent 32nd Annual Report 2007-2008
allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses/allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; education allowance; leave travel concession for self and his family including dependents; club fees; premium for medical insurance; commission and all other payments in the nature of perquisites and allowances as agreed by the Board of Directors or such other authority as may be delegated by the Board of Directors from time to time upto the limit of Rs. 10,00,000/- per month. As per the rules of the Company, Mr. Mehta is eligible for Provident Fund, Gratuity and Superannuation, which payments shall not be included for the purpose of calculation of the managerial remuneration. The appointment of Mr. Mehta as Managing Director is subject to the approval of the Central Government. Mr. Sanjay Mehta has been associated with the Company for past eight years and under his leadership, the Company has made significant progress to transform itself into an integrated logistics solutions provider. The Board is of the opinion that his appointment as the Managing Director of the Company would be in the best interest of the Company and accordingly the resolution at Item No. 8 of the Notice is recommended for Members approval. None of the Directors, except Mr. Mehta is concerned or interested in this resolution. This explanation together with the accompanying Notice is and should be treated as an abstract under Section 302 of the Companies Act, 1956. Item No. 9 The members had, at the Annual General Meeting of the Company held on September 25, 2007, approved the appointment of Mr. V. Ashok as Wholetime Director of the Company for a period of five years commencing from December 7, 2006 on the terms and conditions as contained in the resolution appointing Mr. Ashok as Wholetime Director. Mr. Ashok is presently responsible for the Finance, Administration and other functions of the Company. He has also been entrusted with the responsibility of overseeing the finance and business functions of the subsidiaries of the Company. The Remuneration Committee reviewed the remuneration package of the Wholetime Director with a view to align the package with the best corporate practices prevailing in the industry. After considering various factors, the Remuneration Committee recommended an increase in the remuneration payable to Mr. Ashok.
The Board of Directors, accepting the recommendation of the Remuneration Committee has revised the remuneration payable to Mr. Ashok with effect from April 1, 2008 as per particulars given hereinbelow: 1. Remuneration : Basic salary in the range of Rs. 2,00,000/- to Rs. 5,00,000/- per month, as may be determined by the Board of Directors or such other authority as may be delegated by the Board of Directors. 2. In addition to the Basic Salary, Mr. Ashok shall be entitled to perquisites and allowances like accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses/allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; education allowance; leave travel concession for self and his family including dependents; club fees; premium for medical insurance; commission and all other payments in the nature of perquisites and allowances as agreed by the Board of Directors or such other authority as may be delegated by the Board of Directors from time to time up to the limit of Rs. 10,00,000/- per month. As per the rules of the Company, Mr. Ashok is eligible for Provident Fund, Gratuity and Superannuation, which payments shall not be included for the purpose of calculation of the managerial remuneration. All other terms and conditions of his appointment in terms of the resolution passed by the members on September 25, 2007 remain unchanged. The Board is of the opinion that the increase in the remuneration would be in the interest of the Company and accordingly the resolution at Item No. 9 of the Notice is recommended for members approval. None of the Directors, except Mr. Ashok is concerned or interested in this resolution. This explanation together with the accompanying Notice is and should be treated as an abstract under Section 302 of the Companies Act, 1956.
By Order of the Board
MANOJ CONTRACTOR Company Secretary Jamnagar July 29, 2008

Annexure to Notice: Details of Directors seeking re-appointment / appointment at the Thirty-second Annual General Meeting in pursuance of Clause 49 of the Listing Agreement. Mr. N. Srinivasan Mr. N. Srinivasan is a Commerce Graduate and a member of the Institute of Chartered Accountants of India since 1955 and was a senior partner in Fraser & Ross / Deloitte Haskins & Sells until 1997. He has been closely associated with the development of the profession of Accounting and Auditing in India. He was Chairman of the Southern India Regional Council and also a Central Council Member of the Institute of Chartered Accountants of India. Mr. Srinivasan has been associated with various Business Organisations and has served as Deputy President of the Associated Chamber of Commerce and Industry of India (ASSOCHAM), New Delhi, Chairman of The Madras Chamber of Commerce and Industry and President of The Indo-American Chamber of Commerce among others. He has also served as a Director on the Board of The Institute of Internal Auditors Inc., Florida USA, Director of Indian Bank, Chennai, Senate Member of the Annamalai University and Honorary Professor, Institute of Financial Management and Research, Chennai. Mr. Srinivasan is also a Director on the Board of various Indian public limited companies viz. United Breweries (Holdings) Ltd., Best & Crompton Engineering Ltd., McDowell Holdings Ltd., Tractors & Farm Equipments Ltd., The Andhra Pradesh Paper Mills Ltd., India Cements Ltd., India Cements Capital Ltd., Ador Multiproducts Ltd., Amco Batteries Ltd., The United Nilgiri Tea Estates Company Ltd., GATI Ltd., Ador Fontech Ltd., Tafe Motors and Tractors Ltd., and U. B. Engineering Ltd. Mr. Srinivasan is also a member of the Audit Committees of India Cement Ltd., Amco Batteries Ltd., The Andhra Pradesh Paper Mills Ltd. and India Cement Capital Ltd. He is the Chairman of the Audit Committee of GATI Ltd., Tractors & Farm Equipments Ltd. and U.B. Engineering Ltd. He is also the Chairman of the Investors Grievance Committee of United Breweries (Holdings) Ltd. Mr. Srinivasan does not hold any shares in the Company. Mr. Sanjay Mehta Mr. Sanjay Mehta, has a Honors Degree from London School of Economics and a Masters Degree from London Business School. Mr. Mehta has been with the shipping industry for the last fifteen years. His area of specialisation is shipping and project finance. Prior to joining Essar, Mr. Mehta was head of the South East Asia and Asia Pacific Maritime Financing Desk of American Marine Advisors Inc., New York. Prior to this he was associated with Simpson, Spence & Young, Hambros Bank and Goldman Sachs. Mr. Mehta is also a Director on the Board of following Indian public limited companies viz. Vadinar Oil Terminal Ltd., Essar 6 Logistics Ltd., Essar Bulk Terminal Ltd. and Essar Bulk Terminal (Salaya) Ltd. Mr. Mehta does not hold any shares in the Company. Mr. Ravi Ruia Mr. Ravi Ruia, is an Engineer by training. His rare business and entrepreneurial abilities with an eye for details has enabled the Essar Group to be ranked among the top industrial houses in the Country. Essar has emerged as the fourth largest industrial house in India in terms of assets. Mr. Ruia, commenced his business career in the family business way back in 1969. He ably assisted his elder brother Mr. Shashi Ruia in steering the Essar Group to its current pre-eminent position. The Essar Group has diversified business interests in specific areas such as Shipping Ports & Logistics, Steel, Power, Telecom, Oil & Gas, Construction and Financial Services. The Essar Group has emerged as a leading business conglomerate in India. Mr. Ruia is a widely travelled industrialist. He is connected with several industry and trade associations both at the national and bilateral level. Mr. Ruia has provided the foresight and vision to mastermind Essar Groups strategy so as to consolidate Essars activities through backward and forward integration. In this process the created synergy has been utilised to propel Essars rapid growth. Mr. Ruia is also a Director on the Board of various Indian public limited companies viz. Vodafone Essar Ltd., Essar Oil Ltd., Essar Steel Ltd., Essar Investments Ltd., Essar Power Ltd., India Securities Ltd., and Essar Steel (Hazira) Ltd. Mr. Ruia does not hold any shares in the Company. Mr. K. V. Krishnamurthy Mr. K. V. Krishnamurthy, a Chartered Accountant by profession is a fellow member of the Indian Institute of Bankers and was a member of its Governing Board. He has over thirty-three 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 Bank of India and Syndicate Bank, leading nationalised banks. 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, viz., Asset Reconstruction Co. (India) Ltd., Sundaram BNP Paribas Fund Trustee Co. Ltd., Rap Media Ltd., Centrum Capital Ltd., Centrum Direct Ltd., Essel Propack Ltd., Borosil Glass Works Ltd., Essar Steel Ltd., Thirumalai Chemicals Ltd., V.V.F. Industries Ltd. and KPIT Cummins Ltd. Mr. Krishnamurthy is the Chairman of the Audit Committee of Borosil Glass Works Ltd., VVF Industries Ltd. and Centrum Capital Limited. He is also a member of the Audit Committee of Asset Reconstruction Company (India) Limited, Sundaram BNP Paribas Trustees Co. Ltd., Essel Propack Limited, Essar Steel Ltd., Thirumalai Chemicals Ltd. and KPIT Cummins Ltd. Mr. Krishnamurthy does not hold any shares in the Company. Mr. Dilip J. Thakkar Mr. Thakkar, a practicing Chartered Accountant by profession since last forty-six years and 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. He is also a Director on the Board of various Indian public limited companies viz., Omega Management Services Ltd., Poddar Developers Ltd., Panasonic Battery India Co. Ltd., Essar Oil Ltd., Thirumalai Chemicals Ltd., The Ruby Mills Ltd., PAE Ltd., Himatsingka Seide Ltd., Indo Count Industries Ltd., Walchandnagar Industries Ltd., Garware Offshore Services Ltd. and Garware Polyester Ltd. Mr. Thakkar is the Chairman of the Audit Committee of Essar Oil Ltd., Thirumalai Chemicals Ltd., PAE Ltd. and Himatsingka Seide Ltd. He is also a member of the Audit Committee of Panasonic Battery India Co. Ltd., and Walchangnagar Industries Ltd. He is the Chairman of the Investors Grievances Committee of Panasonic Battery India Co. Ltd. and a member of the Investors Relations Committee of Essar Oil Ltd. and Share Transfer Committee of Thirumalai Chemicals Ltd. Mr. Thakkar does not hold any shares in the Company.

DIRECTORS REPORT
To the Members of Essar Shipping Ports & Logistics Limited Your Directors take pleasure in presenting the Thirty-second Annual Report of your Company together with Audited Accounts for the year ended March 31, 2008. Pursuant to the provisions of section 219 of the Companies Act, 1956 and as permitted by the Securities and Exchange Board of India (SEBI), abridged accounts are enclosed. Any member interested in obtaining a copy of unabridged accounts may write to the Company Secretary at the Registered Office. FINANCIAL ANALYSIS: A summary of the standalone and consolidated financial results of your Company for the year ended March 31, 2008 are furnished below: (Rs. in crore) Standalone Particulars Total Income Total Expenditure EBITDA Less: Interest & Finance charges Less: Provision for Depreciation Profit before tax Less: Provision for Tax Profit before Share of Minority Interest Add : Share of Minority Interest Profit after tax Add: Balance in Profit and Loss Account as per last Balance Sheet Less: Transfer to Tonnage Tax Reserve Balance carried forward to Balance Sheet DIVIDEND: During the year, your Company has consolidated the ports and terminals businesses into its fold and also proposes to bring in the oilfields & drilling services business through a merger. These businesses are highly capital intensive and nurturing these new businesses to their optimum value would require significant capital commitments. These investments will add value in the coming years. In order to plough back earnings into the growth of these businesses, no dividend for the current year has been recommended. For the year ended 31-03-2008 1,063.93 598.73 465.20 89.19 106.64 269.37 (27.70) 241.67 241.67 589.93 (30.00) 801.60 For the year ended 31-03-2007 1,045.13 719.00 326.13 94.48 90.51 141.14 (7.16) 133.98 133.98 490.45 (34.50) 589.93 Consolidated For the year ended 31-03-2008 2,255.67 1,460.36 795.31 266.55 221.48 307.28 (43.68) 263.60 13.81 277.41 1,010.83 (30.00) 1,258.24 For the year ended 31-03-2007 1,682.70 1,301.41 381.28 104.25 112.03 165.01 (7.26) 157.75 157.75 887.58 (34.50) 1,010.83
MANAGEMENT DISCUSSION & ANALYSIS:

RE-ORGANISATION OF THE SHIPPING, PORTS AND LOGISTICS BUSINESS: Your Company has re-organised its business with certain other businesses of the Essar Group to become a one-of-a-kind
integrated logistics company. As part of this re-organisation exercise, your Company has brought the ports and terminal assets under its fold. In order to become a fully integrated logistics solutions provider, it is proposed to also bring the oilfields & drilling services business carried on by Essar Oilfields Services Limited in its fold. With investments in dry bulk ports and oil terminals, crude and dry bulk carriers, port to plant logistics and interests in oil field services, this re-organisation will enable your Company to provide end-toend logistics solutions to its customers. The business model adopted by your Company is unique in nature with no peer group having advantage of this model. The business model is driven on the intrinsic demand for transportation services and logistics & cargo handling infrastructure required by the growing steel, power generation and refining industry in India and worldwide. In order to reflect the new identity, the name of your Company has also been changed to Essar Shipping Ports & Logistics Limited.
Holding Structure: The holding structure upon completion of the re-organisation will be as under:
Essar Global Ltd. (Cayman Islands) Essar Shipping & Logistics Ltd. (Cyprus) 76.46%* Essar Shipping Ports & Logistics Ltd. (India) 100% Essar Port & Terminals Ltd. (Mauritius) 74%*** Essar Bulk Terminal Ltd. (India) 100% Vadinar Oil Terminal Ltd. (India) 100% ** Essar Oilfields Services Ltd. (Mauritius) 100% Essar Bulk Terminal (Salaya) Ltd. (India) 100% Essar Logistics Ltd. (India) 100% Energy Transportation International Ltd. (Bermuda) 100% Essar International Ltd. (Guernsey) 100% Energy II Ltd. (Bermuda)
* Alongwith other promoter group companies ** Upon merger of India Shipping *** Balance 26% held by Essar Steel Limited
Essar Ports & Terminals Limited: As a part of the re-organisation, your Company has incorporated a new subsidiary Essar Ports & Terminals Limited (EPTL) in Mauritius. EPTL will be the holding company for the ports and terminals business of the group. During the year under review, EPTL acquired 74% shareholding of Essar Bulk Terminal Limited (EBTL), 90.50% shareholding of Vadinar Oil Terminal Limited (VOTL) and 100% shareholding of Essar Bulk Terminal (Salaya) Limited. Subsequently, EPTL has acquired the balance 9.50% shareholding of VOTL, as a result of which VOTL has become a wholly owned subsidiary of EPTL. The principal activities covered by its subsidiaries are as follows: a. Vadinar Oil Terminal Limited (VOTL) VOTL is in the business of providing crude oil and petroleum products storage, handling and terminalling facilities. VOTL has invested in port and terminal facilities to support a 10.5 million metric tonnes per annum (mmtpa) refinery capacity at Vadinar in Gujarat on the West Coast of India set up by Essar Oil Limited (EOL). The facilities of VOTL include a product port, crude oil and petroleum product tankages, single point mooring, cross country and sub sea pipelines, rail and road gantry. The terminal commissioned operations in July 2007 and hence the financial results reflect nine months of operations. During the year under review, VOTL registered a Total Income of Rs. 150.36 crore. EBITDA for the year under review, stood at Rs. 104.53 crore, registering an operating margin of 69%. Interest and
Depreciation for the year was Rs. 161.84 crore and Rs. 88.28 crore respectively. VOTL is currently expanding its capacity to support EOLs refinery capacity of upto 34 mmtpa from the existing 10.5 mmtpa. b. Essar Bulk Terminal Limited (EBTL) EBTL is setting up an all weather deep draft dry bulk port at Hazira in Gujarat located on the West Coast of India for import of iron ore, pellets, limestone, steel products and other dry bulk cargoes and export of finished steel and other dry bulk products. The facilities would include a dedicated all weather channel, 550 metres long jetty, ship unloaders, storage facilities for finished products, conveyors for transportation of raw materials to the stack house, a rail network, dredgers, tugs and mooring boats. The port facility is currently under construction and is expected to start commercial operations during the calendar year 2009. Essar Bulk Terminal (Salaya) Limited (EBTL Salaya) EBTL Salaya is setting up a dry bulk port facility at Salaya in Gujarat. The port will handle import of coal and export of pet coke and other bulk cargoes.
c.
Essar Oilfields Services Limited (EOSL): As part of the re-organisation process, EOSL will become a wholly owned subsidiary of your Company through a merger of India Shipping (holding 100% shares of EOSL) with the Company. Your Company is in the process of filing applications with the relevant Courts for the merger. Through the process of merger as mentioned above, based on a swap ratio of 32 shares at a valuation of Rs. 220/- per 9

share of your Company for every 100 shares of India Shipping, 18.96 crore fresh shares of your Company will be issued to Essar Shipping & Logistics Limited (Cyprus) (being the only shareholder of India Shipping), as a consideration for the merger. EOSL is in the business of providing onshore and offshore contract drilling services to leading oil and gas producers worldwide. EOSL operates a fleet of a third generation semisubmersible offshore rig and twelve land rigs. The clientele of EOSL includes, Gujarat State Petroleum Corporation Limited, India (GSPCL), Petrobras, Brazil (through intermediaries) and Essar Oil Limited, India. The semisubmersible offshore rig has been contracted with GSPCL on long term charter basis. Five land rigs are contracted with Petrobras (through intermediaries) and four land rigs are contracted with Essar Oil Limited. Out of the thirteen rigs, seven rigs are already operational and remaining land rigs are being refurbished and should be employed thereafter. Essar Logistics Limited (ELL): ELL is in the business of providing transhipment, lighterage and trucking services. Going forward, ELL is exploring opportunities in logistics handling of large project cargoes. The Total Income of ELL for the year under review was Rs. 874.28 crore as compared to Rs. 644.40 crore during the previous year. The increase in the revenues was on account of increased cargo handled during the year under review as compared to the previous year. Interest during the year under review was Rs. 15.30 crore as compared to Rs. 9.71 crore in the previous year. The increase in interest was on account of increase in total debt from Rs. 3.16 crore during the previous year to Rs. 151.51 crore during the year under review, due to acquisition of certain shipping assets. Net Profit after Tax for the year under review increased by 27% and stood at Rs. 28.80 crore as compared to Rs. 22.60 crore during the previous year. CONSOLIDATED FINANCIAL RESULTS: As a result of the integration of the above-mentioned businesses, the Total Income of your Company increased from Rs. 1,682.70 crore during the previous year to Rs. 2,255.67 crore in the current year. The increase in revenues was on account of increased earnings in the logistics business being operated by ELL and commencement of operations of the crude oil and petroleum product terminal being operated by VOTL. The Total Income for the year included: i. ii. iii. Profit on Sale of Ships in the Sea Transportation Business Rs. 198.11 crore Profit on Sale of Investments Rs. 107.56 crore and Notional Currency Exchange difference Rs. 80.43 crore.
900 800 700 600 500 400 300 200 100 0
Interest and Finance charges for the year increased to Rs. 266.55 crore as compared to Rs. 104.25 crore for the previous year mainly due to interest expenses for VOTL which was Rs. 161.84 crore for the year. The increase in Depreciation for the year to Rs. 221.48 crore is largely due to commencement of operations by VOTL. Net Profit after Tax for the year increased to Rs. 277.44 crore compared to Rs. 157.75 crore in the previous year thereby registering an increase of 76%.
2500 2000
TOTAL INCOME 2,256 1,683 34.1%
INR Crore
1500 1000 500 0
FY 07
FY 08
EBITDA 759
INR Crore
381
108.6%
FY 07
FY 08
300 250
PROFIT AFTER TAX
277
INR Crore
200 150 100 50 0
158 75.9%
FY 07
FY 08
STANDALONE RESULTS (SEA TRANSPORTATION BUSINESS): During the year under review, your Company achieved a Total Income of Rs. 1,063.93 crore as compared to Rs. 1,045.13 crore during the previous year. The Net Profit for the year increased from Rs. 133.98 crore during the previous year to Rs. 241.67 crore in the current year. This is largely due to Profit on Sale of Ships of Rs. 197.10 crore as compared to Rs. 12.47 crore during the previous year. The Net Profit for the year under review also includes a notional currency exchange difference of Rs. 75.65 crore. Income and EBIDTA The Income during the year under review of this segment marginally increased to Rs. 1,063.93 crore from Rs. 1,045.13 crore as compared to the previous year. The EBITDA increased by 42% from Rs. 326.12 crore in the previous year to Rs. 465.20 crore during the year under review. 32nd Annual Report 2007-2008
The Gross Profit for the year increased by 109% and stood at Rs. 795.31 crore as compared to Rs. 381.29 crore during the previous year. 10
Profitability 1200
262 269 1045 1064
300 250
thorough due diligence by BP of the Companys systems and procedures. Integrated Bulk and Petroleum Product Transportation Group This group provides integrated bulk transportation and petroleum products transportation services to various refineries, steel mills and power generation plants along the Asian and South East Asian coast through various employment contracts including Contracts of Affreightment (COAs). This segment contributed Rs. 500.43 crore to the total income during the financial year as compared to Rs. 666.15 crore during the previous year. This group operates of a fleet of five Capesizes, ten Mini Bulk carriers, four Tugs and two Diving Support Vessels. These vessels are employed on COAs with major steel mills in India and South East Asia to provide supply chain logistics services along the Indian Coast and for global movement of commodities like iron ore, coal, etc. The Diving Support Vessels have been chartered to assist mid sea terminalling facilities along the west coast of India. INDUSTRY REVIEW AND PROSPECTS: Crude Oil Transportation: Average spot earnings for the year under review were lower as compared to the previous year. Average five year old tanker values rose by almost 7% as compared to the previous year. The crude tanker fleet grew by 5.7% during the year with the VLCC segment growing by 4% and the Suezmax segment grew by 3.7%. The order book for crude oil tankers stood at 43% of the total crude oil trading fleet. The average annual gross fleet growth in 2008-2010 is expected at about 10%. The increased tonnage would be partially offset against the phase out of old tankers in line with the IMO guidelines and the projected increase in worldwide refining capacity.
INR Cr
1000
863
800
INR Cr
671
760
195
200 150
465
600 400 200 0
496
496 109 78 278 62 200
469 258
141.15 326
100 50 0
208
Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
Years
Revenues Operating Profit PBT
Debt-Equity Ratio The Debt Equity Ratio of your Company stood at 0.68:1 as on March 31, 2008, as compared to 0.51:1 as on March 31, 2007. The increase in the ratio was on account of increased leverage due to acquisition of one capsize bulk carrier, M.V. Kiran on a Bareboat Cum Demise Charter basis. Your Company, has over the years, maintained a Debt Equity ratio within acceptable norms, which will enable it to raise debt for growth in future.
Debt:Equity Ratio 0.80 0.70 0.60
0.62 0.54 0.51 0.55 0.51 0.69 0.68
Percentage
0.50 0.40 0.30 0.20 0.10 0.00
2002 2003 2004 2005 2006 2007 2008 Years

Debt:Equity Ratio
Interest The interest outgo of your Company reduced to Rs. 89.19 crore during the year under review from Rs. 94.48 crore in the previous year. SEA TRANSPORTATION BUSINESS: Energy Transportation Group This group provides crude oil transportation and crude oil transportation management services to global and domestic crude oil refiners. It contributed Rs. 267.57 crore to the total income during the financial year as compared to Rs. 358.15 crore in the previous year. The drop in the earnings was on account of lower freight earnings as compared to the previous year and dry docking of the Suezmax tanker, M.T. Ishwari. During the year under review, your Company entered into a two-year time charter for one of its Very Large Crude Carrier (VLCC), M.T. Smiti, with British Petroleum Limited (BP). The time charter was awarded to the Company after a
The freight rates for a modern VLCC averaged at USD 57,200 per day during the year under review as compared to USD 63,100 during the previous year. RISK MANAGEMENT: Economic Risks: Shipping is a global industry and the performance of the shipping industry is closely linked to the world economic growth, global demand and supply trends and the commodity markets. Your Company has managed to mitigate this risk by having a global focus rather than region / country specific focus and has helped diversify risks. Freight Risks: Shipping industry is prune to high volatility in freight rates thereby making the cashflows highly unpredictable. An optimum mix of voyage charters, time charters and COAs has enabled your Company to take advantage of the freight rates and also maintain consistency of earnings.
11

Forex Risk: A majority of the revenues of your Company are in foreign currency which creates a natural hedge against foreign exchange exposures. Apart from this, the Essar Groups specialised forex team provides efficient advice to mitigate the exchange risk of your Company. Interest Rate Risk: Your Company has been undertaking suitable hedging strategies to overcome any adverse interest rate risks. It has formulated internal target rates at which any open interest rate risk can be hedged. At present 64% of the total loans are completely hedged with interest rates being fixed during the tenure of the facility. SALE AND ACQUISITION OF VESSELS: During the year under review your Company bought and sold the following vessels: Vessels Bought Capesize Dry Bulk Carrier, M.V. Govind Prasad (129,237 DWT). Newly Built Diving Support Vessel, Tug Perseverance. Capesize Dry Bulk Carrier, M.V. Kiran (175,048 DWT). Handysize Dry Bulk Carrier, M.V. Chennai Polivu (38,023 DWT). Handysize Dry Bulk Carrier, M.V. Chennai Valarchi (38,019 DWT). Mini Bulk Carrier, M.V. Nand Bhavani (2,200 DWT). Given the high economic growth globally and more so in India, the demand for skilled and competitive personnel is ever increasing. Your Company is taking suitable measures for talent retention and reducing attrition at all levels. INFORMATION TECHNOLOGY INITIATIVES: Your Company strongly believes that Information Technology is very vital for increasing efficiencies and better customer service. Towards this, your Company has implemented SAP in its financial management. Your Company is also in the process of implementing fleet management, logistics and maintenance management systems. SUBSIDIARIES: Your Company has the following Subsidiaries as on March 31, 2008: 1. 2. 3. 4. 5. 6. 7. 8. 9. Essar Ports & Terminals Limited, Mauritius (EPTL) Vadinar Oil Terminal Limited, India Essar Bulk Terminal Limited, India (subsidiary of EPTL) Essar Bulk Terminal (Salaya) Limited, India (wholly owned subsidiary of EPTL) Essar Logistics Limited, India Essar Sisco Ship Management Company Limited, India Essar International Limited, Guernsey, Channel Islands (EIL) Energy Transportation International Limited, Bermuda (wholly owned subsidiary of EIL) Energy II Limited, Bermuda (wholly owned subsidiary of EIL)
Vessels Sold
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: Your Company has instituted internal control systems which are adequate for the nature of its business and the size of its operations. In the beginning of the year, the scope of the internal audit exercise and the key business processes and selected risk areas to be audited are decided in consultation with the Audit Committee. All significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee comprises of three Directors with the Chairman being a person well qualified and conversant with matters pertaining to Accounts, Finance, Budgeting, Systems, etc. The Audit Committee met five times during the year. HUMAN RESOURCES: The operational efficiency of any company is dependent a lot upon the quality of personnel. Your Company believes in imparting the required training to its personnel at various levels. Your Company is managed by highly skilled professionals in all its operations, ashore and afloat, thereby achieving organisational efficiencies. Operations are managed professionally, ensuring high productivity levels which increases operational efficiency and utilisation, thereby increasing the revenues. Regular onboard and offshore training activities are undertaken by your Company to improve the performance of its employees. Skilled and efficient personnel also managed the ports and terminal business. Adequate systems have been put in place for mapping the competencies of personnel across the ranks. The competencies are then mapped against the desired competencies taking into consideration the business and quality objectives of your Company.
Essar Ports & Terminals Limited became a subsidiary of the Company on March 4, 2008. Essar Bulk Terminal Limited and Essar Bulk Terminal (Salaya) Limited became subsidiaries of the Company on March 29, 2008 and March 27, 2008 respectively. Your Company has obtained exemption from the Central Government under Section 212(8) of the Companies Act, 1956 from attaching the Balance Sheets, Profit & Loss Account, report of the Board of Directors and the report of the Auditors of the subsidiary companies with the Annual Report of the Company, as required under Section 212 of the Companies Act, 1956, vide Order no. 47/435/2007-CLIII dated January 16, 2008 and June 19, 2008. The Company will make available the annual accounts of the subsidiary companies to members seeking such information at any point of time. In accordance with Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in attaching the Consolidated Financial Statements, which forms part of the Annual Report. DIRECTORS: In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. N. Srinivasan, Mr. Sanjay Mehta and Mr. Ravi Ruia, retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.
12
Mr. K. V. Krishnamurthy and Mr. Dilip J. Thakker were appointed as Additional Directors on your Companys Board with effect from June 20, 2008. They cease to be Directors on the date of the Thirty-second Annual General Meeting. Notice has been received from members proposing their appointment as Directors on the Board. Mr. S. K. Poddar and Mr. Rewant Ruia have resigned from the Board of Directors of your Company with effect from June 20, 2008. Your Board places on record its appreciation for the valuable guidance provided by them during their tenure as Directors. AUDITORS: Your Companys Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the ensuing Annual General Meeting. It is proposed to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants as the Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting. 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. 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 shipping 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 loan receipts, : sale of ships, freight, charter hire earnings, interest income, etc.) (2) Used (including cost of acquisition of ships, loan repayments, interest, operating expenses, etc.) : Rs. 716.58 crore
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND: In terms of Section 205C of the Companies Act, 1956, an amount of Rs. 0.44 crore being unclaimed Debenture redemption amount and Interest thereon was transferred during the year to the Investor Education and Protection Fund established by the Central Government. 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; (d) the Directors have prepared the annual accounts on a going concern basis. APPRECIATION AND ACKNOWLEDGEMENTS: Your Directors would like to express their sincere appreciation to all the employees for their commendable teamwork and contribution to the growth of the Company. Your Directors also thank its bankers, charterers and other business associates for their continued support and cooperation during the year. For and on behalf of the Board
Rs. 563.85 crore
Jamnagar July 29, 2008
Sanjay Mehta Managing Director
R. N. Bansal Director
Your Company has obtained exemption from the Central Government under Section 211(4) of the Companies Act, 1956 from giving information required under clauses (a), (b), (c) and (e) of Paragraph 4-D of Part II of Schedule VI to the Companies Act, 1956 vide Order no. 46/203/2007-CL-III dated January 29, 2008. PARTICULARS OF EMPLOYEES: Information 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 given in Annexure to this report. Pursuant to the provisions of section 219 of the Companies Act, 1956 members are provided with abridged accounts. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the Registered Office. 32nd Annual Report 2007-2008
Persons constituting group coming within the definition of group as defined in the Monopolies and Restrictive Trade Practices Act, 1969 for the purpose of interse transfer of shares of the Company under regulation 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 Sr. No. 1. 2. 3. 4. 5. 6. Name of the Company Essar Investments Limited Teletech Investments India Limited Shubhangi Investments and Trading Limited Essar Global Limited India Shipping Essar Shipping & Logistics Limited
13

CORPORATE GOVERNANCE REPORT

1. Statement on Companys philosophy on Code of Corporate Governance Your Company believes that adhering to global standards of Corporate Governance is essential to enhance shareholders value and achieve long term corporate goals. The Companys philosophy on Corporate Governance stresses the importance of transparency, accountability and protection of shareholder interests. The Board conducts periodic review of business plans, monitors performance and compliance with regulatory requirements. 2. Board of Directors The Company has a Non-Executive Chairman and has one-third of the total number of Directors as Independent Directors. The number of Non-Executive Directors is more than 50% of the total number of Directors. A. Composition, category, attendance and number of other directorships of the Directors are furnished below: As at March 31, 2008 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 Attendance No. of outside Board at last Directorships Meetings AGM in other Indian attended public limited companies 4 3 7 5 7 7 2 7 7 N N N N Y N Y N Y Y 8 7 8 5 8 12 14 4 1 4 No. of *No. of Committee Directorships Positions held in in Indian other public limited private limited companies companies Chairman Member 1 1 3 2 4 3 4 3 4 3 5 -
Mr. Shashi Ruia (Chairman) Mr. Ravi Ruia (Vice Chairman) Mr. Anshuman Ruia
Promoter, Non-Executive Promoter, Non-Executive Promoter, Non-Executive **Mr. Rewant Ruia Promoter, Non-Executive Mr. R. N. Bansal Independent, Non-Executive **Mr. S. K. Poddar Independent, Non-Executive Mr. N. Srinivasan Independent, Non-Executive Mr. Sanjay Mehta Non-Promoter, (Managing Director) Executive Mr. A. R. Ramakrishnan Non-Promoter, (Wholetime Director) Executive Mr. V. Ashok Non-Promoter, (Wholetime Director) Executive
Note: The number of Independent Non-Executive Directors is determined as per Section 256 of the Companies Act, 1956. * includes membership of Audit and Share Transfer & Shareholders Grievance Committee only. **have resigned with effect from June 20, 2008. Mr. K. V. Krishnamurthy and Mr. Dilip J. Thakkar have been appointed as Independent Directors with effect from June 20, 2008. B. Details of Board Meetings held during the year: Sr. No. 1 2 3 4 5 6 7 3. Audit Committee The Audit Committee of the Company performs the following functions: a) overseeing the Companys financial process and disclosure of financial information to ensure that the financial statement is correct. Date May 29, 2007 June 29, 2007 July 30, 2007 October 11, 2007 October 31, 2007 January 22, 2008 January 31, 2008 Board Strength No. of Directors present 10 5 10 6 10 7 10 6 10 7 10 9 10 9 b) recommending the appointment and removal of statutory auditor, fixation of audit fees and approval for payment of any services. c) approving payment to statutory auditors for any other services rendered by the statutory auditors. d) reviewing with the management annual financial statements before submission to the Board. 32nd Annual Report 2007-2008
14
e)
reviewing with the management, the quarterly financial statements before submission to the Board for approval. reviewing with the management performance of statutory and internal auditors and adequacy of internal control systems. reviewing the adequacy of internal audit function. discussing with internal auditors any significant findings and follow up on such issues. reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. discussing with statutory auditors before the audit commences on the nature and scope of audit, as well as having post-audit discussion to ascertain any area of concern. reviewing the Companys financial and risk management policies; and examining reasons for substantial default in the payment to depositors, debenture holders, shareholders and creditors, if any.
4.
Remuneration to Directors Details of Remuneration paid to the Managing Director and Wholetime Directors during the year ended March 31, 2008 is as under:
(Rs.)
Name of Director Basic Salary Allowances and other benefits Perquisites Contribution to Provident & Superannuation Fund Total
f)
g) h) i)
Mr. Sanjay Mehta, Managing Director (w.e.f. 18.9.2005 for a period of 3 years) Mr.A.R.Ramakrishnan, Wholetime Director (w.e.f. 31.7.2006 for a period of 5 years) Mr. V. Ashok, Wholetime Director (w.e.f. 7.12.2006 for a period of 5 years)
12,00,000
50,60,868
6,50,000
1,44,000
70,54,868
16,20,000
86,17,416
1,20,000
1,94,400 1,05,51,816
24,75,000
50,15,716
2,97,000
77,87,716
j)
k) l)
No Employee Stock Option Schemes have been provided by the Company till date. Services of the aforesaid Executive Directors can be mutually terminated by giving three months notice or three months salary in lieu thereof. Details of sitting fees paid to Non-Executive Directors for the meetings held during the year ended March 31, 2008:
Non-Executive Directors Mr. Mr. Mr. Mr. Mr. Mr. Shashi Ruia Ravi Ruia R. N. Bansal N. Srinivasan Anshuman Ruia Rewant Ruia Sitting Fees paid for Board/Committee meetings Rs. 19,500 Rs. 15,500 Rs. 61,000 Rs. 61,000 Rs. 57,500 Rs. 28,500
Composition: The Committee comprises of three Directors of which two are Independent Directors. All the members of the Committee are financially literate and have relevant financial management and/or audit exposure. The Managing Director, Wholetime Directors, General Manager - 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 3 3 3 3 3 No. of Members present 3 3 3 3 3
Number of shares or convertible instruments held by non executive directors: Non-Executive Directors Mr. Shashi Ruia Mr. Ravi Ruia Mr. Anshuman Ruia Mr. Rewant Ruia Mr. R. N. Bansal Mr. N. Srinivasan Mr. S. K. Poddar 5. No. of shares held Nil Nil Nil Nil Nil Nil 254 shares
1 2 3 4 5
May 29, 2007 June 29, 2007 July 30, 2007 October 31, 2007 January 31, 2008
Attendance at Audit Committee Meetings: Director No. of meetings held No. of meetings attended 5 5 5
Mr. R. N. Bansal (Chairman) Mr. Anshuman Ruia Mr. N. Srinivasan
5 5 5
Share Transfer & Shareholders Grievance Committee: Terms of reference: To approve transfer, transmission, sub-division and issue of duplicate shares/debentures and for redressal of investor complaints on all matters. Composition: The Committee members comprise of Mr. Ravi Ruia, Vice Chairman, Mr. Sanjay Mehta, Managing Director, Mr. A. R. Ramakrishnan, Wholetime Director and Mr. V. Ashok, Wholetime Director. The Executive Directors and Company Secretary, are authorised to approve the Share Transfer and other related transactions on a day to day basis under the supervision of the Committee. Details of shareholders complaints received, solved and pending share transfers: There were no complaints pending at the beginning of the year. A total of 393 complaints were received during 15

the year ended March 31, 2008, most of which being non-receipt of dividend/debenture warrants, 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, 2008. 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, 2008. General Body Meeting: (a) Details of General Meetings held in last three years:
Financial Meeting Date year 2004-05 2005-06 AGM AGM EGM AGM 2006-07 EGM 23-02-08 11.00 AM 29-09-05 22-09-06 02-01-07 25-09-07 Time Location
6.
10. General Shareholders information: A. Annual General Meeting details: Date September 27, 2008 Venue Administrative Building, Essar Refinery Complex, Okha Highway (SH - 25), Taluka Khambhalia, Distt. Jamnagar, Gujarat 361305 Time 3.30 p.m. Book Closure 22-09-2008 to 27-09-2008 Dates (both days inclusive) B. Financial Calendar:
Financial year of Company April 1, 2008 to March 31, 2009 On or before July 31, 2008 On or before October 31, 2008 On or before January 31, 2009 On or before June 30, 2009 First Quarter results Second Quarter results Third Quarter results Annual results for the year
10.15 AM 10.15 AM 11.00 AM 11.00 AM
Dayanandasagar Memorial Hall, Chandrasagar Complex, No.264/266, T. Mariappa Road, 2nd Block, Jayanagar, Bangalore 560011 Srinivasa Sagar Kalyana Mahal, Chandrasagar Complex, No.264/266, T. Mariappa Road, 2nd Block, Jayanagar, Bangalore 560011
7.
9.
(b) Whether any special resolutions passed in the previous three Annual General Meetings? No special resolutions were passed in the previous three Annual General Meetings. (c) Whether any special resolution was passed last year through postal ballot? No special resolution was passed during the financial year 2007 08 through postal ballot. (d) Whether any special resolution is proposed to be conducted through postal ballot? No Disclosures: 1 There are no materially significant related party transactions made by the Company with its Promoters, Directors or Management, their relatives, its subsidiaries, etc. that may have potential conflict with the interest of the Company at large. 2 Transactions with related parties during the year are disclosed in Note No. B-12 of Schedule 13 to the accounts in the Annual Report. 3 During the last three years no penalty or stricture has been imposed on the Company by Stock Exchanges/SEBI/Statutory Authorities on matters related to Capital Markets. Means of Communication: Financial results and The quarterly and annual other information about financial results are the Company displayed on the Companys website: www.essar.com Publication of financial Published in major results newspapers such as Business Standard, Udayavani, etc. Presentation to Press releases and Institutional Investors presentations made to and to the Analysts Institutional Investors and Analysts are displayed on the Companys website : www.essar.com Management Discussion Forms part of the Annual & Analysis Report, which is mailed to the shareholders of the Company
C. Registrars and Share Transfer Agents: Data Software Research Company Private Limited Sree Sovereign Complex, 22, 4th Cross Street Trustpuram, Kodambakkam, Chennai 600 024 Tel: (044) 2483 3738, Fax: (044) 2483 4636 e-mail: dsrcmd@vsnl.com. D. Share Transfer System: To expedite the process of share transfers, transmissions, 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. Presently the Company dematerialises the shares after getting the dematerialisation requests being generated by the Depository Participant. E. Listing on Stock Exchanges: The Companys securities are listed on the following Stock Exchanges:
Bombay Stock Exchange Ltd. * National Stock Exchange Phiroze Jeejeebhoy Towers, of India Ltd. Dalal Street, Mumbai 400 023 Exchange Plaza, Bandra Kurla Complex Bandra East, Mumbai 500051 Code : 500630 Code : ESSARSHIP * w.e.f. March 11, 2008
Annual Listing fee for the year 2008-09 has been paid to both the exchanges. F. Market price data (High/Low) during each month in the year 2007-2008 on the Bombay Stock Exchange Limited:
Month April May June July August September October November December January February March Highest 35.75 38.85 29.15 28.00 26.90 29.25 28.90 26.25 40.80 50.85 51.90 54.80 Lowest 29.15 25.00 18.80 20.60 22.40 24.65 23.50 22.50 24.00 35.05 43.20 34.50
Scrip Code : 500630 32nd Annual Report 2007-2008
16
G. Share Price performance in comparison to BSE Sensex

Share Price Movement versus BSE Sensex 275 250 225 200
Share Price
L.
Status of Dematerialisation of shares as on March 31, 2008:

Mode Physical Demat No. of shares 1,17,40,149 41,43,37,058 42,60,77,207 No. of Folios 70,798 48,543 1,19,341 Percentage 2.75 97.25 100.00
22000 21000 20000 19000 18000 17000 16000 15000

Apr- May- Jun07 07 07 Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar07 07 07 07 07 07 08 08 08
175 150 125 100 75 50 25 0
BSE Sensex
TOTAL
14000
Months Share price on BSE BSE Sensex
H. Shareholding Pattern as on March 31, 2008:

Shareholding by Essar and Associates Financial Institutions/ Mutual Funds/Banks/ Insurance Companies Other Corporate Bodies Non-Domestic Companies/ Foreign Banks Foreign Institutional Investors Non-Resident Individuals Public GDRs/ADRs/ADSs (Promoters) Total No. of shares 20,13,19,284 14,09,360 1,47,09,096 24,259 4,81,41,363 9,54,717 3,50,63,128 12,44,56,000 42,60,77,207 % 47.25 0.33 3.45 0.00 11.30 0.22 8.24 29.21 100.00
Distribution of Shareholding as on March 31, 2008:

No. of equity shares held Upto 1000 1001 to 2000 2001 to 3000 3001 to 4000 4001 to 5000 5001 to 10000 10001 and above TOTAL Number % of of share- shareholders holders 1,15,573 2,145 583 245 194 300 301 1,19,341 96.84 1.80 0.49 0.21 0.16 0.25 0.25 Total % of number of holding shares 1,84,65,847 31,36,540 14,87,874 8,84,471 9,20,319 22,79,446 398,902,710 4.33 0.74 0.35 0.21 0.22 0.53 93.62 100.00
100.00 42,60,77,207
I. Compliance Officer : Mr. Manoj Contractor Company Secretary J. Registered Office : Administrative Building Essar Refinery Complex Okha Highway (SH - 25) Taluka Khambhalia Distt. Jamnagar Gujarat 361305 K. Corporate Office : Essar House 11, Keshavrao Khadye Marg Mahalaxmi, Mumbai 400 034 Tel : (022) 6660 1100 Fax: (022) 2354 4312 e-mail: espll.secretarial@essar.com 32nd Annual Report 2007-2008
11. 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. 12. Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity: 3,76,000 GDRs representing 12,44,56,000 equity shares are outstanding as on March 31, 2008. 13. 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. 14. Non-mandatory requirements: 1. The Board : (a) The expenses incurred by Non-Executive Chairman are reimbursed by the Company. (b) At present there is no policy fixing the tenure of Independent Directors. 2. Remuneration Committee: The Committee comprises of three Non-Executive Directors and the Company Secretary is 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. 3. Shareholders right: Half yearly financial results including summary of the significant events in last six months are available on the website of the Company i.e. www.essar.com. No separate financials are sent to shareholders of the Company. 4. Audit qualifications: There are no audit qualifications in the Auditors report on the financial statements to the Shareholders of the Company. 5. Training of Board members: A Presentation about the Company and the industry in which it operates is made to new Directors. 6. Mechanism for evaluating performance of Non-Executive Board Members: There is no formal mechanism for performance evaluation of Non-Executive directors. 7. Whistle Blower policy: The Company has not established any formal whistle blower policy. 17

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

To the Members Essar Shipping Ports & Logistics Limited (formerly Essar Shipping Limited) We have examined the compliance of conditions of corporate governance by Essar Shipping Ports & Logistics Limited (formerly Essar Shipping Limited) (the Company) for the year ended March 31, 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned 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.
For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner (Membership No. 31544) Place : Mumbai Date : July 29, 2008
Declaration on Compliance of the Companys Code of Conduct

To the members of Essar Shipping Ports & Logistics Limited The Company has framed a specific code of conduct for the members of the Board and the Senior Management Personnel of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges to further strengthen corporate governance practices in the Company. All the members of the Board and Senior Management Personnel of the Company have affirmed due observance of the said code of conduct in so far as it is applicable to them and there is no non compliance thereof during the year ended March 31, 2008.
Sanjay Mehta Managing Director Place : Jamnagar Date : July 29, 2008
18
AUDITORS REPORT ON ABRIDGED FINANCIAL STATEMENTS TO THE MEMBERS OF ESSAR SHIPPING PORTS & LOGISTICS LIMITED
(formerly known as Essar Shipping Limited) We have examined the abridged Balance Sheet of Essar Shipping Ports & Logistics Limited (formerly known as Essar Shipping Limited) (the Company), as at March 31, 2008 and also the abridged Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto, together with significant notes thereon. These abridged financial statements have been prepared by the Company pursuant to Rule 7A of the Companies (Central Governments) General Rules and Forms, 1956 and are based on the audited financial statements of the Company for the year ended March 31, 2008 prepared by the management in accordance with the provisions of subsection 3(C) of Section 211 of the Companies Act, 1956 and covered by our report of even date to the members of the Company, which is attached hereto. For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner (Membership No. 31544)
Place: Mumbai Date : June 20, 2008
AUDITORS REPORT TO THE MEMBERS OF ESSAR SHIPPING PORTS & LOGISTICS LIMITED
(formerly known as Essar Shipping Limited) 1. We have audited the attached Balance Sheet of Essar Shipping Ports & Logistics Limited (formerly known as Essar Shipping Limited) (the Company), as at March 31, 2008, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003, (the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 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. On the basis of written representations received from directors, as on March 31, 2008 and taken on record by the board of directors, we report that none of the directors is disqualified as on March 31, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. 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 Place: Mumbai Date : June 20, 2008 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 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 comply with the accounting standards referred to in sub-section (3C) of Section 211 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 financial statements, read together with the notes thereon, 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 March 31, 2008; (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. For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner (Membership No. 31544)
2.
3.
4.
5.
19

ANNEXURE TO THE AUDITORS REPORT

(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 Companys business/activities during the year are such that clauses (vi), (viii), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of para 4 of the Order are not applicable to the Company. 1. In respect of its fixed assets: a. The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. The fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets over a period of three years, having regards to the size of the Company and nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year. 5. 4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of services. We have not observed any continuing failure to correct major weaknesses in such internal controls. The nature of the Companys business does not involve sale of goods. In our opinion and according to the information and explanations give to us, there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act 1956. In our opinion, the internal audit system is commensurate with the size of the Company and the nature of its business. 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, investor education and protection fund, employees state insurance , income-tax, sales-tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues as applicable with the appropriate authorities during the year. As informed to us employees state insurance scheme is not applicable to the Company. No undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The details of disputed income-tax and sales tax dues which have not been deposited as at March 31, 2008 on account of disputes pending, are given below:
Name of the statute Nature of the disputed dues Amount (Rs. in crore) Period to which the amount relates Assessment Year from 1988-1989 to 2001-2002 Assessment Year 1997-98 Forum where dispute is pending
b.
6.
7.
c. 2.
In respect of its inventories: a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals. 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 generally reasonable and adequate in relation to the size of the Company and the nature of its business. According to the information and explanations given to us, the Companys inventories comprise fuel oil and lube oil on board the ships. Having regard to the nature of the Companys business and scale of operations, quantities are determined by physical count and it is not considered feasible to maintain records of movements of inventories of such items by the vessel in which they are carried. As quantities are determined by physical count and records of movements are not maintained on board the ships, the question of discrepancies on physical verification thereof does not arise.
b.
b.
c.
c.
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.
Income tax Act, 1961
Income Tax
110.76 (advance tax payment Rs. 47.27) 58.10
Appellate Authority Tribunal Level Madras High Court.
Tamil Nadu Sales Tax Act, 1959
Sales Tax and penalty thereon
20
According to the information and explanation given to us, there are no dues of wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. 8. The Company does not have accumulated losses as at March 31, 2008. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. In our opinion, on the basis of audit procedures 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 debentures.
opinion, 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. 12. 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. 13. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
9.
10. 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 the loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interests of the Company. 11. To the best of our knowledge and belief and according to the information and explanations given to us, in our Place: Mumbai Date : June 20, 2008
For Deloitte Haskins & Sells Chartered Accountants
Khurshed Pastakia Partner (Membership No. 31544)
21

ABRIDGED BALANCE SHEET AS AT 31ST MARCH, 2008

(Statement containing the salient features of Balance Sheet as per Section 219 (1) (b) (iv) of the Companies Act, 1956.) As at 31.03.2008 (Rs. in crore) I. SOURCES OF FUNDS Shareholders funds: a) Capital i) Equity b) Reserves and surplus i) Capital reserve ii) Revenue reserve iii) Revaluation reserve iv) Tonnage tax reserve v) Surplus in Statement of Profit and Loss Loan funds: a) Secured loans b) Finance lease obligations c) Unsecured loans Total II. APPLICATION OF FUNDS Fixed assets: a) Net block (Original cost Rs. 2680.86 (previous year Rs.1919.10) crore less depreciation Rs. 557.15 (previous year Rs. 672.84) crore) (Refer Note no.B.1) b) Capital work in progress (including capital advances) Investments a) Investments in subsidiary companies Unquoted b) Others i) Quoted* ii) Unquoted * (Aggregate market value of quoted investments is Rs. 78.32 (previous year Rs. 19.86) crore) Current assets, loans and advances: a) Inventories b) Sundry debtors c) Cash and bank balances d) Other current assets e) Loans and advances to: i) subsidiary companies ii) others Less: Current liabilities and provisions: a) Liabilities b) Provisions Net current (liabilities)/ assets As at 31.03.2007 (Rs. in crore)
426.21 307.09 835.89 538.01 162.50 801.60 559.36 778.09 373.00 307.09 836.18 112.27 132.50 589.93 606.44 393.34 160.00
426.21
2,645.09
1,977.97
1,710.45 4,781.75
1,159.78 3,563.96
2,123.71
1,246.26
2,123.71
6.19
1,252.45
3,107.35 2.27 15.00 3,124.62
1,545.15 2.27 399.96 1,947.38
21.03 105.94 134.84 1.07 0.05 252.35 515.28 975.36 6.50 981.86 (466.58)
25.67 233.20 64.05 0.70 3.29 97.10 424.01 52.50 7.38 59.88 364.13 3,563.96
Total 4,781.75 Refer accounting policies and notes to abridged financial statements Compiled from the audited annual accounts of the Company referred to in our report dated 20th June, 2008. As per our report of even date For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner For and on behalf of the Board
Sanjay Mehta Managing Director V. Ashok Wholetime Director
N. Srinivasan Director Manoj Contractor Company Secretary
Place: Mumbai Date : June 20, 2008 22
Place: Mumbai Date : June 20, 2008 32nd Annual Report 2007-2008
ABRIDGED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2008
(Statement containing the salient features of Statement of Profit and Loss as per Section 219 (1) (b) (iv) of the Companies Act, 1956.) For the year ended 31.03.2008 (Rs. in crore) INCOME a) Fleet operating and chartering earnings b) Dividend on non trade current Investments c) Interest income d) Other income i) Profit on sale of fleet ii) Exchange gain iii) Miscellneous income Total EXPENDITURE a) Fleet operating expenses i) Direct voyage expenses ii) Employee expenses (off shore staff) iii) Other fleet operating expenses b) Establishment and other expenses i) Employee expenses (office staff) ii) Managerial remuneration iii) Auditors remuneration iv) Bad debts / provision for doubtful debts v) Other expenses c) d) Interest and finance expenses Depreciation Total PROFIT BEFORE TAX Less: Provision for taxation - Current tax including tonnage tax - Fringe benefit tax - Tax adjustment for earlier years PROFIT AFTER TAX Balance brought forward from previous year AMOUNT AVAILABLE FOR APPROPRIATION APPROPRIATIONS: Transferred to tonnage tax reserve Balance carried forward to balance sheet 776.24 1.33 5.21 197.10 75.65 8.40 12.47 0.51 1.36 For the year ended 31.03.2007 (Rs. in crore) 1,024.30 1.08 5.41
281.15 1,063.93
14.34 1,045.13
423.35 43.47 54.14 16.99 2.54 0.66 57.58
520.96
505.70 52.97 55.75 15.91 1.51 0.70 23.67 62.80
614.42
77.77 89.19 106.64 794.56 269.37 (23.60) (3.45) (0.65) 241.67 589.93 831.60 30.00 801.60 831.60
104.59 94.48 90.50 903.99 141.14 (4.81) (2.29) (0.06) 133.98 490.45 624.43 34.50 589.93 624.43 3.14
Earnings per share - basic and diluted (Rs.) (face value of Rs. 10/- per share) 5.67 Refer accounting policies and notes to abridged financial statements Compiled from the audited annual accounts of the Company referred to in our report dated 20th June, 2008. As per our report of even date For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner For and on behalf of the Board
Place: Mumbai Date : June 20, 2008 32nd Annual Report 2007-2008
Place: Mumbai Date : June 20, 2008 23

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008
Year ended 31.3.2008 (Rs. in crore) A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxes Adjustments for : Depreciation Interest and finance expenses Interest Income Profit on sale of assets Balances written off Profit on sale of investments Provision for bad / doubtful debts Dividend on current investments Foreign exchange loss / (gain) Operating profit before working capital changes Adjustments for: Trade and other receivables Inventories Trade payables Cash generated from operations Income taxes paid (net of refund) Fringe benefit tax paid Net cash flow from operating activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets including capital work in progress / advance Sale of fixed assets Insurance claim received on fixed asset Advance received against sale of fixed asset Advance received against sale of investments Advance received against sale of investment repaid Proceeds from sale of current investments Investment in shares of subsidiaries Other investments purchased Fixed deposits placed for a period of more than three months Refund to / advance from subsidiary Dividend on current investment Interest received Net cash flow from investing activities (560.54) 205.36 22.06 911.92 (13.13) 585.37 (1,562.19) (344.56) 23.92 3.25 1.33 4.84 (722.37) (120.55) 15.80 2.10 13.13 426.98 (0.15) (796.98) (45.63) (1.58) 1.08 4.87 (500.93) 115.25 4.64 4.11 301.93 (18.19) (5.29) 278.45 (156.58) (3.39) (10.21) 161.24 (12.18) (2.41) 146.65 106.64 89.19 (5.21) (196.99) (7.85) (1.33) (75.89) 177.93 90.50 94.48 (5.41) (12.42) 0.01 (0.25) 23.69 (1.08) 0.76 331.42 269.37 141.14 Year ended 31.3.2007 (Rs. in crore)
24
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008
Year ended 31.3.2008 (Rs. in crore) C. CASH FLOW FROM FINANCING ACTIVITIES Interest and finance expenses paid Proceeds from term loans Additional lease obligations Proceeds from unsecured loans Repayment of term loans Repayment of finance lease obligation Repayment of unsecured loans Payment of unclaimed debentures and interest thereon Refund of Inter corporate deposit given Net Cash flow from financing activities INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year Non cash investing and financing transactions Conversion of share application money into shares Investment in shares against advance Notes : 1 Cash and cash equivalents include : Cash and bank balances Balances in fixed deposits (maturity period of less than 3 months) Unrealised (gain)/ loss on foreign currency on cash and cash equivalents Total cash and cash equivalents Balances in fixed deposits (maturity period of more than 3 months) CASH AND BANK BALANCES 2 (88.53) 162.59 445.28 513.00 (169.42) (23.84) (300.00) (0.45) 538.63 94.72 15.04 109.76 (93.61) 18.40 86.36 320.00 (82.68) (23.40) (320.00) (0.63) 20.00 (75.56) (429.84) 444.88 15.04 72.95 4.84 Year ended 31.3.2007 (Rs. in crore)
49.61 58.17 1.98 109.76 25.08 134.84
9.40 4.78 0.86 15.04 49.01 64.05
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. For and on behalf of the Board
As per our report of even date For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner
25

NOTES TO ABRIDGED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2008 1) Fixed assets a) In order to reflect the fair value of the Companys fleet, the Company revalued its fleet on 1st April 2004 and on 31st March 2008. The valuations were done by accredited valuers on the basis of expected market value in an arms length transaction and free of encumbrances on the valuation date. The enhancement in the value of fleet amounting to Rs.669.52 crore and Rs.452.69 crore respectively were credited to fixed asset revaluation reserve. Gross block as on 31 st March, 2008 includes Rs. 651.60 crore being amount added on revaluation of fleet. Incremental depreciation on account of the revaluation amounting to Rs.26.95 (previous year Rs.34.90) crore has been recouped from the fixed assets revaluation reserve. b) Secured Loans amounting to Rs. 1,336.45 (previous year Rs. 998.78) crore is secured by first charge on fleet. c) The Company has taken two vessels and an aircraft on finance lease. d) Gross block of plant and machinery includes Rs. 38.84 (previous year Rs. 38.84) crore leased out; W.D.V. as on March 31, 2008 is Nil (previous year Nil). 2) Investments The Company has pledged its investments in equity shares of Essar Oil Limited amounting to Rs. 2.27 (previous year Rs. 2.27) crore in favour of lendors for loans availed by Essar Oil Limited and in equity shares of Vodafone Essar Mobile Services Limited amounting to Rs.1 (previous year Rs.1) crore against loan availed for acquisition of shares. 3) (Note no. B (2) of schedule 13 of annual accounts) a) Contingent liabilities:
(Rs. in crore) As on As on 31.03.2008 31.03.2007
b)
Estimated amount of contract remaining to be executed on capital account and not provided for is Rs. Nil (previous year Rs. 24.75) crore.
4)
Sundry debtors (Note no. B (3) of schedule 13 of annual accounts) Sundry debtors (unsecured and considered good) outstanding for more than six months include Rs.3.70 (previous year Rs.3.70) crore awarded on arbitration in the year 2002-03. The concerned debtor went into appeal and the matter is pending before the Honorable High Court of Madras. As the arbitration tribunal award is in favour of the Company, the debt is considered good.
5)
The details of provision made by the Company for present obligations arising out of past events are as below: (Note no. B (4) of schedule 13 of annual accounts)
(Rs. in crore)
Particulars
As on 01.04.2007
Additions Reversed/ during paid during the year the year
As on 31.03.2008
Claims against the Company pending arbitration proceedings
0.82
0.82
6)
Leases (Note no. B (5) of schedule 13 of annual accounts) a) Finance leases The minimum lease rentals outstanding at year end are as under: (Rs. in crore)
As on 31.03.2008 As on 31.03.2007
Particulars
Particulars i)
Claims against the Company pending arbitration proceedings 0.39 ii) Guarantees given by banks* 15.38 14.80 iii) Letter of credit (capital commitment) 24.56 iv) Corporate guarantees on behalf of a subsidiary Vadinar Oil Terminal Limited 250.00 250.00 v) Corporate guarantees on behalf of Essar Shipping & Logistics Limited ** 1346.44 730.45 vi) Disputed sales tax demand under appeal in the Honorable High Court of Madras 58.10 58.10 vii) Income tax appeals before ITAT 110.76 109.20 * includes guarantee of Rs. 13.74 crore issued by bank in favour of ETIL which is backed by counter guarantee of the Company. ** Corporate guarantee on behalf of Essar Shipping & Logistics Limited has been backed by a counter guarantee from Essar Global Limited.
Minimum Interest Present Minimum Interest Present lease value of lease value of payments minimum payments minimum lease lease payments payments
Future lease rental obligation payable: - Not later than one year - Later than one year but not later than five years - Later than five years TOTAL 85.04 48.57 36.47 54.55 28.83 25.72
787.74 202.73 182.65 26.04
585.01 156.61 778.09
254.68 113.00 270.14 44.20
141.68 225.94 393.34
1055.43 277.34
579.37 186.03
b)
Operating leases Outstanding commitments by the lessee on account of assets leased out by the Company under noncancelable leases: Rs. Nil (previous year Rs. 20.32) crore.
26
7)
Earnings per share (Note no. B (7) of schedule 13 of annual accounts) The calculation of the basic and diluted earnings per share is based on the following data: Year ended
9)
(Note no. B (10) of schedule 13 of annual accounts) The outstanding foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: a) Amount receivable in foreign currency of the following: Rs. in crore 2007-08 2006-07 Currency In million 2007-08 2006-07
Basic and diluted Earnings for the purpose of basic earnings per share (net profit for the year) (Rs. in crore) Equity shares at the beginning/ end of the year (Nos.) Weighted average number of equity shares for the purpose of calculating basic and diluted earnings per share (Nos.) Earnings per share - basic and diluted (face value of Rs.10/- each) (Rs.) 8)
31.03.2008
31.03.2007
Particulars
i) 241.67 133.98
Export of goods and services
38.90 2.29
23.98 1.24
USD USD
9.84 0.58
5.55 0.29
426,077,207 426,077,207
ii) Advance to vendors iii) Bank balances and fixed deposits including interest accrued there on b)
426,077,207 426,077,207
5.67
3.14
93.41
14.76
USD
23.71
3.41
Business segment and geographical segment (Note no. B (6) of schedule 13 of annual accounts) a) Business segment The Company has one primary business segment of fleet operations and chartering. b) Geographical segment The Companys fleet operations are managed on a worldwide basis from India. Fleet operating and chartering earnings based on the geographical location of customers: (Rs. in crore) Year ended i)
Amount payable in foreign currency of the following: Rs. in crore 2007-08 2006-07 Currency In million 2007-08 2006-07
Particulars
Import of goods and services
13.38 0.11 0.03 0.62 0.21 0.30 -
13.39 0.08 0.01 0.04 0.03 0.13 0.23 0.15 14.06
USD GBP DKK DHS EUR JY SGD HKD AED
3.34 0.01 0.03 0.10 5.23 0.10 0.01 8.82
0.30 0.34 0.01 0.02 0.67
Fleet Operating & Chartering Earnings India China U.S.A U.K. U.A.E Rest of the world TOTAL
31.03.2008 31.03.2007 451.64 90.08 57.10 77.38 77.26 22.78 776.24 696.50 20.63 60.52 139.70 2.65 104.30 1024.30 ii) Secured loans payable (including interest accrued) iii) Lease loans obligation
0.02 14.66
558.36
495.56
USD
139.21
113.19
778.09
394.34
USD
193.99
89.86
The main operating assets represent floating fleet, which is not identifiable to any geographical location. 32nd Annual Report 2007-2008
Note: Since the majority of the revenue of the Company is in foreign currency therefore it has a natural hedge against foreign exchange exposures. 27

10) Auditors remuneration (Note no. B (8) of schedule 13 of annual accounts) (Rs. in crore) Particulars Audit fees Other matters Out of pocket expenses* Service tax on above TOTAL *Amount is less than Rs. 1 lakh 11) Employee benefits: The Company has adopted Accounting Standard (AS) 15 (Revised) Employee Benefits with effect from 1st April, 2007. In accordance with the above standard, the additional obligation of the Company on account of employee benefits, based on independent actuarial valuation, amounting to Rs. 0.29 crore has been accounted for by debiting the opening balance of general reserve as on 1st April, 2007 as per transitional provision of AS-15. 12) Related party transactions: (note no. B (12) of schedule 13 of annual accounts) a) Subsidiaries i) ii) Vadinar Oil Terminal Limited Essar Sisco Ship Management Company Limited d) Year ended 31.03.2008 31.03.2007 0.25 0.34 0.00 0.07 0.66 0.25 0.37 0.00 0.08 0.70 c) b) Investing company in respect of which the Company is an associate i) ii) Teletech Investments (India) Limited India Shipping, Mauritius
Individuals owning directly or indirectly an interest in the voting power that gives them control or significant influence i) ii) Mr. Shashi Ruia, Chairman Mr. Ravi Ruia, Vice Chairman
iii) Mr. Anshuman Ruia, Director iv) Mr. Rewant Ruia, Director Key management personnel i) ii) Mr. Sanjay Mehta, Managing Director Mr. A. R. Ramakrishnan, Wholetime Director
iii) Mr. V. Ashok, Wholetime Director e) Other related parties where there have been transactions: Enterprises commonly controlled or influenced by major shareholders / directors / relatives of directors of the Company: (i) Essar Information Technology Limited
(ii) Essar Shipping & Logistics Limited, Cyprus (iii) Essar Agrotech Limited (iv) Essar House Limited (v) Essar House Services Limited (vi) Essar Steel Limited (vii) Futura Travels Limited (viii) India Securities Limited (ix) Essar Oil Limited (x) Essar Steel Hazira Limited (xi) Essar Oilfields Services Limited, Mauritius (xii) Aegis BPO Services Limited
iii) Essar Logistics Limited iv) Essar International Limited, Guernsey, Channel Islands v) Energy Transportation International Limited, Bermuda
vi) Energy II Limited, Bermuda vii) Essar Ports & Terminals Limited, Mauritius (w.e.f. 4th March 2008) viii) Essar Bulk Terminal Limited (w.e.f. 29 March 2008) ix) Essar Bulk Terminal (Salaya) Limited (w.e.f. 27th March 2008)
th
28
The details of transactions with related parties during the year are as under: (Rs. in crore) Nature of Transactions Subsidiaries Other Related Parties Key Management Personnel Total
2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 Fleet operating income Essar Steel Limited Essar Steel Hazira Limited Essar Logistics Limited Vadinar Oil Terminal Limited Others Total Equipment lease rental / hire income Essar Logistics Limited Essar Steel Limited Total Agency and management fees Essar Shipping & Logistics Limited Remuneration Sanjay Mehta A. R. Ramakrishnan V. Ashok Total Fuel oil Essar Logistics Limited Essar Oil Limited Total Direct voyage expenses Essar Logistics Limited Spares & stores purchased Essar Logistics Limited Business center fees Essar House Services Limited Rent Essar House Limited Essar House Services Limited Total Repair & maintenance Essar Agrotech Limited Essar Constructions (India) Limited Total Traveling expenses Futura Travels Limited Reimbursement of expenses Futura Travels Limited Others Total 11.37 9.16 20.53 0.01 0.01 0.11 26.97 0.97 27.94 0.78 0.78 4.52 400.48 1.89 2.36 404.73 0.19 0.19 0.35 0.87 0.87 13.56 4.20 0.24 4.44 0.30 0.30 4.23 19.53 1.14 20.67 433.91 72.17 3.52 509.60 0.19 0.19 3.22 3.22 20.19 4.80 4.80 0.30 0.23 0.53 4.21 16.11 0.78 16.89 0.71 1.05 0.78 2.54 0.74 0.60 0.17 1.51 400.48 1.89 11.37 9.16 2.36 425.26 0.19 0.19 0.35 0.71 1.05 0.78 2.54 0.01 0.87 0.88 0.11 13.56 4.20 0.24 4.44 0.30 0.30 4.23 19.53 1.14 20.67 433.91 72.17 26.97 0.97 3.52 537.54 0.78 0.19 0.97 0.74 0.60 0.78 1.51 3.22 3.22 4.52 20.19 4.80 4.80 0.30 0.23 0.53 4.21 16.11 0.78 16.89
29

(Rs. in crore) Nature of Transactions Subsidiaries Other Related Parties Key Management Personnel Total
2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 Professional /advisory / agency fees Essar Information Technology Limited Essar Steel Limited India Securities Limited Aegis BPO Services Limited Essar Logistics Limited Total Interest on loan Essar Sisco Ship Management Co. Limited Essar Shipping & Logistics Limited Total Fixed assets sold Essar Logistics Limited Essar Shipping & Logistics (Panama) Inc. Total Fixed assets (including capital advances) Essar Constructions (India) Limited Fixed assets under finance lease Essar Shipping & Logistics Limited Investments in shares Essar Ports & Terminals Limited Vadinar Oil Terminal Limited Essar Logistics Limited Total Loans & advances including deposit given Essar Sisco Ship Management Co. Limited Essar Logistics Limited Essar International Limited Energy Transportation International Limited Essar Ports & Terminals Limited Essar House Limited Essar House Services Limited Essar Oil Limited Essar Information Technology Limited Essar Oilfields Services Limited Essar Bulk Terminal Limited Essar Investments Limited Total Loans and advances received Essar Sisco Ship Management Company Limited Advance received against sale of investments Essar Shipping & Logistics Limited Essar Ports & Terminals Limited Total Guarantee on behalf of others Essar Shipping & Logistics Limited 0.10 0.10 1.49 1.49 2.42 2.42 0.37 0.05 0.22 0.22 0.86 0.28 0.28 5.38 5.38 0.38 0.11 0.22 0.45 1.16 0.37 0.05 0.22 0.22 0.10 0.96 1.49 0.28 1.77 5.38 5.38 0.38 0.11 0.22 0.45 1.16 2.42 2.42
1,562.19 1,562.19
4.94 72.95 77.89
445.28 -
1.14 -
445.28
1.14 4.94 72.95 77.89
- 1,562.19 - 1,562.19
0.04 0.02 0.06
0.14 10.48 18.72 24.92 0.17 54.43
2.45 1.41 0.71 0.42 4.99
3.50 12.00 0.15 0.58 16.23
0.04 2.45 1.41 0.71 0.42 0.02 5.05
0.14 10.48 18.72 24.92 3.50 12.00 0.15 0.17 0.58 70.66
213.00
213.00
911.92 911.92 615.99
730.45
9.90 9.90 615.99
13.13 13.13 730.45
9.90 911.92 921.82 615.99
13.13 13.13 730.45
30
Outstanding balance as on 31/03/2008 Balances Subsidiaries Other Related Parties Key Management Personnel Total
2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 Sundry debtors Essar Steel Limited Essar Logistics Limited Essar Steel Hazira Limited Essar Shipping & Logistics (Panama) Inc. Vadinar Oil Terminal Limited Total Loans and advances including deposit given Essar Logistics Limited Essar House Limited Futura Travels Limited Essar Oil Limited Others Total Unsecured loan Essar Sisco Ship Management Company Limited Lease loan obligation Essar Shipping & Logistics Limited Advance received against sale of investments Essar Shipping & Logistics Limited Essar Ports & Terminals Limited Total Sundry creditors Essar Oil Limited Futura Travels Limited Essar Shipping & Logistics Limited Essar Constructions (India) Limited Essar House Services Limited Aegis BPO Services Limited Sanjay Mehta A. R. Ramakrishnan V. Ashok Others Total Security deposit received Essar Steel Limited Interest accrued but not due on loans Essar Sisco Ship Management Co. Limited Essar Shipping & Logistics Limited Total Guarantee given on behalf of others Essar Shipping & Logistics Limited Energy Transportation International Limited Vadinar Oil Terminal Limited Total 21.46 4.38 25.84 28.01 1.21 29.22 36.94 5.34 42.28 73.24 102.39 175.63 36.94 21.46 5.34 4.38 68.12 73.24 28.01 102.39 1.21 204.85
0.01 0.01
3.29 3.29
31.45 6.25 12.00 3.07 52.77
29.00 6.25 12.00 0.26 47.51
0.01 31.45 6.25 12.00 3.07 52.78
3.29 29.00 6.25 12.00 0.26 50.80
213.00 -
441.21
213.00 441.21
911.92 911.92 1.15 1.15 13.74 250.00 263.74
3.84 2.38 6.22 0.04 0.28 0.28
13.13 13.13 0.53 6.18 1.14 1.09 0.17 0.03 9.14 0.04 730.45 730.45
0.03 0.03 -
0.03 0.12 0.06 0.21 -
911.92 911.92 3.84 2.38 0.03 6.25 0.04 1.15 0.28 1.43
13.13 13.13 0.53 6.18 1.14 1.09 0.17 0.03 0.12 0.06 0.03 9.35 0.04 730.45 13.74 250.00 994.19
- 1,346.44 13.74 250.00 263.74 1,346.44
- 1,346.44 13.74 250.00 - 1,610.18
Note: The names of related parties are disclosed under each class of transaction during the year where the transaction with a single related party is 10% or more of the aggregate transactions of a class.
31

13) (Note no. B (13) of schedule 13 of annual accounts) The Companys name has been changed to Essar Shipping Ports & Logistics Limited with effect from 24th March 2008. 14) (Note no. B (14) of schedule 13 of annual accounts) Pursuant to the notification on AS 11 (Revised 2003) issued by the Ministry of Corporate Affairs, requiring foreign exchange fluctuations on repayment of foreign currency loans and year end translation of foreign currency liabilities relating to assets acquired from a country outside India to be credited to the Statement of Profit and Loss as against the earlier practice of adjusting against the carrying cost of the assets. The Company has from the current year taken such exchange gain / loss to Statement of Profit and Loss. Accordingly the profit for the year and corresponding reserves are higher by Rs. 76.94 crore. 15) (Note no. B (15) of schedule 13 of annual accounts) Significant events occurring after the balance sheet date (not requiring adjustments to assets and liabilities as at balance sheet date) a) The Company has entered into a Memorandum of Agreement (MOA) for acquisition of two 53,500 DWT and 55,000 DWT Supramax dry bulk carriers, with delivery of the vessels scheduled by end of July 2008. The Company has entered into Memorandum of Agreement for sale of one 1,28,000 DWT suezmax Tanker and one 6290 DWT Product Carrier. d) c) The Companys entire shareholding in Vadinar Oil Terminal Limited, has since been transferred to Essar Ports & Terminals Ltd., its wholly owned subsidiary. The Scheme of merger approved by the Board of Directors on 13th February 2008 provides for: a) Merger of India Shipping, a company registered in Mauritius, which is the holding company of Essar Oilfields Services Ltd., Mauritius with the Company. Upon merger 18,96,06,113 equity shares of Rs. 10/- each at a premium of Rs. 210/- will be issued by the Company. Merger of Essar Sisco Ship Management Company Limited, a wholly owned subsidiary with the Company. The above scheme has been approved by both Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. e) The consent of the members through postal ballot has been obtained for the shifting of the registered office to the State of Gujarat which will be given effect to upon receipt of approval from Central Law Board.
b)
b)
16) (Note no. B (18) of schedule 13 of annual accounts) Previous years figures have been regrouped/reclassified wherever necessary. For and on behalf of the Board
32
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE

(As per Schedule VI, part (iv) of the Companies Act, 1956) I Registration Details Registration No. 2 7 7 1 State Code 0 8 Balance Sheet Date 3 1 0 3 2 0 0 8 II Capital Raised During the year (Amounts Rs. in Thousands) Public Issue Right Isuue N I L N I L Bonus Issue Private Placement N I L N I L III Position of Mobilisation and Deployment of Funds (Amount Rs. in Thousands)) Total Liabilities Total Asset 4 7 8 1 7 5 7 5 4 7 8 1 7 5 7 5 Source of Funds Paid- up Capital Reserves & Surplus 4 2 6 2 0 7 7 2 6 4 5 0 9 8 8 Secured Loans Unsecured loans 5 5 9 3 6 0 2 1 1 5 1 0 9 0 8 Application of Funds Net Fixed Assets Investments 2 1 2 3 7 3 3 1 3 1 2 4 6 1 7 9 Net Current Assets Misc. Expenditure ( 4 6 6 5 9 3 5 ) N I L Accumulated Losses N I L IV Performance of Company (Amount Rs. in Thousands) Turnover Total Expenditure 1 0 6 3 9 3 0 3 7 9 4 5 6 1 0 + Profit/Loss Before Tax + Profit /Loss After Tax + 2 6 9 3 6 9 3 + 2 4 1 6 7 3 2 Earning Per Share in Rs. Dividend Rate % 5 . 6 4 N I L V Generic Names of Three Principal Products/services of Company (as per monetary terms)_Not applicable being Shipping Company Item code No Product (ITC Code) N A Description Ship Operation and Chartering Item code No Product (ITC Code) N A Description N A Item code No Product (ITC Code) N A Description N A Item code No Product (ITC Code) N A Description N A Note: for ITC code of Products please refer to the publication Indian Trade Classfication based on harmonized Commodity description and coding system by Ministry of Commerce, Directorate General of Commercial Intelligence & Statistics Calcutta-700 001. For and on behalf of the Board Sanjay Mehta Managing Director V. Ashok Wholetime Director Place: Mumbai Date : June 20, 2008 N. Srinivasan Director Manoj Contractor Company Secretary
33
34
Vadinar Oil Terminal Limited Essar Logistics Limited Essar International Limited Energy Transportation International Limited Bermuda 31.03.08 1,952,000 100% 100% 100% 12,000 387,105,532 31.03.08 31.03.08 31.03.08 37,005 74% Bermuda Mauritius Hazira Mumbai 31.03.08 50,000 100% Energy II Limited Essar Ports & Terminals Limited Essar Bulk Terminal Limited Essar Bulk Terminal (Salaya) Limited Jamnagar 31.03.08 125,840,000 100% Essar Sisco Ship Management Company Limited Chennai Mumbai Guernsey $.34,408,891 $.327,296 ($. 941) ($. 306,474) NIL NIL $ 6,872,324/- ( $ 412,025/- ) $ 4,661/NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL For and on behalf of the Board Sanjay Mehta Managing Director V. Ashok Wholetime Diractor N. Srinivasan Director Manoj Contractor Company Secretary NIL NIL NIL NIL NIL NIL NIL NIL
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
PARTICULARS
The relevant financial year of the subsidiary ended on 31.03.08 31.03.08 31.03.08 No. of shares in the Subsidiaries held by the Company as on 31.03.08 854,661,500 46,387,940 73,000,000 Extent of holding by the Company as at the end of the financial period 100% 100% 100% The net aggregate amount of the Subsidiaries Profit/(Loss) so far as it concerns the members of the Company. a) Not dealt with in the Companys Accounts : i) For the financial year ended 31st March, 2008 (Rs.1,458,458,597) Rs.9,108,631 Rs.287,922,719 ii) For the previous Financial years of the Subsidiary since they became the Companys subsidiaries NIL (Rs.17,282,630) Rs.226,090,492 b) Dealt with in the Companys Accounts: i) For the financial year ended 31st March, 2008 NIL NIL NIL ii) For the previous financial years of the Subsidiary since they became the Companys subsidiaries NIL NIL NIL Change of interest of the Company in the Subsidiary between the end of the financial year of Subsidiary and that of the Company NIL NIL NIL Material changes between the end of the financial year of the Subsidiary and the end of the financial year of the Company in respect of Subsidiarys fixed assets, investments, monies lent and borrowed a) Fixed Assets NIL NIL NIL b) Investments NIL NIL NIL c) Money lent by the subsidiary NIL NIL NIL d) Money borrowed by the Subsidiary other than for meeting current Liabilities (Net) NIL NIL NIL
Details of Subsidiary Companies pursuant to approval obtained U/S.212 ( 8 )

(Rs. in crore) Vadinar Oil Terminal Limited Essar Sisco Ship Manag ment Company Limited Chennai Essar Logistics Limited Essar International Limited Energy Transportation International Limited Energy II Limited Essar Ports & Terminals Limited Essar Bulk Terminal Limited Essar Bulk terminal (Salaya) Limited
Name of Subsidiary Companies
Jamnagar Year ending Sr. No. Particulars 1 2 3 4 5 Capital Reserves Total Assets Total Liabilities Details of investments (including investments in subsidiaries) Turnover Profit before taxation Provision for taxation Profit after taxation Proposed dividend 944.39 3,131.82 3,131.82 31-Mar-08
Mumbai
Guernsey 31-Mar-08
Bermuda
Bermuda
Mauritius
Hazira
Mumbai
31-Mar-08 31-Mar-08
31-Mar-08 31-Mar-08
31-Mar-08 31-Mar-08 31-Mar-08
46.39 167.93 214.32 214.32
73.00 42.61 286.02 286.02
501.09 350.60 999.02 999.02
7.77 20.69 28.46 28.46
0.05 0.04 0.09 0.09
1,541.45 (1.20) 2,494.45 2,494.45
126.57 (0.02) 213.54 213.54
0.05 0.85 0.85
150.36 (145.59) 0.25 (145.84) -
1.49 1.41 0.50 0.91 -
874.27 44.00 15.21 28.79 -
7.82 185.40 138.15 138.15 -
1.40 1.31 1.31 -
0.02 -
1,544.88 0.29 (1.21) (1.21)
6 7 8 9 10
For and on behalf of the Board Sanjay Mehta Managing Director Place: Mumbai Date : June 20, 2008 V. Ashok Wholetime Diractor N. Srinivasan Director Manoj Contractor Company Secretary
35

AUDITORS REPORT ON ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF ESSAR SHIPPING PORTS & LOGISTICS LIMITED
(formerly known as Essar Shipping Limited) We have examined the attached abridged consolidated Balance Sheet of Essar Shipping Ports & Logistics Limited (formerly known as Essar Shipping Limited) (the Company), and its subsidiaries (together the Group) as at March 31, 2008 and also the abridged consolidated Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto, together with significant notes thereon. These abridged financial statements have been prepared by the Company pursuant to Rule 7A of the Companies (Central Governments) General Rules and Forms, 1956 and are based on the audited consolidated financial statements of the Group for the year ended March 31, 2008 prepared by the management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified under the Companies (Accounting Standards) Rules, 2006 and covered by our report of even date to the members of the Company, which is attached hereto.
For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner (Membership No. 31544)
36
AUDITORS REPORT ON CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF ESSAR SHIPPING PORTS & LOGISTICS LIMITED
(formerly known as Essar Shipping Limited) 1. We have audited the attached Consolidated Balance Sheet of Essar Shipping Ports & Logistics Limited (formerly Essar Shipping Limited) (the Company) and its subsidiaries (together the Group) as at March 31, 2008, the Consolidated Statement of Profit and Loss and the Consolidated Cash flow Statement for the year ended on that date annexed thereto. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified under the Companies (Accounting Standards) Rules, 2006. 4. Based on our audit, and to the best of our information and according to the explanations given to us, we are of the opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: In the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2008;
(i)
(ii) In the case of Consolidated Statement of Profit and Loss, of the consolidated results of operations of the Group for year ended on that date; and (iii) In the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the year ended on that date.
2.
3.
For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner (Membership No. 31544)
37

ABRIDGED CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

(Statement containing the salient features of Consolidated Balance Sheet as per Section 219 (1) (b) (iv) of the Companies Act, 1956)
As at 31.03.2008 (Rs. in crore) I. SOURCES OF FUNDS Shareholders funds: a) Capital i) Equity ii) Advance against allotment of shares b) Reserves and surplus i) Capital reserve ii) Revenue reserve iii) Revaluation reserve iv) Tonnage tax reserve v) Surplus in Statement of Profit and Loss Minority interest Loan funds: a) Secured loans b) Finance lease obligations c) Unsecured loans Deferred tax liability (net) Total II. APPLICATION OF FUNDS Fixed assets: a) Net block (Original cost Rs. 5931.22 (previous year Rs.2171.48) crore less depreciation Rs. 701.69 (previous year Rs. 698.11) crore) (Refer Note no.2) b) Capital work in progress (including capital advances) c) d) Expenditure during construction Goodwill on consolidation 2.27 15.00 17.27
As at 31.03.2007 (Rs. in crore)
426.21 47.14 307.10 728.58 538.01 162.50 1,258.24 2,994.43 32.60 3,084.63 778.09 307.33 4,170.05 18.90 7,689.33 2,744.23 393.34 160.00 307.10 805.16 112.27 132.50 1,010.83
426.21 89.73
2,367.86 -
3,297.57 7.89 6,189.26
5,229.53
1,473.37
181.68 5,411.21 94.25 1,387.62
1,863.28 3,336.65 1,039.07 9.65 2.27 1,363.15 1,365.42
Investments a) Quoted* b) Unquoted * (Aggregate market value of quoted investments is Rs. 78.32 ( previous year Rs. 19.86) crore) Current assets, loans and advances: a) Inventories b) Sundry debtors c) Cash and bank balances d) Other current assets e) Loans and advances Less: Current liabilities and provisions: a) Liabilities b) Provisions Net current assets Total
35.61 199.79 308.91 1.77 482.83 1,028.91 238.02 11.91 249.93 778.98 7,689.33
32.61 422.72 159.56 1.06 307.28 923.23 475.09 9.67 484.76 438.47 6,189.26
Refer notes to abridged consolidated financial statements Compiled from the audited annual accounts of the Company referred to in our report dated 20th June, 2008. As per our report of even date For and on behalf of the Board For Deloitte Haskins & Sells Chartered Accountants Sanjay Mehta N. Srinivasan Khurshed Pastakia Managing Director Director Partner V. Ashok Manoj Contractor Wholetime Director Company Secretary Place: Mumbai Date : June 20, 2008 38 Place: Mumbai Date : June 20, 2008 32nd Annual Report 2007-2008
ABRIDGED CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2008
Particulars For the year ended 31.03.2008 (Rs. in crore) 1,701.98 140.44 1.58 18.54 198.11 80.43 107.56 7.03 2,255.67 For the year ended 31.03.2007 (Rs. in crore) 1,658.76 1.23 6.59 13.48 1.22 0.25 1.17 1,682.70
INCOME a) Fleet operating and chartering earnings b) Port and terminal service income c) Dividend on non trade current Investments d) Interest income e) Other income i) Profit on sale of fleet ii) Exchange gain iii) Profit on sale of units iv) Miscellaneous income Total EXPENDITURE a) Fleet operating expenses i) Direct voyage expenses ii) Salaries, wages and other employee benefits - floating staff iii) Other fleet operating expenses b) Establishment and other expenses i) Salaries, wages and other employee benefits - office staff ii) Managerial remuneration iii) Auditors remuneration iv) Bad debts / provision for doubtful debts v) Other expenses Interest and finance expenses Depreciation Total PROFIT BEFORE TAX Less: Provision for taxation PROFIT BEFORE SHARE OF MINORITY INTEREST Add: Share of minoritys interest (loss) PROFIT FOR THE YEAR Balance brought forward from previous year AMOUNT AVAILABLE FOR APPROPRIATION APPROPRIATIONS: Transferred to tonnage tax reserve Balance carried forward to balance sheet
962.94 77.40 312.63 1,352.97 34.91 4.79 1.13 66.56 107.39 266.55 221.48 1,948.39 307.28 (43.68) 263.60 13.81 277.41 1,010.83 1,288.24 30.00 1,258.24 1,288.24
843.34 65.15 277.25 1,185.74 19.88 2.63 0.90 24.25 68.01 115.67 104.25 112.03 1,517.69 165.01 (7.26) 157.75 157.75 887.58 1,045.33 34.50 1,010.83 1,045.33 3.70
c) d)
Earnings per share - basic and diluted (Rs.) (face value of Rs. 10/- per share) 6.51 Refer notes to abridged consolidated financial statements Compiled from the audited annual accounts of the Company referred to in our report dated 20th June, 2008. As per our report of even date For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner Place: Mumbai Date : June 20, 2008 32nd Annual Report 2007-2008 For and on behalf of the Board Sanjay Mehta Managing Director V. Ashok Wholetime Director Place: Mumbai Date : June 20, 2008 N. Srinivasan Director
Manoj Contractor Company Secretary
39

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008
Year ended 31.3.2008 (Rs. in crore) A. CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax Adjustments for : Depreciation Interest and finance expenses Interest Income (Profit) / loss on sale of assets (net) (Profit)/ loss on sale of investments Provision for bad / doubtful debts Dividend on current investments Foreign exchange loss / (gain) Currency alignment on conversion of non - integral foreign subsidiaries and translation adjustments (net) Operating profit before working capital changes Adjustments for: Trade and other receivables Inventories Trade payables Cash generated from operations Income taxes paid (net of refund) Fringe benefit tax paid Net cash from operating activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets including capital work in progress/ advances Sale of fixed assets Insurance claim received on fixed asset Capital work in progress, expenditure during construction and capital advances Interest on loans given Advance received against sale of fixed asset Advance (repaid)/ received against sale of investments Proceeds from sale of current investments Investment in shares of subsidiaries Other investments purchased Fixed deposits matured / (placed) Dividend on current investments Interest received Net cash flow from investing activities (61.77) 22.06 (13.13) 1,635.57 (1,516.36) (331.86) (32.85) 1.58 17.83 (564.81) (337.57) 7.86 13.13 710.42 (922.52) (45.63) 1.23 8.11 (937.96) (493.26) 206.38 1.00 (390.90) 15.81 2.10 243.12 (3.00) (206.57) 351.11 (38.16) (3.79) 309.16 (265.58) (10.31) 316.31 394.62 (20.30) (2.44) 371.88 221.48 266.55 (18.54) (198.00) (107.56) (1.58) (79.12) (72.95) 317.56 112.03 104.25 (6.59) (13.44) 1.61 24.25 (1.23) (9.63) (22.06) 354.20 307.28 165.01 Year ended 31.3.2007 (Rs. in crore)
40
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008
Year ended 31.3.2008 (Rs. in crore) C. CASH FLOW FROM FINANCING ACTIVITIES Interest and finance expenses paid Proceeds from term loans Additional lease obligations Proceeds from unsecured loans Repayment of term loans Interest free advances given to Essar Oil Limited Interest free advances received from Essar Oil Limited Repayment of finance lease obligation Repayment of unsecured loans Payment of unclaimed debentures and interest thereon Payment/ refund of Inter corporate deposits Advance towards allottment of shares Net Cash flow from financing activities INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents as at beginning of the year Cash and cash equivalents as at end of year Non cash investing and financing transactions Conversion of share application money into shares Conversion of advance to loan Notes : Cash and cash equivalents include : Cash and bank balances Balances in fixed deposits (maturity period of less than 3 months) Unrealised (gain)/ loss on foreign currency on cash and cash equivalents Total cash and cash equivalents Balances in fixed deposits (maturity period of more than 3 months) CASH AND BANK BALANCES 147.65 112.70 1.98 262.33 46.58 308.91 29.59 42.45 0.87 72.91 86.64 159.55 89.73 96.00 (174.36) 233.71 445.27 447.33 (103.88) (24.49) (300.00) (0.45) (36.58) (42.59) 443.96 188.31 72.04 260.35 (94.27) 256.26 86.36 320.00 (82.68) (301.09) 301.09 (23.40) (320.00) (0.63) 20.00 89.73 251.37 (314.71) 386.75 72.04 Year ended 31.3.2007 (Rs. in crore)
Consolidated 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. As per our report of even date For Deloitte Haskins & Sells Chartered Accountants Khurshed Pastakia Partner V. Ashok Wholetime Director Place: Mumbai Date : June 20, 2008 Place: Mumbai Date : June 20, 2008 Manoj Contractor Company Secretary Sanjay Mehta Managing Director N. Srinivasan Director For and on behalf of the Board
41

NOTES TO ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2008. 1) Subsidiaries (Note no. B (1) of schedule 14 of annual accounts) The reporting date of all the subsidiaries is 31st March 2008. The list of the subsidiaries of the Company which are included in the consolidation and the Groups holding therein are as under:
Name of subsidiary Place of incorporation Proportion of ownership interest and voting power 100%
d)
Vehicles with the net book value of Rs. 3.16 (previous year 3.16) crore have been taken under Hire Purchase agreement from India Securities Limited and hypothecated to it. Gross block of plant and machinery includes Rs. 38.84 (previous year Rs. 38.84) crore leased out; W.D.V. as on March 31, 2008 is Rs. Nil (previous year Rs. Nil).
e)
3)
Vadinar Oil Terminal Limited* Essar Sisco Ship Management Company Limited Essar Logistics Limited Essar International Limited Energy Transportation International Limited @ Energy II Limited @ Essar Ports & Terminals Limited (w.e.f. 4th March, 2008) Essar Bulk Terminal Limited # (w.e.f. 29th March, 2008) Essar Bulk Terminal (Salaya) Limited # (w.e.f. 27th March, 2008) @ # *
India
The Company has pledged its investments in equity shares of Essar Oil Limited (EOL) amounting to Rs. 2.27 crore in favour of lenders for loans availed by EOL and in equity shares of Vodafone Essar Mobile Services Limited amounting to Rs.1 crore against loan availed for acquisition of shares. a) The Vadinar Oil Terminal Project (which was under construction and trial operations) (the Project) together with the corresponding loans from financial institutions and banks were taken over by Vadinar Oil Terminal Limited (VOTL) from its holding company, Essar Shipping Ports & Logistics Limited (formerly known as Essar Shipping Limited) on October 1, 2000. The construction activities at the project site were disrupted due to a cyclonic storm which hit the Gujarat coast in June 1998. The said disruption resulted in increase in the project cost requiring reappraisal of the funding requirements. The lenders to the Project had approved in August 2003, under RBIs Corporate Debt Restructuring Scheme, a debt restructuring package (the Package), which was further modified in December, 2003 and November, 2004. The Package provided for substantial relief in interest and in the time for repayment of loans, waiver of liquidated damages, disbursement of further loans, etc. The Package was formalised and a Master Restructuring Agreement (MRA) was entered into on 17th December, 2004. VOTL complied with all the relevant conditions as on January 31, 2005 as required under MRA entailing restructuring of the existing loans / interest dues and disbursement of new loans. The interest of Rs.869.08 crore for the period October, 1998 to December, 2003 in respect of the loans covered by MRA was converted into funded interest facilities. The MRA gave an option to VOTL to repay the said funded interest facilities at any point in time during its term at a reduced amount computed in accordance with the mechanism provided in the MRA or in full by one bullet payment in March, 2026. Under the said mechanism provided in the MRA, the funded interest facilities of Rs. 869.08 crore would stand fully discharged if Rs. 133.06 crore is paid on or before April 24, 2007. Should VOTL opt to discharge the funded interest facilities, subsequent to April 24, 2007, then
4)
India India Guernsey 100% 100% 100%
Bermuda Bermuda
100% 100%
Mauritius
100%
India
74%
India
100%
Subsidiary of Essar International Limited. Subsidiary of Essar Ports & Terminals Limited During the year, Vadinar Oil Terminal Limited had issued additional 9.5% share capital to a Company outside the Group. These shares were subsequently acquired by Essar Ports & Terminals Limited on 27th March, 2008.
2)
Fixed assets a) In order to reflect the fair value of the Companys fleet, the Company had revalued it on 1st April, 2004 resulting in an enhancement from its then carrying value by Rs. 669.52 crore. The Company again revalued its fleet on 31st March, 2008 resulting in an enhancement of Rs. 452.69 crore. These enhancements have been credited to the fixed assets revaluation reserve. Incremental depreciation for the year on the enhanced value of Rs.26.95 (previous year Rs. 34.90) crore has been recouped from the fixed assets revaluation reserve. Loans amounting to Rs.794.37 (previous year Rs.605.44) crore is secured by first charge on fleet, barge unloader and two dredgers. The Company has taken two vessels and an aircraft on finance lease.
b)
c)
42
the expected economic outflow of Rs.133.06 crore being the present value of the obligation under the mechanism would gradually increase at a rate and as per the mechanism provided in the MRA. VOTL has plans to discharge earlier the loan liabilities covered by MRA by getting the same refinanced. In order to give accounting effect to reflect the substance of the transaction on the date of MRA, VOTL has followed the principles laid down in IAS 39 (revised) - Financial Instruments Recognition and Measurement and FAS 15 - Accounting by Debtors and Creditors for Troubled Debt Restructurings in the absence of specific guidance under Indian GAAP to cover the above-mentioned situation. Accordingly, the net amount of Rs. 736.02 crore, being the difference between the obligation and the present value of the funded interest facilities if the same is paid on or before 24th April, 2007, has been shown as deduction from funded interest facilities from banks and financial institutions with a corresponding deduction from Expenditure during construction. The amount deducted from funded interest facilities from banks and financial institutions has been adjusted by Rs.13.81crore being the differential present value of the obligation from 24th April 2007 to 31st March 2008, computed as per the mechanism provided in MRA, and included in Interest and finance cost. The loan balances (including funded interest facilities) covered by MRA (hereinafter referred to as the loan balances) have been considered in the books of account in accordance with the bilateral agreements, wherever signed. Where the same are yet to be signed, the loan balances and interest accrued and payable up to 31st March, 2008 have been considered based on the confirmation of balances as at 31st March, 2008 wherever received and agreed by VOTL, or as per MRA, where the confirmations have not been received or have not been agreed pending reconciliation with the lenders. b) Capital work-in-progress (CWIP) and Expenditure during construction (EDC) includes an amount of Rs.8.33 (previous year Rs.29.08) crore and Rs.8.00 (previous year Rs. 24.24) crore respectively apportioned / allocated by Essar Oil Limited (EOL) during the year in respect of composite contracts / common expenditure. The expenditure has been accounted for based on debit note(s) raised by EOL and accepted by VOTL. Amount included in CWIP has been capitalised on 1st July 2007 and amount included in EDC has been proportionately capitalised and charged to Statement of Profit and Loss. After successful completion of trial and testing runs of marine, road facilities, tankages and pipelines,
VOTL commenced the operation of all facilities except the rail gantries on 1st July, 2007 and operation of rail gantries on 1st February, 2008. Accordingly, Single point mooring buoy (SPM), Jetty dispatch facilities, road dispatch gantries, pipelines and tankages amounting to Rs.2,378.08 crore, being the cost of construction of these facilities, are capitalised on 1st July, 2007 and Rs.505.65crore, being cost of rail gantries, are capitalised on 1st February, 2008. d) Term loans and funded interest facilities amounting to Rs. 2,286.75 (previous year Rs. 2,134.63) crore from banks and financial institutions (other than (e) below) are secured / to be secured by first ranking security interests on all movable and immovable assets, present and future, pledge of shares of VOTL held by the promoters and persons associated with the promoters / VOTL, 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 EOL pertaining to terminal project, guarantee by the promoters and guarantee of the Company for Rs. 250 crore. The facilities provided by a financial institutions upto Rs. 200 crore and interest and other charges thereon are secured by a guarantee of EOL for Rs. 200 crore. 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. During the year, Essar Bulk Terminal Limited (EBTL) has undertaken a project for providing Dry Bulk Terminal Services. To provide such services, EBTL has entered into various arrangements for the construction of Jetty terminal, dredging of the channel and procurement of equipments. Estimated project cost of construction is Rs. 738 crore.
e)
f)
5)
Sundry debtors (Note no. B (4) of schedule 14 of annual accounts) Sundry debtors (unsecured and considered good) outstanding for more than six months include Rs.3.70 (previous year Rs.3.70) crore awarded on arbitration in year 2002-03. The concerned debtor went into appeal and the matter is pending before the Honorable High Court of Madras. As the arbitration tribunal award is in favour of the Group, the debt is considered good.
c)
43

6) (Note no. B (5) of schedule 14 of annual accounts) a) Contingent liabilities
(Rs. in crore) Particulars i) ii) iii) iv) Claims against the Group not acknowledged as debt Guarantees given by banks* Letter of credit (capital commitment) Corporate guarantees on behalf of Essar Shipping & Logistics Limited ** Dividend on optionally convertible cumulative redeemable preference share Guarantee on behalf of others As on 31.03.2008 17.27 15.98 As on 31.03.2007 12.53 14.80 As on 31.03.2008 24.56
Particulars Minimum Interest lease payments Present value of minimum lease payments
8)
Leases (Note no. B (7) of schedule 14 of annual accounts) (a) Finance leases: The minimum lease rentals outstanding at the year end are as under: (Rs. in crore)
As on 31.03.2007
Minimum Interest lease payments Present value of minimum lease payments
1,346.44
730.45
Future lease rental obligation payable : - Not later than one year - Later than one year but not later than five years - Later than five years 86.09 48.87
v)
0.01 104.00
104.00
vi)
37.22 586.77 156.61 780.60
55.60
29.23
26.37 144.19 225.94 396.50
vii) Disputed sales tax demand under appeal in the honorable High Court of Madras. viii) Income tax appeals before ITAT ix) x) xi) Bills discounted with banks Letter of credit discounted with bank Interest on facility E on principal amount of facility stoppage as per MRA
58.10 110.76 80.00 22.44
58.10 109.20 49.86 76.95
789.76 202.99 182.65 26.04
257.75 113.56 270.14 44.20
Total
1058.50 277.90
583.49 186.99
(b) Operating leases: As at the balance sheet date the outstanding commitments by the lessee on account of assets leased out by the Group under non-cancelable leases entered are Nil (previous year Rs.20.32 crore). However VOTL has a committed liability of Rs.6.95 (previous year Rs. 7.21) crore for future lease rental charges in respect of land taken on lease which is owned by EOL. 9) Business segment and geographical segment: (Note no. B (8) of schedule 14 of annual accounts) a) Business segment Year ended 31.03.2008 Segment revenue Sea transport Surface transport Port and terminal services Unallocated Total Less : Inter segment revenue Net income from operations Segment results Sea transport Surface transport Port and terminal services Unallocated Total Year ended 31.03.2007
41.43
Note: * Includes guarantee of Rs. 13.74 crore issued by bank in favour of ETIL which is backed by counter guarantee of the Company ** Corporate guarantee on behalf of Essar Shipping & Logistics Limited has been backed by a counter guarantee from Essar Global Limited.
b)
Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 2,580.79 (previous year Rs. 56.42) crore. Guarantee given by others on behalf of VOTL in respect of loan liability already existing in the books of account Rs. 200 (previous year Rs. 200) crore.
Rs. in crore Rs. in crore 1,433.34 493.23 140.44 210.76 2,277.77 (22.10) 2,255.67 338.90 19.60 6.33 190.46 555.29 1,391.55 303.25 16.97 1,711.77 (29.07) 1,682.70 147.50 19.59 95.58 262.67
c)
7)
(Note no. B (6) of schedule 14 of annual accounts) The details for provision made by the Company for present obligations arising out of past events are as under: (Rs. in crore)
Particulars
As on Additions Reversed/ As on 01.04.2007 during the Paid 31.03.2008 period during the period
Claims against the Company pending arbitration proceedings
0.82
0.82
44
Year ended 31.03.2008 Less: Unallocable interest and finance charges (net) Profit before tax Less: Income tax Profit after tax, before share of minority interest Add: Share of loss transferred to minority Profit for the year Segment assets Sea transport Surface transport Port & terminal services Unallocated Total assets Segment liabilities Sea transport Surface transport Port & terminal services Unallocated Total liabilities Fixed assets acquired during the year Sea transport Surface transport Port & terminal services Total Depreciation* Sea transport Surface transport Port & terminal services Total Non cash expense other than depreciation Bad debts / provision for doubtful debts Sea transport Surface transport Port & terminal services Total
Year ended 31.03.2007
b)
Geographical segment The Groups fleet operations are managed on a worldwide basis from India. Fleet operating and chartering earnings are based on the geographical location of customers. (Rs. in crore)
Rs. in crore Rs. in crore
(248.01) 307.28 (43.68) 263.60 13.81 277.41 2,695.22 93.40 4,664.38 486.65 7,939.65 (1,031.54) (43.75) (102.21) (3,294.38) (4,471.88)
(97.66) 165.01 (7.26) 157.75 157.75 2,050.93 52.00 4,571.09 6,674.02 (265.54) (123.54) (86.11) (3,315.03) (3,790.22) Segment revenue Year ended 31.03.2008 1,664.88 90.08 70.56 86.08 77.26 57.54 209.27 2,255.67
Year ended 31.03.2007 1,261.27 20.63 60.52 157.69 37.23 128.39 16.97 1,682.70
India China U.S.A U.K. UAE Rest of the world Unallocated Total
The main operating assets represent floating fleet, which is not identifiable to any geographical location. 10) Earnings per share: (Note no. B (9) of schedule 14 of annual accounts) The calculation of the basic and diluted earnings per share is based on the following data: Year ended
568.83 3.92 2,991.96 3,564.71 131.54 1.66 88.28 221.48
117.02 8.96 125.98 111.69 0.34 112.03
31.03.2008 Earnings for the purpose of basic earnings per share (net profit for the year after share of minority interest) Rs. in Crore Equity shares at the beginning and end of the year (Nos.)
31.03.2007
277.41
157.75
426,077,207 426,077,207
Weighted average number of equity shares for the purpose of calculating basic and diluted earnings per share (Nos.) 426,077,207 426,077,207 Basic and diluted earnings per share of face value of Rs.10/- each (Rs.)
23.67 0.58 24.25
6.51
3.70
11) (Note no. B (10) of schedule 14 of annual accounts) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:
* excludes depreciation of Rs. 4.43 (previous year Rs.3.33) crore transferred to expenditure during construction and Rs. 26.95 (previous year Rs.34.90) crore recouped from fixed assets revaluation reserve. 32nd Annual Report 2007-2008
45

a) Amount receivable in foreign currency on account of the following: Rs. in crore As on As on 31.03.08 31.03.07 i) Export of goods and services ii) Advance to vendors Currency In million As on As on 31.03.08 31.03.07 12) Deferred tax liability (Note no. B (12) of schedule 14 of annual accounts) The components of net deferred tax liability are as follows: (Rs. in crore) Particulars 38.92 2.89 0.11 3.00 23.98 1.69 0.79 2.48 USD USD EUR 9.84 0.60 0.60 5.55 0.30 0.01 0.31 Deferred tax liability Depreciation on fixed assets (A) Deferred tax assets Unabsorbed depreciation Other disallowance (B) 93.41 14.76 USD 23.71 3.41 Net deferred tax liability (A-B) 0.82 0.82 18.90 6.94 0.37 7.31 7.86 19.72 19.72 15.17 15.17 As at 31st March 2008 As at 31st March 2007
Particulars
iii) Bank balance and fixed deposits including interest accrued thereon b)
Amount payable in foreign currency on account of the following: Rs. in crore As on As on 31.03.08 31.03.07 Currency In million As on As on 31.03.08 31.03.07
13) (Note no. B (13) of schedule 14 of annual accounts) Essar Logistics Limited (subsidiary) has changed its method of depreciation on fixed assets with retrospective effect from straight line method to written down value method in respect of furniture and fixtures, office equipments, motor cars and two wheelers. The additional depreciation due to change in the method amounting to Rs.0.08 crore has been charged to the Statement of Profit and Loss. 14) Employee benefits: (Note no. B (14) of schedule 14 of annual accounts) Accounting Standard (AS) 15 Employee benefits has been adopted by the Group effective from 1st April 2007. In accordance with the standard, the additional obligation of the Group on account of employee benefits, based on independent actuarial valuation amounting to Rs 2.66 crore (net of deferred tax adjustment of Rs.0.32 crore) has been accounted by debiting the opening balance of revenue reserve / Statement of Profit and Loss, as appropriate, as on 1st April 2007. 15) Related party transactions: (Note no. B (15) of schedule 14 of annual accounts) (a) Investing company in respect of which the Company is an associate: i) ii) Teletech Investments (India) Limited India Shipping
Particulars
i)
Import of goods and services
21.42 0.17 0.03 0.62 0.29 0.37 0.05 22.95
54.62 0.21 0.01 0.04 0.03 0.28 0.23 0.15 55.57
USD GBP DKK DHS EUR JY SGD HKD AED
3.36 0.01 0.03 0.10 5.25 0.12 0.01 8.88
9.13 0.02 0.00 0.00 0.00 0.38 0.01 0.02 9.56
ii) Advance from customer 0.09 USD iii) Outstanding liabilities 0.45 USD 0.09 iv) Lease obligation 778.09 393.34 USD 193.99 89.86 v) Secured loans payable (including interest accrued) 558.36 495.56 USD 139.21 113.19 vi) Letter of credit for supply 14.79 USD 3.38 vii) Liability on account of Essar Shipping & Logistics Limited 48.13 - USD 12.00 Note: Since the majority of the revenue of the Group is in foreign currency there is a natural hedge against foreign exchange exposures. 46
(b) Individuals owning directly or indirectly an interest in the voting power that gives them control or significant influence: i) ii) Mr. Shashi Ruia, Chairman Mr. Ravi Ruia, Vice Chairman
iii) Mr. Anshuman Ruia, Director iv) Mr. Rewant Ruia, Director
(c) Key Management Personnel: i) ii) iii) iv) v) vi) vii) Mr. Sanjay Mehta, Managing Director (Essar Shipping Ports & Logistics Limited) Mr. A. R. Ramakrishnan, Wholetime Director (Essar Shipping Ports & Logistics Limited) Mr. V. Ashok, Wholetime Director (Essar Shipping Ports & Logistics Limited) Mr. K. K. Sinha, Wholetime Director (Vadinar Oil Terminal Limited) Mr. Rajen Sachar, Manager (Vadinar Oil Terminal Limited) Mr. A. K. Musaddy, Wholetime Director (Essar Logistics Limited) Admiral Sampath Gopal, Wholetime Director (Essar Bulk Terminal Limited)
(v) (vi) (vii) (viii) (ix) (x) (xi) (xii)
Essar House Services Limited Essar Steel Limited Futura Travels Limited India Securities Limited Essar Oil Limited Bhander Power Limited Essar Steel Hazira Limited Essar Power Limited
(xiii) Clickforsteel Services Limited (xiv) Essar Shipping & Logistics Limited (xv) Essar Investments Limited (xvi) Essar Teleholdings Limited (xvii) Essar Oilfields Services Limited (xviii) Aegis BPO Services Limited (xix) Essar Steel Limited (SEZ unit ) (xx) Essar Properties Limited (xxi) Imperial Consultants and Securities Private Limited (xxii) Essar Project Management Consultancy Limited (xxiii) Essar Engineering Services Limited (xxiv) Vadinar Power Company Limited
(d) Other related parties where there have been transactions: Enterprises commonly controlled or influenced by major shareholders / directors / relatives of directors of the Group: (i) Essar Information Technology Limited (ii) Essar Agrotech Limited (iii) Essar Constructions (India) Limited (iv) Essar House Limited Transactions with related parties are as under: Other related parties 2007-08 Fleet operating income Essar Steel Limited Essar Steel Hazira Limited Essar Oil Limited Essar Constructions (India) Limited Others Total Port, terminal and technical service Essar Oil Limited Sale of materials Essar Oil Limited Equipment lease rental / hire income Essar Steel Limited Interest receipts Essar Shipping & Logistics Limited Agency and management fees Essar Shipping & Logistics Limited 0.35 1.00 0.19 0.19 11.84 202.29 56.84 1,130.49 3.90 35.62 5.21 0.36 1,175.58 1,013.31 77.66 14.97 1.16 1,107.10 2006-07
(Rs. in crore) Key management personnel 2007-08 2006-07 2007-08
Total 2006-07
1,130.49 3.90 35.62 5.21 0.36 1,175.58 202.29 0.19 1.00 0.35
1,013.31 77.66 14.97 1.16 1,107.10 56.84 11.84 0.19 -
47

(Rs. in crore) Other related parties 2007-08 Remuneration Sanjay Mehta A. R.Ramkrishnan V. Ashok A. K. Musaddy K. K. Sinha Rajen Sachar Sampat Gopal Total Fuel oil Essar Oil Limited Stores and spares Essar Constructions (India) Limited Essar Steel Limited Total Business center fees Essar House Services Limited Rent Essar House Limited Essar House Services Limited Total Repair and maintenance Essar Agrotech Limited Essar Constructions (India) Limited Total Travelling / lodging expenses Futura Travels Limited Essar Properties Limited Total Freight / lease hire charges Essar Constructions (India) Limited Essar Oil Limited Total Jetty constructions and PMC Essar Constructions (India) Limited Essar Project Management Consultants Limited Total Steel procurement Essar Steel Limited Reimbursement of expenses Essar House Limited Essar House Services Limited Essar Constructions (India) Limited Essar Steel Limited Futura Travels Limited Total 0.87 0.05 5.31 5.36 13.56 4.20 0.24 4.44 0.30 1.91 2.21 4.97 0.01 4.98 7.80 0.25 8.05 3.80 0.23 4.03 0.68 1.14 0.12 0.01 19.53 20.80 2006-07 3.22 1.61 1.61 20.19 4.80 4.80 0.30 1.78 2.08 4.24 4.24 5.46 0.25 5.71 0.03 0.75 16.11 16.89 Key management personnel 2007-08 0.64 1.04 0.78 0.78 0.98 0.30 0.27 4.79 2006-07 0.62 0.90 0.52 0.33 0.26 2.63 2007-08 0.64 1.04 0.78 0.78 0.98 0.30 0.27 4.79 0.87 0.05 5.31 5.36 13.56 4.20 0.24 4.44 0.30 1.91 2.21 4.97 0.01 4.98 7.80 0.25 8.05 3.80 0.23 4.03 0.68 1.14 0.12 0.01 19.53 20.80
Total 2006-07 0.62 0.90 0.52 0.33 0.26 2.63 3.22 1.61 1.61 20.19 4.80 4.80 0.30 1.78 2.08 4.24 4.24 5.46 0.25 5.71 0.03 0.75 16.11 16.89
48
(Rs. in crore) Other related parties 2007-08 Professional / advisory / agency fees Essar Information Technology Limited Essar Steel Limited India Securities Limited Aegis BPO Services Limited Essar Oil Limited Total Purchase of materials Essar Constructions (India) Limited Cenvat receivable Essar Oil Limited Cenvat payable Essar Constructions (India) Limited Interest on loan Essar Shipping & Logistics Limited Essar Steel Limited India Securities Limited Total Loan arrangement expenses India Securities Limited Sale of fixed assets Essar Shipping & Logistics (Panama) Inc. Purchase of fixed assets Essar Constructions (India) Limited Fixed asset on finance lease Essar Shipping & Logistics Limited Loans and advances including deposits given Essar House Limited Essar House Services Limited Essar Oil Limited Essar Information Technology Limited Essar Oilfields Services Limited Essar Investments Limited Essar Steel Limited Essar Constructions (India) Limited Essar Steel Hazira Limited Essar Shipping & Logistics Limited Essar Bulk Terminal Limited Total CWIP capitalised during the year Essar Constructions (India) Limited CWIP- expansion Essar Engineering Services Limited 2006-07 Key management personnel 2007-08 2006-07 2007-08
Total 2006-07
0.43 0.05 0.22 0.22 3.17 4.09 0.54 7.63 14.65 0.47 0.40 0.87 5.38 0.89 445.28
0.40 0.11 0.22 0.45 1.18 19.39 19.39 9.11 9.11 0.02 1.14 -
0.43 0.05 0.22 0.22 3.17 4.09 0.54 7.63 14.65 0.47 0.40 0.87 5.38 0.89 445.28
0.40 0.11 0.22 0.45 1.18 19.39 19.39 9.11 9.11 0.02 1.14 -
2.45 1.41 112.37 0.71 0.42 25.08 0.07 0.02 28.27 170.80 31.33 13.62
3.50 416.96 0.15 0.58 0.17 421.36 177.26
2.45 1.41 112.37 0.71 0.42 25.08 0.07 0.02 28.27 170.80 31.33 13.62
3.50 416.96 0.15 0.58 0.17 421.36 177.26
49

(Rs. in crore) Other related parties 2007-08 Advances for expansion project Essar Constructions (India) Limited Loans and advances received Essar Steel Limited Essar Shipping & Logistics Limited Essar Investments Limited India Securities Limited Essar Oil Limited Total Advance received against sale of investments/allotment of shares Essar Shipping & Logistics Limited Issue of equity shares Essar Shipping & Logistics Limited Allotment of preference shares Essar Shipping & Logistics Limited Guarantee on behalf of others Essar Shipping & Logistics Limited Outstanding as on 31/03/2008 Sundry debtors Essar Steel Limited Essar Steel Hazira Limited Essar Shipping & Logistics (Panama) Inc. Essar Oil Limited Others Total Loans and advances including deposits given Essar House Limited Futura Travels Limited Essar Oil Limited Essar Infrastructure Holding Company Limited Essar Information Technology Limited Essar House Services Limited Essar Steel Limited Essar Oilfields Services Limited Essar Steel Limited Essar Constructions (India) Limited Essar Shipping & Logistics Limited Total 31.45 6.25 161.39 0.19 0.71 1.41 89.50 28.07 319.92 29.00 6.25 151.18 0.20 0.16 0.10 1.15 88.42 276.46 31.45 6.25 161.39 0.19 0.71 1.41 89.50 28.07 319.92 29.00 6.25 151.18 0.20 0.16 0.10 1.15 88.42 276.46 111.60 0.34 5.34 37.65 1.47 156.40 202.73 109.35 71.06 0.55 383.69 111.60 0.34 5.34 37.65 1.47 156.40 202.73 109.35 71.06 0.55 383.69 615.99 730.45 615.99 730.45 82.02 82.02 89.73 89.73 57.04 102.86 57.04 102.86 159.28 12.00 42.03 213.31 42.40 3.16 56.02 101.58 159.28 12.00 42.03 213.31 42.40 3.16 56.02 101.58 135.72 89.50 135.72 89.50 2006-07 Key management personnel 2007-08 2006-07 2007-08
Total 2006-07
50
(Rs. in crore) Other related parties 2007-08 Advance received against allotment of shares Essar Shipping & Logistics Limited Unsecured loan Essar Shipping & Logistics Limited Lease loan obligation Essar Shipping & Logistics Limited Sundry creditors Essar Oil Limited Essar Agrotech Limited Futura Travels Limited Essar Shipping & Logistics Limited Essar Constructions (India) Limited Essar Engineering Services Limited Essar House Services Limited Essar Steel Limited Essar Investments Limited Essar Project Management Consultants Limited Aegis BPO Services Limited Sanjay Mehta A. R. Ramakrishnan V. Ashok K. K. Sinha Rajen Sachar Total Security deposit received Essar Steel Limited Interest accrued but not due on loan Essar Shipping & Logistics Limited Essar Steel Limited Total Guarantee on behalf of others Essar Shipping & Logistics Limited Essar Oil Limited Total Guarantee availed for loan taken Essar Oil Limited 200.00 200.00 200.00 200.00 Note: 1) The names of related parties are disclosed under each class of transaction during the year where the transaction with a single related party is 10% or more of the aggregate transactions of a class. 2) The Company has paid sitting fees to group of individuals having significant influence: Rs.0.01 (previous year Rs.0.01) crore. 1,346.44 104.00 1,450.44 730.45 104.00 834.45 1,346.44 104.00 1,450.44 730.45 104.00 834.45 0.47 0.47 7.06 7.06 0.47 0.47 7.06 7.06 0.04 0.04 0.04 0.04 17.60 3.90 2.38 12.72 13.11 0.35 12.00 0.10 62.16 0.53 0.03 6.25 20.53 1.09 187.30 0.17 215.90 0.03 0.03 0.03 0.12 0.06 0.09 0.04 0.34 17.60 3.90 2.38 12.72 13.11 0.35 12.00 0.10 0.03 62.19 0.53 0.03 6.25 20.53 1.09 187.30 0.17 0.03 0.12 0.06 0.09 0.04 216.24 441.21 441.21 147.33 147.33 47.14 102.86 47.14 102.86 2006-07 Key management personnel 2007-08 2006-07 2007-08
Total 2006-07
51

16) (Note no. B (16) of schedule 14 of annual accounts) Pursuant to the notification on AS 11 issued by the Ministry of Corporate Affairs, requiring foreign exchange fluctuations on repayment of foreign currency loans and year end translation of foreign currency liabilities relating to assets acquired from a country outside India to be credited to the Statement of Profit and Loss as against the earlier practice of adjusting against the carrying cost of the assets. The Company has from the current year taken such exchange gain / loss to Statement of Profit and Loss. Accordingly the profit for the year and corresponding reserves are higher by Rs. 76.94 crore. 17) (Note no. B (17) of schedule 14 of annual accounts) The Companys name has been changed to Essar Shipping Ports & Logistics Limited with effect from 24th March, 2008. 18) (Note no. B (18) of schedule 14 of annual accounts) Significant events occurring after the balance-sheet date (not requiring adjustments to assets and liabilities as at balance sheet date): e) a) The Company has entered into a Memorandum of Agreement (MOA) for acquisition of two 53,500 DWT and 55,000 DWT Supramax dry bulk carriers, with delivery of the vessels scheduled beyond July 2008. The Company has entered into Memorandum of Agreement for sale of one 1, 28,000 DWT Suezmax Tanker and one 6,290 DWT Product Carrier. ii) c) The Companys entire shareholding in Vadinar Oil Terminal Limited has since been transferred to Essar Ports & Terminals Limited, its wholly owned subsidiary. The Scheme of merger approved by the Board of Directors on 13th February 2008 provides for: i) Merger of India Shipping, a company registered in Mauritius, which is the holding company of Essar Oilfields Services Ltd., Mauritius with the Company. Upon merger 18,96,06,113 equity shares of Rs. 10/- each at a premium of Rs. 210/- will be issued by the Company. Merger of Essar Sisco Ship Management Company Limited, a wholly owned subsidiary with the Company. The above scheme has been approved by both Bombay Stock Exchange and National Stock Exchange of India Limited. The consent of the members through postal ballot has been obtained for the shifting of the registered office to the State of Gujarat which will be given effect to upon receipt of approval from Company Law Board.
d)
b)
19) (Note no. B (19) of schedule 14 of annual accounts) Previous years figures have been regrouped / reclassified wherever necessary. For and on behalf of the Board
52
ESSAR SHIPPING PORTS & LOGISTICS LIMITED

REGD. OFFICE: Administrative Building, Essar Refinery Complex, Okha Highway (SH 25), Taluka Khambhalia, District Jamnagar, Gujarat 361 305
PROXY FORM
Members Folio No. : _________________________ and/or DPID No./Client ID No.* : I/We.....................................................................................................................................................................................................of ................................................................................in the district of............................................................being a member of ESSAR SHIPPING PORTS & LOGISTICS LIMITED, hereby appoint......................................................................of ..................................................or failing him.....................................................of.................................................as my/our proxy to vote for me/us and on my/our behalf at the THIRTY-SECOND ANNUAL GENERAL MEETING of the Company to be held on Saturday, September 27, 2008 at 3.30 P.M. at the Registered Office of the Company at Administrative Building, Essar Refinery Complex, Okha Highway (SH 25), Taluka Khambhalia, District Jamnagar, Gujarat 361 305 and at every adjournment thereof. Signed this.........................................day of.................................................2008. PROXY FORM MUST REACH THE COMPANYS REGD. OFFICE, AT ADMINISTRATIVE BUILDING, ESSAR REFINERY COMPLEX, OKHA HIGHWAY (SH 25), TALUKA KHAMBHALIA, DISTRICT JAMNAGAR, GUJARAT 361 305, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. * Applicable only in case of Investors holding shares in electronic form. Affix Re.1 Revenue Stamp SIGNATURE
ESSAR SHIPPING PORTS & LOGISTICS LIMITED

REGD. OFFICE: Administrative Building, Essar Refinery Complex, Okha Highway (SH 25), Taluka Khambhalia, District Jamnagar, Gujarat 361 305
ATTENDANCE SLIP
Members Folio No. : _________________________ and/or DPID No./Client ID No.* :
32nd ANNUAL GENERAL MEETING TIME : 3.30 P.M. DATE : SEPTEMBER 27, 2008 VENUE : ADMINISTRATIVE BUILDING ESSAR REFINERY COMPLEX OKHA HIGHWAY (SH-25) TALUKA KHAMBHALIA DISTRICT JAMNAGAR GUJARAT 361 305 MEMBER PROXY [Name in Capital letters] I hereby record my presence at the 32nd AGM of the Company Signature of Member/Proxy NOTE: 1. Admission restricted to Members/Proxies only. 2. Please avoid bringing children/non-members with you. * Applicable only in case of Investors holding shares in electronic form.
Book Post
If undelivered, please return to : Data Software Research Company Private Limited Unit : Essar Shipping Ports & Logistics Limited Sree Sovereign Complex No. 22, 4th Cross Street, Trustpuram Kodambakkam, Chennai - 600 024

Esl Ar 07 08

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Esl Ar 07 08

Transféré par

Droits d'auteur :

Formats disponibles

Dear Members, As you are aware, the Registered Office of the Company has been shifted.

The new address is as under:

Manoj Contractor Company Secretary

COMPENSATION COMMITTEE Ravi Ruia Anshuman Ruia Sanjay Mehta

COMPANY SECRETARY Manoj Contractor

AUDITORS Deloitte Haskins & Sells

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

By Order of the Board

MANOJ CONTRACTOR Company Secretary Jamnagar July 29, 2008

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

32nd Annual Report 2007-2008

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

MANAGEMENT DISCUSSION & ANALYSIS:

32nd Annual Report 2007-2008

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

TOTAL INCOME 2,256 1,683 34.1%

1500 1000 500 0

PROFIT AFTER TAX

200 150 100 50 0

600 400 200 0

496 109 78 278 62 200

Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

0.50 0.40 0.30 0.20 0.10 0.00

2002 2003 2004 2005 2006 2007 2008 Years

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

32nd Annual Report 2007-2008

Rs. 563.85 crore

Jamnagar July 29, 2008

Sanjay Mehta Managing Director

Essar Shipping Ports & Logistics Limited

CORPORATE GOVERNANCE REPORT

Mr. R. N. Bansal (Chairman) Mr. Anshuman Ruia Mr. N. Srinivasan

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

10.15 AM 10.15 AM 11.00 AM 11.00 AM

Scrip Code : 500630 32nd Annual Report 2007-2008

G. Share Price performance in comparison to BSE Sensex

Status of Dematerialisation of shares as on March 31, 2008:

22000 21000 20000 19000 18000 17000 16000 15000

175 150 125 100 75 50 25 0

Months Share price on BSE BSE Sensex

H. Shareholding Pattern as on March 31, 2008:

Distribution of Shareholding as on March 31, 2008:

Essar Shipping Ports & Logistics Limited

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

Declaration on Compliance of the Companys Code of Conduct

32nd Annual Report 2007-2008

Place: Mumbai Date : June 20, 2008

32nd Annual Report 2007-2008

Essar Shipping Ports & Logistics Limited

ANNEXURE TO THE AUDITORS REPORT

Income tax Act, 1961

110.76 (advance tax payment Rs. 47.27) 58.10

Appellate Authority Tribunal Level Madras High Court.

Tamil Nadu Sales Tax Act, 1959