essar stee iia iite - taxsutra...39 t annua report 11 1 essar stee iia iite 1 board of directors...

139th ANNUAL REPORT 2014-15

Essar Steel India Limited

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BOARD OF DIRECTORSShashi Ruia Chairman (upto 30.03.2015)

Prashant Ruia Director

Jatinder Mehra Director

V. G. Raghavan Independent Director

Rana Som Director

Arvind Pande Independent Director

Surinder Singh Kohli Independent Director (upto 12.03.2015)

Alok Dhir Independent Director (upto 13.05.2015)

S. Santhanakrishnan Nominee Director [SBI]

Hiranmoy Biswas Nominee Director [IDBI] Firdose Vandrevala Executive Vice Chairman

Dilip C. Oommen Managing Director & CEO

Mahadev Iyer Director (Finance) & CFO

Gayathri Sukumar Director (w.e.f. 30.03.2015)

Rakesh Darji Company Secretary

REGISTERED OFFICE

Post : Hazira Pin : 394 270Dist : Surat,GujaratTel. : 0261-668 2400Fax : 0261-668 5731email : [email protected] : U27100GJ1976FLC013787

CORPORATE OFFICE

Essar House, Tower 2,11 Keshavrao Khadye Marg, Equinox Business Park,Mahalaxmi, Mumbai - 400 034 (Peninsula Techno Park),Tel. : 022-66601100 Off Bandra - Kurla Complex,Fax : 022-23532695 L B S Marg, Kurla (W), Mumbai - 400 070. Tel. : 022-67335000 Fax : 022-67082198

CONTENTSNotice 02Board’s Report 10Auditors’ Report 39Balance Sheet 44Profit & Loss Account 45Cash Flow Statement 46Notes to Financial Statements 48Consolidated Financial Statements 92Proxy Form 151

BANKERS

Allahabad BankAxis Bank Ltd.Bank of BarodaBank of IndiaCanara BankCentral Bank of IndiaCorporation BankExport Import Bank of IndiaHDFC Bank Ltd.ICICI Bank Ltd.IDBI Bank Ltd.Indian Overseas BankPunjab National BankState Bank of Bikaner & JaipurState Bank of HyderabadState Bank of IndiaState Bank of MysoreState Bank of PatialaSyndicate BankThe Federal Bank Ltd.The Jammu & Kashmir Bank Ltd.The Lakshmi Vilas Bank Ltd.UCO BankUnion Bank of IndiaYes Bank Ltd.

AUDITORS

M. M. Chaturvedi & Co.,Chartered Accountants,24, Atlanta, Nariman Point,Mumbai - 400 021

REGISTRAR & SHARE TRANSFER AGENTS

Data Software Research Company Pvt. Ltd.Unit : Essar Steel India Limited19, Pycrofts Garden Road, Off Haddows Road,Nungambakkam, Chennai - 600 006.Tel. : (044) 2821 3738, 2821 4487Fax : (044) 2821 4636E-mail : [email protected]

Visit us at our website

http://www.essarsteel.com

2 2 39th ANNUAL REPORT 2014-15


Notice to ShareholdersNOTICE is hereby given that the Thirty Ninth Annual General Meeting of the Members of Essar Steel India Limited (CIN: U27100GJ1976FLC013787) will be held at the Registered office of the Company at Utsav Community Hall, Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-394270 on Tuesday, September 29, 2015 at 2:00 p.m. to transact, the following business:

ORDINARY BUSINESS:1. To receive, consider and adopt -

(a) the Audited Financial Statements of the Company for the financial year ended March 31, 2015 together with the Report of the Board of Directors and the Auditors thereon.

(b) the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2015 together with the Report of the Auditors thereon.

2. To appoint a Director in the place of Shri P S Ruia (DIN 01187548) who retires by rotation and being eligible, offers himself for reappointment.

3. To appoint a Director in the place of Shri Rana Som (DIN 00352904) who retires by rotation and being eligible, offers himself for reappointment.

4. To ratify the appointment of Statutory Auditors of the Company and to fix their remuneration and in this regard to consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of Sections 139(1), 142 and other applicable provisions of the Companies Act, 2013 (“Act”) and the Rules framed thereunder, as amended from time to time and pursuant to the resolution passed by the Members at the Annual General Meeting held on November 27, 2014 and pursuant to recommendation of Audit Committee the appointment of M/s. M. M. Chaturvedi & Co., Chartered Accountants, Mumbai (Audit Firm Registration No. 112941W) as the Statutory Auditors of the Company to hold office till the conclusion of Annual General Meeting to be held in the year 2018 be and is hereby ratified and that the Board of Directors be and is hereby authorized to fix the remuneration payable to them for the financial year ending March 31, 2016 as may be determined by Audit Committee in consultation with the Auditors.”

SPECIAL BUSINESS:5. Appointment of Smt Gayathri Sukumar

(DIN 07115908) as Director. To consider and if thought fit, to pass with or without

modifications, the following Resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of Section 149 and 152 and other applicable provisions of the Companies Act, 2013 (“the Act”) read with the Companies ( Appointment and Qualification of Directors) Rules 2014 including any statutory modifications or re-enactment thereof for the time being in force Smt. Gayathri Sukumar, (DIN 07115908), who was appointed as an Additional Director of the Company by the Board of Directors with effect from March 30, 2015 in terms of Section 161(1) of the Act read with Article 82 of the Articles of Association of the Company and who holds office up to the date of this Annual General Meeting and being eligible offer herself for appointment and in respect of whom the Company has received a Notice in writing from a member under Section 160 of the Act proposing her candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

6. Issue of Equity Shares on Preferential basis to promoters upto `1500 Crore

To consider and, if thought fit, to pass with or without modifications, the following resolution as a Special Resolution:-

“RESOLVED THAT in accordance with provisions of Sections 23, 42 and 62 (1) (c) and all other applicable provisions of the Companies Act, 2013 (“the Act”) (including any statutory modifications or re-enactments thereof for the time being in force) read with Companies (Issue of Shares & Securities) Rules, 2014 enabling provisions of the Memorandum and Articles of Association of the Company, Foreign Exchange Management Act, 1999 Rules and Regulations made thereunder and subject to approval, permission or consent, if required, of the concerned authorities whether statutory or not, consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the “Board”, which term shall be deemed to include any duly authorized committee thereof for the time being exercising the powers conferred on the Board by this resolution) to issue and allot in one or more tranche, through one or more offer, on preferential basis such number of equity shares of ` 10/- each for an amount not exceeding `1500 Crore to Essar Steel Asia Holdings Limited, Mauritius / Essar Steel Limited, Mauritius / holding company / any of the chain holding company / ultimate holding company / promoter companies / group or associate companies or any of the promoter(s) considering them as separate class / classes of persons whether they be members of the Company or not on such terms and conditions and at such price as the Board may in its absolute discretion deem fit.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby



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authorized to take such steps as may be necessary for obtaining approvals, statutory, contractual or otherwise, in relation to the above and settle all matters arising out of and incidental thereto and to sign and execute all deeds, applications, documents and writings that may be required, on behalf of the Company and also to delegate all or any of the above powers to any Director of the Company and generally to do all acts, deeds and things as may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid resolution.”

7. RatificationofremunerationoftheCostAuditorsforthefinancialyearendingMarch31,2016

To consider and if thought fit, to pass, with or without modifications the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148(3) and all other applicable provisions of the Companies Act, 2013 (“the Act”) and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification or amendments thereof, for the time being in force), the remuneration of ` 4,00,000 (Rupees Four Lakh only) plus applicable Service Tax thereon and reimbursement of out of pocket expenses, if any, payable to M/s Manubhai & Associates, Cost Accountants (Firm Registration M-2502), as recommended by the Audit Committee and approved by the Board of Directors of the Company for conducting Audit of the Cost Accounting Records of the Company for the financial year from April 01, 2015 till March 31, 2016 or extended financial year as may be decided by the Board, be and is hereby ratified and confirmed.”

“RESOLVED FURTHER THAT the Board of Directors and / or Director (Finance) & CFO of the Company be and are hereby severally authorised to do all acts, deeds and things as may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid resolution.”

8. Renewalofenablingresolutionforconversionofloan into equity in case of default in repayment of loan

To consider and if thought fit, to pass, with or without modifications the following resolution as a Special Resolution:

“RESOLVED THAT in accordance with provisions of Section 62(1)(c) and Section 62(3) of the Companies Act, 2013 as amended from time to time and all other applicable provisions of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force), enabling provisions of the Memorandum and Articles of Association of the Company, subject to approval, permission or consent, if required, of the concerned authorities whether statutory or not, as per the terms and conditions contained in the financing documents

executed with ICICI Bank Ltd, inter alia, with an option to ICICI Bank Ltd to convert the whole or part of the defaulted amount of the loan of the Company, consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the “Board”, which term shall be deemed to include any duly authorized committee thereof for the time being exercising the powers conferred on the Board by this resolution) to issue and allot in one or more installments, on preferential basis such number of equity shares of `10/- each to ICICI Bank Limited by converting defaulted loan amount into fully paid up equity shares of the Company (subject to maximum of `600 crores) at par or in accordance with Applicable law and in the manner specified in a notice in writing to be given by ICICI Bank Ltd (“Lender”) to the Company (hereinafter referred to as the “NoticeofConversion”) and in accordance with the following conditions:

(i) The conversion right reserved as aforesaid may be exercised by the Lender on one or more occasions during the currency of the Loan if the Company commits a default in payment of interest or repayment of any two consecutive installments of the loan or interest thereon or any combination thereof.

(ii) On receipt of the Notice of Conversion, the Company shall allot and issue the requisite number of fully paid-up equity shares to the Lender as from the date of conversion and the Lender shall accept the same in satisfaction of the part of the defaulted amount of Loan so converted;

(iii) The part of the Loan so converted shall cease to carry interest as from the date of conversion and the Loan shall stand correspondingly reduced.

(iv) Upon such conversion, the repayment installments payable after the date of conversion as per the Finance Documents shall stand reduced proportionately by the amounts of the Loan so converted;

(v) The equity shares so allotted and issued to the Lender shall carry, from the date of conversion, the right to receive proportionately the dividends and other distributions declared or to be declared in respect of the equity capital of the Company, and

(vi) Save as aforesaid, the said shares shall rank pari passu with the existing equity shares of the Company in all respects. The Company shall, at all times, maintain sufficient un-issued equity shares for the above purpose.

“RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to accept such modifications and to accept such terms and



conditions as may be imposed or required by the Lender arising from or incidental to the aforesaid terms providing for such option and to do all such acts and things as may be necessary to give effect to the above resolution.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorized to take such steps as may be necessary for obtaining approvals, statutory, contractual or otherwise, in relation to the above and settle all matters arising out of and incidental thereto and to sign and execute all deeds, applications, documents and writings that may be required, on behalf of the Company and also to delegate all or any of the above powers to any Director of the Company and generally to do all acts, deeds and things as may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid resolution.”

9. Powertomakedonationtobonafidecharitableand other funds

To consider and, if thought fit, to pass with or without modification, the following resolution as a Special Resolution:-

“RESOLVED THAT in supersession of the Resolution passed at the Annual General Meeting of the Company held on October 20, 2012 and pursuant to the provisions of Section 181 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modifications or re-enactment thereof, for the time being in force) (“Act”) the Board of Directors of the Company be and is hereby authorized to contribute, in any financial year, to bona fide charitable and other funds, any amounts the aggregate of which, shall not exceed ` 5 Crore or five per cent of average net profits of the Company (calculated as per the provisions of the Act) for the three immediately preceding financial years.”

“RESOLVED FURTHER THAT the Board of Directors be and are further authorised to delegate its power to make donation to any committee of directors or any of its Directors as it deem fit in the best interest of the Company.”

By Order of the Board of DirectorsFor Essar Steel India Limited

MahadevIyerDirector (Finance) & CFO

DIN No : 01871295 Place : MumbaiDate : 26th August, 2015

NOTES:1. AMEMBERENTITLEDTOATTENDANDVOTEAT

THEMEETING IS ENTITLED TOAPPOINT ONEORMOREPROXIESTOATTENDANDTOVOTEINSTEADOFHIMSELFANDAPROXY(IES)NEEDNOTBEAMEMBEROFTHECOMPANY.

2. Proxy forms, in order to be valid, should be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for the meeting.

A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

3. The Register of Members and Share Transfer Books of the Company will remain closed from September 21, 2015 to September 29, 2015 (both days inclusive).

4. The business set out in the Notice will be transacted through electronic voting system and the Company is providing facility for voting by electronic means. Instructions and other information relating to e-voting are given in this Notice under Note No.12. The Company will also send communication relating to remote e-voting which inter alia would contain details about User ID and password along with a copy of this Notice to the members, separately.

5. Corporate members intending to send their authorised representatives to attend the Meeting are requested to send to the Company a certified true copy of the Board Resolution authorising their representative to attend and vote on their behalf at the Meeting.

6. A Statement pursuant to Section 102(1) of the Companies Act, 2013, relating to the Special Business to be transacted at the Meeting is annexed hereto.

7. Members holding shares in physical form are requested to notify / send the following to Company’s R & T Agents, Data Software Research Co. Pvt. Ltd., 19, Pycrofts Garden Road, Off Haddows Road, Nungambakkam, Chennai-600006 to facilitate better servicing:-

a) any change in their address / mandate / bank details / e-mail address,

b) particulars of their bank account, in case the same have not been furnished earlier, and

c) share certificates held in multiple accounts in identical names or joint accounts in the same order of names, for consolidation of such shareholdings into a single account.

8. All documents referred to in the accompanying notice and explanatory statement thereto are open for



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inspection at the Registered Office of the Company on all working days between 11.00 a.m. and 1.00 p.m. upto the date of the Annual General Meeting.

9. Members / Proxies should bring the Attendance Slip duly filed in for attending the meeting.

10. Members may please note that for transfer / transmission / transposition of shares in physical form, furnishing copy of PAN Card is mandatory.

11. Members holding shares in physical form are requested to convert their shares into dematerialized form in their own interest and convenience purpose.

12. Votingthroughelectronicmeans i) In compliance with the provisions of Section

108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended by the Companies (Management and Administration) Amendment Rules, 2015, the Company is pleased to provide to the Members a facility to exercise their right to vote on resolutions proposed to be considered at the 39th Annual General Meeting (AGM) by electronic means through e-Voting Services. The facility of casting votes by the Members using an electronic voting system from a place other than venue of the AGM (‘remote e-voting’) will be provided by M/s.Central Depository Services (India) Limited (CDSL).

ii) The facility for voting through ballot paper shall be made available at the AGM and the Members attending the meeting, who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through Ballot Paper.

iii) The Members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM, but shall not be entitled to cast their vote again.

iv) The remote e-voting period commences on 25th September, 2015 (9:00 am) and ends on 27th September, 2015 (5:00 pm). During this period Members’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 22nd September, 2015, may cast their vote by remote e-voting. The remote e-voting module shall be disabled by CDSL for voting thereafter. Once the vote on a resolution is cast by the Member, the Member shall not be allowed to change it subsequently.

v) The process and manner for remote e-voting is as under:

A. When a Member receives an email from CDSL [for Members whose email IDs are registered with the Company / RTA / Depository Participant/s]:

(i) Open email and open PDF file viz. ‘Essar remote e-voting.pdf’ with your Client ID or Folio No. as password. The said PDF file contains your user ID and password / PIN for remote e-voting. Please note that this password is an initial password.

(ii) Launch internet browser by typing the following URL: https://www.evoting.cdsl.com/

(iii) Click on Shareholder - Login (iv) Put User ID and password, as

initial password / PIN noted in step (i) above and click ‘Login’

(v) “Password change menu” will appear. Change the password / PIN with new password of your choice with minimum 8 digits/characters or combination thereof. Note new password. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(vi) Home page of remote e-voting opens. Click on remote e-voting: Active Voting Cycles.

(vii) Select ‘EVEN’ of ‘ESSAR STEEL INDIA LIMITED’.

(viii) Now you are ready for remote e-voting as “Cast Vote” page opens.

(ix) Cast your vote by selecting appropriate option and click on ‘Submit’ and also ‘Confirm’ when prompted.

(x) Upon confirmation, the message ‘Vote cast successfully’ will be displayed.

(xi) Once you have voted on the resolution, you will not be allowed to modify your vote.

(xii) Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution / Authority letter etc. together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected] with a copy marked to [email protected]



B. In case a Member receives physical copy of the Notice of AGM [for members whose email IDs are not registered with the Company / RTA / Depository Participant/s or requesting physical copy]:

(i) Initial password is provided as below at the bottom of the Attendance Slip of the AGM:

EVEN (Remote e-voting Event Number) USER ID PASSWORD / PIN

(ii) Please follow all steps from Sl. No. (ii) to Sl. No. (xii) above, to cast vote.

vi) In case of any queries, you may refer Frequently Asked Questions (FAQs) for Members and remote e-voting user manual for the Members available at the ‘downloads section’ of www.evotingindia.com or call on toll free no.: 1800-200-5533.

vii) If you are already registered with CDSL for remote e-voting, then you can use your existing User ID and password / PIN for casting your vote.

viii) You can also update your mobile number and email ID in the user profile details of the Folio which may be used for sending future communication(s).

ix) The voting rights of Members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date of 22nd September, 2015.

x) Any person, who acquires shares of the Company and becomes Member of the Company after dispatch of the notice and holding shares as of the cut-off date i.e. 22nd September, 2015, may obtain the login ID and password by sending a request at [email protected] or to the Issuer at [email protected]. However, if you are already registered with CDSL for remote e-voting then you can use your existing user ID and password for casting your vote. If you forget your password, then you can reset your password by using ‘Forgot User Details/Password’ option available on www.evoting.cdsl.com or contact CDSL at its toll free no.: 1800-200-5533.

xi) A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the AGM.

xii) A person, whose name is recorded in the Register of Members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper.

xiii) Ms. Uma Lodha, Practicing Company Secretary, has been appointed as Scrutinizer to scrutinize the voting and remote e-voting process in a fair & transparent manner.

xiv) The Chairman shall, at the AGM, at the end of discussion on the resolutions on which the voting is to be held, allow voting with the assistance of scrutinizer, by use of ‘Ballot Paper’ for all those Members who are present at the AGM but have not cast their votes by availing the “remote e-voting” facility.

xv) The Scrutinizer shall, after the conclusion of voting at the general meeting, first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses, not in the employment of the Company and shall submit, not later than three days of the conclusion of the AGM, a Consolidated Scrutinizer’s Report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him / her in writing, who shall countersign the same and declare the result of the voting forthwith.

xvi) The Results declared along with the report of the Scrutinizer shall be placed on the website of the Company, viz. www.essarsteel.com.

ANNEXURETOTHENOTICE EXPLANATORYSTATEMENTPURSUANTTOSECTION102OFTHECOMPANIESACT,2013

Item No. 5

Smt. Gayathri Sukumar (DIN 07115908) was appointed as an Additional Director (Woman Director) with effect from March 30, 2015. In terms of Section 161 of the Companies Act, 2013 (“the Act”) she holds office upto the date of this Annual General Meeting. The Company has received requisite notice from a member under Section 160 of the Act proposing her candidature to the office of Director.

Smt. Gayathri Sukumar joined the Essar Group in November, 2009 as Group Head, Direct Taxes. In this role, she managed a corporate team that handled tax matters for six businesses and multiple tax jurisdictions in the areas of tax strategies and planning, transactions and structuring, transfer pricing, litigation and day to day advisory, besides driving tax related systems and process improvements. Currently, she serves as Senior Vice President and Head,



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Direct and Indirect Taxes and Regulatory, for the Energy Business.

Currently appointed as Director on board with various companies. Smt. Gayathri carries with her 27 years of post-qualification experience and prior to joining the corporate domain, her career was in the area of consultancy services. Immediately prior to joining Essar, she was Partner, Tax and Regulatory services at Grant Thornton, and before that, she worked with KPMG and A.F. Ferguson & Co. She has serviced various clients belonging to a spectrum of industries in challenging assignments in the areas of domestic and international tax, inbound and outbound investments, Joint Ventures, Transfer Pricing, and Litigation support. She identified opportunities and led initiatives in the areas of Transfer Pricing, Special Economic Zones and Education sectors.

Smt. Gayathri has been a speaker at various tax based conferences, and presently, is a member of the Direct Tax committees of CII, Indian Merchants’ Chambers, ICAI, and FICCI and has been involved in making representations to the Government on various proposed legislations and the annual budget exercise, besides to the OECD on the recent slew of anti-tax avoidance measures proposed by them.

Smt. Gayathri is a Commerce graduate and a Fellow of the Institute of Chartered Accountants of India. Smt. Gayathri holds directorship in 9 other public companies. The Board recommends the resolution for appointment of Smt. Gayathri Sukumar as a Director of the Company as set out at Item no. 5 of the Notice for your approval.

Except for Smt. Gayathri Sukumar none of the Directors or Key Managerial Personnel of the Company or their relatives are in any way, financially or otherwise, concerned or interested in the aforesaid Resolution.

Item No. 6

In order to meet capital expenditure and operational requirements and to further strengthen its capital base by issue of new equity shares and as per the sanctioned terms of Working Capital facilities by Banks / FIs it was resolved at the last Annual General Meeting (AGM) of the Company held on November 27, 2014 to issue and allot equity shares to holding Companies and other Group Companies upto ` 2400 crore. In terms of the authority granted by the said resolution, since last AGM an amount of `1283.71 Crore have been infused by promoter entities and against that allotment of 28,40,06,308 equity shares was made. As per Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014, resolution passed under Section 62 (1) (c) of the Cos Act, 2013 has to be acted upon within a period of 12 months from the passing of such resolution.

In terms of said Rule the validity of the resolution passed at last Annual General Meeting shall expire on November 26, 2015.

In order to raise balance funds and to meet further fund requirements, enabling resolution is required as proposed at Item No. 6 of the Notice. Statutory information required to be disclosed in respect of proposed resolution are given hereunder.

The Information as required under Section 42, Section 62 read with Companies (Prospectus and Allotment of Securities Rules 2014 and Companies (Share Capital and Debentures) Rules 2014 for Preferential Issues/private placement are as under:

i. The objects of the issue: To mobilize funds for funding current and future expansion plans / activities undertaken directly by the Company or through its subsidiaries / joint venture companies, working capital, repayment of loans and interest thereon, improve liquidity and for general corporate purposes.

ii. The total number of shares or other securities to be issued: Based on the valuation report, the Company will issue such number of equity shares the face value and premium of which will aggregate to ` 1500 Crore.

iii. The price or price band at/within which the allotment is proposed including basis or justification of the price (including premium, if any): The price of ̀ 43.06 per equity share is arrived based on valuation report obtained.

iv. Basis on which the price has been arrived at along with report of the registered valuer: Valuation report obtained from M/s. Nisar Kumar & Co., Chartered Accountants will be available for inspection at the registered office of the Company during business hours till the date of Annual General Meeting.

v. Relevant date with reference to which the price has been arrived at: The price of the shares has been arrived at considering August 26, 2015 as relevant date.

vi. The class or classes of persons to whom the allotment is proposed to be made: The allotment is proposed to be made to any one or more of Essar Steel Asia Holdings Limited, Mauritius, Essar Steel Limited, Mauritius, any other holding company, any of the chain holding company, ultimate holding company, promoter companies, group or associate companies or any of the promoter(s) considering them as separate class of persons.

vii. Intention of promoters, directors or key managerial personnel to subscribe to the offer: The entire issue is proposed to be subscribed by promoters or affiliate of promoters.

ANNEXURE TO NOTICE



viii. The proposed time within which the allotment shall be completed: The allotment will be completed within the period permitted under the Companies Act, 2013 and rules made thereunder being 60 days from the date of receipt of share application money for each tranches.

ix. The names of the proposed allottees and the percentage of post preferential offer capital that may be held by them;

Names of the proposed allottees Percentagepostallotment

Essar Steel Asia Holdings Limited and other Promoter Group entities

97.74%

x. The change in control, if any, in the company that would occur consequent to the preferential offer: There will not be any change in the management control of the Company on account of this proposed preferential allotment except minor change in the shareholding pattern as well as voting rights. The

promoter entities are holding 97.54% in total share capital.

xi. The number of persons to whom allotment on preferential basis have already been made during the year, in terms of number of securities as well as price:

Name of the EntityNo. of

Shares Allotted

Price per share

includingpremium

Essar Steel Asia Holdings Ltd 2,20,59,406 45.20Imperial Consultants & Securities Pvt Ltd

21,76,99,115 45.20

Tirunelveli Wind farms Ltd 4,42,47,787 45.20Total 28,40,06,308

xii. The justification for the allotment proposed to be made for consideration other than cash together with valuation report of the registered valuer: N.A.

xiii. Shareholding Pattern before and after the issue of shares involved in the present resolution is as below:

Sr. No. Category

Pre Issue Post IssueNo. of shares

held% of

shareholdingNo. of shares

held% of

shareholdingA PromotersHolding1 Indian

Individual Bodies Corporate 303,23,67,789 97.54 331,10,48,699 97.74

2 ForeignPromoters Sub Total (A) 303,23,67,789 97.54 331,10,48,699 97.74

B NonPromotersHolding 1. InstitutionalInvestors 934,491 0.03 934,491 0.032. Non-Institution :

Private Corporate Bodies 53,48,434 0.17 53,48,434 0.16Directors and Relatives - - Indian Public 682,50,331 2.19 682,50,331 2.01Others (Including NRIs) 20,56,615 0.07 20,56,615 0.06Sub Total(B) 765,89,871 2.46 765,89,871 2.26GRAND TOTAL 310,89,57,660 100 331,10,48,699 100

Section 62 of the Companies Act, 2013 provides inter alia, that when it is proposed to increase the issued capital of a Company by allotment of further shares, etc., such further shares shall be offered to the existing shareholders of the Company in the manner laid down in the Section unless the shareholders in general meeting decide otherwise by passing a special resolution. Therefore, consent of the shareholders by way of Special Resolution is being sought pursuant to the provisions of Sections 42 & 62 and all other applicable provisions of the Companies Act, 2013 and rules made thereunder.

The members are, therefore, requested to accord their approval authorizing the Board to issue Equity shares on private placement / on preferential basis as set out in the resolution.

Your Directors recommends passing of a Special Resolution as proposed at Item No. 6 of the Notice.

None of the Directors, Key Managerial Personnel or their relatives is in any way concerned or interested, financially or otherwise in this resolution. The promoters of the Company shall be considered as interested to the extent of Equity Shares offered to them and allotted to them.



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Item No. 7

Based on the recommendation of the Audit Committee, the Board of Directors of the Company at their meeting held on August 13, 2015 re-appointed M/s Manubhai & Associates, Cost Accountants, as the Cost Auditors of the Company to carry out cost audit pertaining to Steel Business of the Company for the year ending March 31, 2016 at a remuneration of ` 4,00,000 plus applicable service tax and reimbursement of out of pocket expenses. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the provisions of Rule 14 of Companies (Audit and Auditors) Rules 2014, the remuneration payable to the Cost Auditors requires ratification by the shareholders.

Accordingly, approval of the members is sought for passing an Ordinary Resolution for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2016.

Your Directors recommends passing of an Ordinary Resolution as proposed at Item No.7 of the Notice.

None of the Directors, Promoters, Key Management Personnel of the Company, or their relatives are, in any way, financially or otherwise, concerned or interested in this resolution.

Item No. 8

The Company had availed term loan facilities from ICICI Bank Ltd for meeting its project and other expenditure. As per the terms and conditions of financial facilities availed by the Company from ICICI Bank Limited, ICICI Bank has the right to convert defaulted amount of loan into fully paid up equity shares of the Company. The Company has executed an undertaking, whereby it is required to pass every year, an enabling resolution for conversion of loan in to equity and allotment of shares on preferential basis. It would thus be necessary to obtain approval of the Members of the Company in terms of Section 62(3) of the Companies Act, 2013 for conversion of debt into equity in case of default of repayment of debt by the Company.

As per Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014, resolution passed under Section 62 (1) (c) of the Companies Act, 2013 has to be acted upon within a period of 12 months from the passing of such resolution. The price of allotment shall not be less than fair value of share. Considering the fact that this is an enabling resolution which may be acted only on occurrence of event of default and exercise of option by the Bank, valuation of shares, number of shares which may be allotted, pre and post allotment shareholding pattern and other details required to be disclosed under such rules cannot be ascertained.

The Directors recommends the Special resolution proposed at Item No. 8 for your approval under Section 62(1) (c) and 62(3) of the Companies Act 2013.

None of the Directors, Promoters, Key Managerial Personnel or their relatives are in any way concerned or interested, financially or otherwise in this resolution.

Item No. 9:

Under Section 181 of the Act, the Board of Directors of the Company is authorized to make contributions to charitable and other funds provided that prior permission of the members is required for such contributions during a financial year exceeding five percent of its average net profits during the three immediately preceding financial years. The members had, at the Annual General Meeting held on October 20, 2012, passed a Resolution u/s 293 (1) (e) of the Companies Act, 1956 for making donations for an amount upto ` 5 crores or five percent of the Company’s average net profits (determined in accordance with the provisions of Sections 198 of the Companies Act, 2013) during the three immediately preceding financial years but not exceeding ` 5 crore whichever is greater in a financial year.

With the implementation of the new Companies Act, 2013, the management proposes to re-sought the approval of the Members under the new provisions of the Companies Act 2013 i.e. Section 181 (corresponding to Section 293(1)(e) of the Companies Act, 1956) authorizing the Board of Directors of the Company to make contributions to bona fide charitable and other funds, and / or contribution to political parties in a financial year for an amount not exceeding ` 5 crore or five percent of the Company’s average net profits during the three immediately preceding financial years whichever is greater.

The Directors recommend the Resolution at Item No. 9 of the accompanying Notice for the approval of the Members of the Company.

None of the Directors, Promoters, Key Management Personnel of the Company, or their relatives are, in any way, financially or otherwise, concerned or interested in this resolution.

By Order of the Board of Directors

Place : MumbaiDate : 26th August 2015

For Essar Steel India Limited

MahadevIyerDirector (Finance) & CFO

DIN No : 01871295



To,The Members of Essar Steel India Limited

Your Directors have pleasure in presenting the 39th Annual Report of your Company together with the Audited Statement of Accounts for the year ended 31st March, 2015.

1. FINANCIAL STATEMENTS & RESULTS

a. Financial Results (` in Crore)

Particulars Standalone ConsolidatedFY 2014-15 FY 2013-14 FY 2014-15 FY 2013-14

Gross Revenue 19,258.50 16,286.59 20,368.68 18,295.03 Less: Revenue from Trial Run Operations 2,096.11 1,938.04 2,096.11 1,938.04 Net Revenue 17,162.39 14,348.55 18,272.57 16,356.99 Expenses 11,772.90 12,480.12 12,576.70 13,161.34 Profit before Finance Costs, Exchange Variation and Derivative Losses, Depreciation /Amortisation, Exceptional/Prior Period Items and Tax

5,389.49 1,868.43 5,695.87 3,195.65

Less: Finance Cost 3,865.01 4,176.70 4,257.29 4,580.11 Less: Exchange variation and Derivative Losses (net) 382.44 540.56 365.68 510.87 Less: Depreciation / Amortization 807.75 1,067.38 911.57 1,199.65 Profit /(Loss) before Exceptional Items and Taxation 334.29 (3,916.21) 161.33 (3,094.98)Add: Reversal of Depreciation Provision 586.68 - 586.68 - Add: Exceptional / Prior period items 87.99 1,601.47 87.99 1,601.47 Profit /(Loss) before Taxation 1,008.96 (2,314.74) 836.00 (1,493.51)Add: Current tax - - - (34.57)Add: Excess Provision of Earlier Years (Net) 16.87 - 16.87 5.73 Add: Deferred Tax Credit/(Charge) (377.78) 717.60 (377.78) 717.60 Add: Share in Profit / (Loss) of Associates (Net) - - (8.56) (249.92)Profit /(Loss) after taxation 648.05 (1,597.14) 466.53 (1,054.67)Add: Balance brought forward from previous year (3,925.28) (2,328.14) (6,838.43) (5,783.76)Add : Balance value of assets transfer from Assets as per Companies Act, 2013 (Net of deferred tax)

(34.60) - (34.60) -

Add: Transfer from Revaluation Reserve 161.54 - 161.54 - Balance carried forward to next year (3,150.29) (3,925.28) (6,244.96) (6,838.43)

BOARD’S REPORT

b. Operations

GLOBAL SCENARIO

Global economy grew 3.4 percent, reflecting a pick-up in growth in advanced economies relative to the previous year but a slowdown in emerging markets and developing economies. Despite the slowdown, emerging markets and developing economies still accounted for three-fourths of global growth in 2014.

1.2

3.4 3.4 3.5

5.1 54.6 4.3

0

1

2

3

4

5

6

2012 2013 2014 2015(f)

World GDP (% Change)

Advanced Economies Emerging Markets & Developing Economies

Growth in United States was 2.4 percent driven by steady job creation and income growth, lower oil prices and improved consumer confidence. Growth in Japan was -0.1percent reflecting weak consumption and plummeting residential investment. The EU area revived in 2014 to 0.9 percent from -0.5 percent in 2013 with consumption supported by low oil prices and higher net exports.

INDIAN SCENARIO

The GDP for Q4-FY15 showed a rebound in growth compared to previous quarter on the back of improved manufacturing and mining sectors as well as trade. Investment demand showed definite signs of improvement in Q4 over Q3 and signals towards positive growth. The improved Private Final Consumption Expenditure (PFCE) rising from 6.2% in FY2014 to 6.3% in FY2015 which is seen as encouraging and indicates recovering consumer confidence.



11

India GDP % Growth

6.7

8.4

6.67.5 7.3

0123456789

Q1-FY15 Q2-FY15 Q3-FY15 Q4-FY15 FY15

The GDP grew 7.3 percent in FY2014-15. The sectors which registered above 7% growth rates were services, trade, utilities, defence and manufacturing. Mining & Quarrying

registered a growth of 4.8% during the year. Agriculture recorded a marginal growth of 0.2 percent in FY2015.

STEEL INDUSTRY

GlobalOverview

Global steel demand increased by 0.6 percent in 2014. Demand in China, after registering strong positive growths for many years, declined by 3.3 percent in 2014 following deceleration in its economy. But the strong steel consumption in USA supported by the growth in its economy, low fuel prices and employment growth propped the global steel growth. Steel consumption growth in India was a modest 2.2 percent in 2014.

Global crude steel production grew 0.4 percent during 2014. China, the main driver of steel growth, was negative at -0.5 percent.

CrudeSteelProduction(Mt) Consumption(Mt)

2013 2014 Growth % 2013 2014 2015 (e) 2014 (13%) 2015 (14%)World 1649 1655 0.36% 1528.4 1537.3 1544.4 0.6% 0.5%China 827 822.7 -0.52% 735.1 710.8 707.2 -3.3% -0.5%India 81.3 86.5 6.40% 73.7 75.3 80 2.2% 6.2%Japan 110.6 110.7 0.09% 65.2 67.5 65.9 3.5% -2.4%USA 86.9 88.2 1.50% 95.7 106.9 106.5 11.7% -0.4%S. Korea 66.1 71.5 8.17% 51.8 55.4 56.9 6.9% 2.7%EU 157.6 157.8 0.13% 146.8 149.9 154.1 2.1% 2.8%

Source: World Steel Association – Steel Statistical Yearbook 2015

The outlook for global steel demand in 2015 is anticipated to be restrained mainly due to deceleration in China. A positive sign for 2015 is that the impact of risks due to geopolitical instability, internal capital flow volatility and the economic slowdown in China has come down. Recovery momentum is expected to be firm in developed economies. Increased optimism is seen about growth in India while demand growth is also seen to be positive in MENA and ASEAN countries.

DomesticOverviewIndia emerged as the 4th largest producer of steel in the world in the year 2014 and is expected to become the 3rd largest steel producer in year 2016. By year 2018, it is expected to be the 2nd largest producer of crude steel in the world. India is considered one of the most attractive location for steel production due to rich iron ore resources with average iron content in excess of 60% (Hematite) and access to educated and skilled labour at comparatively low costs. These advantages with low per capita steel consumption of about 59.4 kg per capita in 2014 compared to world average of 216.6 kg provides tremendous potential for growth in consumption of steel in the country. The Make in India initiative by the government aimed at raising the share of manufacturing in GDP from the present 16 percent to 25 percent is anticipated to boost demand for steel in the country. As per Ministry of Steel estimates, the Iron and

Steel Industry contributes around 2% to the GDP and its weight in the Index of Industrial Production is 6.2%.

SALESANDMARKETING

The year 2014 was a challenging year for the steel industry. China, the major producer and consumer of steel saw its economic growth decelerate to 7.4%, the slowest in a decade. Its domestic steel consumption declined. Steel exports from China jumped by 59% to 82.1Mt in 2014 impacting prices in the international markets including India. The decline in iron ore and crude oil prices to unprecedented levels and the strengthening of US Dollar against most currencies added further to the decline in steel prices.

India’s import of steel products during FY 2015 rose sharply to 9.3Mt from 5.5Mt in FY 2014 putting pressure on domestic steel prices. Despite these unfavourable conditions, your company was able to retain its market share by focusing on freight-favourable regions, product mix and sale of value added products.

The sales volume stood at 3.31Million tonnes, marginally up by 2% compared to 3.24Million tonnes in the previous year. Total domestic sales stood at 2.76Million tonnes and exports at 0.56 Million tonnes. The share of value added steel increased to 62 percent in FY 2015 from 50 percent in FY 2014 with thrust on sale of downstream and plate mill products.



Your company remained committed towards its customers in FY 2015. Several initiatives were successfully executed by your company during the year. Some of these are:

• Increase in sales and revenue through geography & segment focus and through sale of value added products. In domestic sector, 80% of sales was focused in Gujarat and West region, while in Exports, 55% sales was in Middle East including Persian Gulf. The focus on value added sale resulted in increased sale of value added products from 50% to 62% during FY 2015.

• Long term contracts with key customers.

• Global Supplier Status from reputed customer for developing and commercializing high strength steel (IS 550 MC and IS 700 MC) for yellow goods applications.

• Partnership with car manufacturer for the development and commercialization of automobile grade steel products.

• In-house development of import substitution products such as medium carbon and high carbon

cold rolled steel which resulted in saving of valuable foreign exchange for the country. Your company is the only integrated steel mill in India to develop and commercialize medium carbon / high carbon (C-60E) steel grades for IFB for seat belt tongue which is a safety critical application for passenger vehicles.

• Successful development of cutting edge hollow stabilizer bars made from boron treated steel through tripartite collaborative efforts with ASPI and SOGEFI Italy for Automotive segment.

• Your company undertook Customer Satisfaction (CSAT) Surveys in November 2014 and in April 2015. The CSAT surveys were aimed at identifying opportunities for improvement leading towards excellence. The parameters on which customer satisfaction was measured included Product portfolio, Quality, Cost, Delivery, New Product Development and Customer Engagement. Your company showed improvements in 5 out of 6 parameters and maintained consistency in the remaining parameter. Your company received the higher ratings in Product portfolio, Quality and Customer Engagement parameters.

Sales Trend Channel Wise:

60%54%

58% 57%65%

16%

25% 22%27%

17%24% 21% 20%

16% 18%

FY2010-11 FY2011-12 FY2012-13 FY2013-14 FY2014-15

% Sales Turnover

Domestic Export Retail

The prices in the international markets remained volatile and fragile driven by slowdown in Chinese domestic steel consumption, rise in steel exports from China and depreciation of currencies of major steel producer and exporter countries. The reduced exports from your company was compensated by improved sales in the domestic sector.



13

RegionWiseExportsSales

Region Wise Export Sales - FY2014

6%14%

25%21%

34%

Middle East NAFTA ASEAN Europe Africa

Region Wise Export Sales - FY2015

Middle East NAFTA ASEAN Europe Africa

3

55

18

9

15

Despite stiff competition and challenging environment, your company improved its exports in the Middle East&European Union region. Lower exports in other regions was a result of low demand, price sensitivity, currency depreciation of major steel exporter countries and stiff competition from China and Russia.

RegionwiseDomesticSales:Region wise Domes�c Sales

73%

14% 12%

1%

69%

18%13%

1%

77%

11% 11%1%0%

10%20%30%40%50%60%70%80%90%

West North South East

2012-13 2013-14 2014-15

The Company’s domestic strategy of consolidation in West continued in 2014-15. A stable presence was maintained in South while consciously maintaining a focused customer sales in North.

OPERATIONS

During the year, your company produced 3.13 million tons of liquid steel and achieved sales of 3.31 million tons. There were productivity losses due to 400KV line insulator failures and planned outage in July. Working capital constraints, restricting volume and resulting high cost operation also caused some loss of production. Non-availability of APM gas as per ABP assumption and further reduction in allocation in Q2 has a negative impact on EBIDTA.

In order to improve margins, Company focused on value added grades, newly developed products and high capacity utilization of sinter plant and blast furnace to lower the blended iron making cost.

Keyhighlightsoftheyearwere–

Operations at both Odisha and Vizag Slurry Pipeline have been stabilized

Resolution of power availability at Hazira due to Gas shortage

Connectivity to national Grid established through a 400 KV Transmission Line

Progress on Coal based 300 MW Power plant at Hazira.

Sinter and Blast Furnaces operating at over 100% capacity utilisation

Healthy order book for Plate mill for the next two years

26% of sales from products developed in-house during the last three years including products developed for defence and extra-large diameter pipes.

Pipe mill received accreditation from Abu Dhabi Company of Oil Operations, GE and Petro jet, approval from GSPL for HSAW Pipes and Indian Boiler Regulation.

World’s Best HSE Performance Year 2013.

Zero Fatality with lowest Lost Time Injury Frequency Rate (LTI FR) of 0.18, which is 89% lower Global Steel Sector.

Awards and Accolades

Your company received the following awards during the year:



Sr. AWARD TITLE CATEGORY AWARDED BY YEAR1 Ispat Suraksha Puraskar No Fatal Accident during the Calendar Year –

2013 & 2014 in four Zones of Integrated Steel Plant.1. Coal, Coke & Chemical2. Blast Furnaces, Slag Granulation

Plant, Sinter Plants & Raw Material Department

3. Steel Melting Shops, Continuous Casting Shops

4. Centralized Maintenance, Utilities, Services, Rail & Road Traffic.

Joint Committee on Safety, Health &Environment in Steel Industry (JCSSI)-SAIL

2015

2 World Steel Recognition Outstanding Health & Safety performance at World level.

World Steel Association 2014

3 Excellence in Safety Manufacturing Today Awards 2012, Runner up

Large Enterprises Manufacturing Today Magazine 2014

4 Safety Honor & Merit Certificate for Essar steel India Ltd.

Outstanding Health & Safety performance Gujarat Safety Council in association with Directorate of Industrial Safety & Health, Govt. of Gujarat

2014

5 GHKC – GreEnv Competition 2014

Metal & Steel sector for outstanding achievement in Environment management

Baroda Productivity Council (BPC)

2014

6 Ispat Suraksha Puraskar No Fatal Accident during the Calendar Year - 2013 in Integrated Steel Plant

Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI)-SAIL

2014

7 Ispat Suraksha Puraskar No Fatal Accident during the Calendar Year – 2012 & 2013 in three Zones of Integrated Steel Plant.a. Coal, Coke & Chemicalb. Steel Melting Shops, Continuous

Casting Shopsc. Rolling Mill

Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI)-SAIL

2014

FINANCE

During the Financial year under review, the company focused on :a) Completing the transaction for raising long term

loans for strengthening net working capital and meeting residual capex.

b) Raising long term Export Advances and using proceeds to replace Rupee Term loans with a view to reduce interest by utilizing its foreign exchange denominated/ linked earnings.

c) Monetization of the Odisha Slurry pipeline.d) Tying up and drawal of enhanced working capital

facilities to facilitate ramp up of operations.

The Company has successfully tied-up, from its consortium of lenders, the Rupee Term loans facility of ` 6,000 crs for shoring up the net working capital and meeting the residual capex requirement, undertaken in the previous year.

During the year, the Company has made good progress in its plan to convert its Rupee Term debt into US Dollar liability. The Company has raised Long Term Export Advance of appx. USD 1.2 billion based on Export Performance Bank

Guarantees issued by its lenders and used the export advance for repayment of its Rupee Term loans, based on approval received from the Reserve Bank of India. This, coupled with the External Commercial Borrowings/ Foreign Currency Loans availed by the Company during the last couple of years, has enabled the Company to convert approx. 50% of its term debt into USD liability and assisted in reducing finance cost by utilizing its foreign exchange denominated/ linked earnings.

The Company is availing working capital facilities from a consortium of banks led by State Bank of India. During FY15, the Company approached the consortium of lenders to appraise the working capital requirements of the Company for ramp up of operations. Accordingly, SBI and the members have approved an enhancement of working capital limits of ` 3,825 Crores. The Company has now received most of the sanctions from the Banks for the enhanced limits and the limits are being drawn to support the Company’s operations. The limits are being availed in stages as per the ramp up plan. The Company has also taken several steps to reduce its working capital interest costs by appropriate structuring and the mix of the facilities availed from banks.



15

As part of the plan for monetization of “identified assets” approved by the lenders during the previous year, the Company has during FY15, entered into a Business Transfer Agreement for sale of 12 MTPA Odisha Slurry Pipeline based on independent valuation.

The Company has also drawn up a comprehensive action plan for further strengthening its financials by way of (i) Flexible Structuring of Term Loans over the economic life of the assets, which is permitted based on circular of the Reserve Bank of India of December 14, 2014 (ii) ramp up of operation by draw-down of working capital limits and (iii) Monetisation of identified assets.

Your Company is availing working capital facilities from a consortium of 12 Banks lead by State Bank of India. During the previous financial year, the Company approached the lead Bank as well as the other members to appraise the working capital requirements of the Company based on the increased volume of production and sales. Accordingly, SBI and the members have approved enhanced working capital limits of `12000 crores based on projected Net Sales. The Company has received sanctions from the Banks for the enhanced limits and the limits are being drawn to support the Company’s fund requirements. The limits will be availed in stages as per the ramp up plan. Prior to this, the company’s working capital limits were assessed at ` 8,000 Crores.

Further, with a view to reduce its working capital interest costs, the Company availed working capital funds from Bank at low interest costs in the form of Export advances backed by Standby Letters of Credit, Export Packing Credit / Packing Credit in Foreign Currency, buyers credit to finance its imports, usance LCs for Imports.

c. REPORTONPERFORMANCEOFSUBSIDIARIES,ASSOCIATESANDJOINTVENTURECOMPANIES

The performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended 31st March 2015 is attached and marked as Annexure-I and forms part of this Report.

Details of companies which have become or ceased as subsidiary, associates and joint ventures, during the year under review, are as under:

Name of the Company

Relationship with the

Company

Details of changes

Date of change

Odisha Slurry Pipe Line Infrastructure Company Limited

Wholly Owned Subsidiary

Became a Subsidiary

27-02-2015

Essar Power Limited

Associates Ceased to be an Associate

16-03-2015

Essar Power MP Limited

Associates Became an Associate

10-04-2014

d. DIVIDEND Your Directors do not recommend any dividend for the year.

e. TRANSFER TO RESERVESThe Board of Directors has not recommended transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year under review has been carried forward to the Statement of Profit and Loss.

f. REVISIONOFFINANCIALSTATEMENTThere was no revision of the financial statements for the year under review.

g. DEPOSITSThe Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 (“the Act”) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THECOMPANIESACT,2013

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company’s financial position have occurred between the end of the financial year of the Company and date of this report.

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

Adequate internal control systems commensurate with the nature of the Company’s business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems consisting of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected. During the year under review, no material or serious observation reported for inefficiency or inadequacy of such controls.

j. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have material adverse impact on the going concern status and the Company’s operations in future.

k. PARTICULARS OF CONTRACTS OR ARRANGEMENTWITHRELATEDPARTIES

The transactions/contracts/arrangements entered by the Company with related party(ies) during the period under review, are in the ordinary course of business and



at arms’ length. Therefore such transactions do not come within the purview of the provisions of Section 188 of the Companies Act, 2013 (“Act”).To systematically deal with and ensure proper compliance of Section 177 and 188 of the Act, the Company has formulated a detailed Related Party Transactions Policy containing identification of related parties, identification of related party transactions, creation of monitoring team, roles and responsibilities of executives, approval matrix, approval process, documentation for arm’s length justification, methods to be used for arm’s length pricing, Audit trails etc.

Company’s major related party transactions are generally with its subsidiaries and associates. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, industry specialization and the Company’s long-term strategy for investments, optimization of market share, profitability, contractual obligations of lenders, legal requirements, liquidity and capital resources of subsidiaries and associates. All related party transactions are negotiated on an arms’ length basis, and are intended to further the Company’s interests. Barring above, details of two related party transactions (which were ratified by shareholders through postal ballot) are disclosed in Form AOC-2 annexed(Refer Annexure II) to this report.Attention of members is drawn to the disclosure of transactions with related parties set out in Note No.37 of Standalone Financial Statements, forming part of the Annual Report.

The Company in the ordinary course of business enters into number of transactions with related party/ies. The Company, therefore, proposes to seek approval of the shareholders at ensuing Annual General Meeting for obtaining omnibus approval with related parties as permitted under the Act.

l. PARTICULARS OF LOANS, GUARANTEES,INVESTMENTSANDSECURITIES

Particulars of loans, guarantees, investments and securities provided during the financial year under review along with the purposes for which such loans, guarantees and securities are proposed to be utilized by the recipients thereof, has been furnished in Annexure III which forms part of this report.

m. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIESACT,2013

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished.

n. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIESACT,2013

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished.

o. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIESACT,2013

The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished.

p. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIESACT,2013

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

2. MATTERS RELATED TO DIRECTORSAND KEYMANAGERIALPERSONNEL

a. BOARD OF DIRECTORS & KEY MANAGERIALPERSONNEL

Ms. Gayathri Sukumar (DIN 07115908 )was appointed as additional Director of the Company on March 30, 2015 to hold office up to the date of ensuing Annual General Meeting. The Company has received notice from a shareholder along with requisite deposits proposing the candidature of Ms Gayathri Sukumar for appointment as Director at the ensuing Annual General Meeting.

Shri S S Kohli, Shri S N Ruia, and Shri Alok Dhir Directors of the Company have resigned w.e.f. March 12, 2015, March 30, 2015 and May 13, 2015 respectively as Directors of the Company.

As per the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Shri P S Ruia and Shri Rana Som retires by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation.

b. DECLARATIONS BY INDEPENDENT DIRECTORS: The Company has received declarations from Shri Arvind Pande and Shri V G Raghavan, Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

c. PAYMENT OF COMMISSION TO MANAGERIALPERSONNEL

The Company has not paid any Commission to Managerial Personnel during the financial period under review.

3. DISCLOSURES RELATED TO BOARD,COMMITTEESANDPOLICIES

a. BOARDMEETINGS:

During the year under review, the Board of Directors met five times on April 16, 2014, June 04, 2014, September 05, 2014, October 27, 2014 and February 27, 2015.



17

b. DIRECTOR’SRESPONSIBILITYSTATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2015, the Board of Directors hereby confirms that:a. in the preparation of the annual accounts, the

applicable accounting standards had been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors 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 as at 31st March, 2015 and of the profit/loss of the Company for that year;

c. proper and sufficient care was taken 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 annual accounts of the Company have been prepared on a going concern basis;

e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

c. AUDITCOMMITTEE:

The composition of the Audit Committee is in conformity with the provisions of Section 177 of the Companies Act, 2013. The present Audit Committee comprises of Shri Arvind Pande, Chairman (Independent Director), Shri V G Raghavan (Independent Director), Shri J Mehra (Non-executive Director). Shri S.S. Kohli and Shri Alok Dhir, Independent Directors ceased to be a members of the committee consequent to their resignation as director w.e.f. March 04, 2015 and May 13, 2015. During the year, the Committee had met on June 04, 2014, September 04, 2014, October 27, 2014 and February 27, 2015.

The scope and terms of reference of the Audit Committee have been amended in accordance with the provisions of new Act. The Board of Directors of the Company had accepted all the recommendations of the Committee on all the matters.

d. NOMINATION AND REMUNERATIONCOMMITTEE:

The composition of Nomination and Remuneration Committee of Directors is in accordance with the requirements of Section 178 of the Act. The committee presently consists of Shri J. Mehra (Non-executive

Director), Shri Arvind Pande (Independent Director), Shri V G Raghavan (Independent Director) and Shri S Santhanakrishnan (Nominee Director-SBI). Shri S. S. Kohli ceased to be a member of the Committee w.e.f March 04, 2015 consequent to his resignation as director of the Company.

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

e. STAKEHOLDERSRELATIONSHIPCOMMITTEE:

The composition of Stakeholders Relationship Committee of Directors is in accordance with the requirements of Section 178 of the Act. The committee presently consists of Shri J. Mehra (Non-executive Director), Shri V G Raghavan (Independent Director) Shri S Santhanakrishnan (Nominee Director) and Shri Mahadev Iyer (Executive Director). During the year, the Committee had met on August 30, 2014, November 29, 2014, January 09, 2015, February 27, 2015 and March 30, 2015. The Company Secretary acts as the Secretary of the Stakeholders’ Relationship Committee.

f. VIGIL MECHANISM POLICY FOR THEDIRECTORSANDEMPLOYEES:

Pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board of Directors of the Company has formulated “Vigil Mechanism Policy” for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

g. RISKMANAGEMENTPOLICY:

The Board of Directors of the Company is in the process of devising Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company’s businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The Company has appointed a Chief Risk Officer to develop a policy and to monitor on-going basis risk and suggest mitigation measures.



h. CORPORATE SOCIAL RESPONSIBILITY POLICY:

The Corporate Social Responsibility Committee was formed in May 2013. As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, said committee was re-constituted and the present Committee consists of Shri J Mehra, (Non-Executive Director)Shri Rana Som, (Non-Executive Director), Shri Arvind Pande, (Independent Director), Shri V G Raghavan (Independent Director) and Shri Dilip Oommen (Managing Director). During the year under review, committee met once on September 04, 2014 to approve CSR budget, to take overview of activities to be undertaken and review activities carried out during the period. The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. The CSR Policy of the Company is available on the Company’s website. The Company is incurring losses and therefore not required to spend money on CSR activities required under Section 135 of the Companies Act, 2013, however, Company is undertaking CSR activities as part of MoEF conditions and also generally for the upliftment and benefit of project affected persons and persons residing in the vicinity where company carries its operations.i. ANNUAL EVALUATION OF DIRECTORS,

COMMITTEEANDBOARD:

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. The Board has followed process for its own performance and that of its Committees and individual Directors as devised in Nomination and Remuneration Policy.

j. INTERNALCONTROLSYSTEMS:

Adequate internal control systems commensurate with the nature of the Company’s business and size and complexity of its operations are in place has been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

k. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND RULE 5 OFCOMPANIES(APPOINTMENT&REMUNERATION)RULES, 2014- PARTICULARS OF EMPLOYEESAND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,

a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in AnnexureIV to this report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company’s website.

l. PAYMENTOFREMUNERATION/COMMISSIONTODIRECTORS FROM HOLDING OR SUBSIDIARYCOMPANIES:

None of the managerial personnel i.e. Managing Director and Whole time Directors of the Company are in receipt of remuneration/commission from the Holding or Subsidiary Company of the Company.

m. DISCLOSUREABOUTREMUNERATIONASPERSECTION II OF SCHEDULE V:

Disclosure about remuneration pay package of Directors and other details are given in AnnexureIV to this report.

4. AUDITORS AND THEIR REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTSFORTHEYEARENDEDMARCH31,2015ANDMANAGEMENT’SREPONSE:

The auditors of the Company have qualified their report to the extent and as mentioned in the Auditors’ Report. The qualification in auditors’ report and management’s response to such qualification are as under:

The Company has recognized deferred tax asset of ` 1,879.07 Crore on unabsorbed depreciation and carried forward business losses based on future profitability projections made by the management as stated in Note 14 of the financial statements. In our opinion, after considering sub note (b) of the aforesaid note 14, out of the aforesaid deferred tax asset, ` 1,196.03 Crore does not meet the criteria of ‘virtual certainty supported by convincing evidence’



19

as required under Accounting Standard (AS) 22 – Accounting for taxes on income. Had the deferred tax assets amounting of ` 1,196.03 Crore not been recognized, the accumulated losses would have been higher and the deferred tax asset would have been lower by ` 1,196.03 Crore.

Management’sResponse

The Company has recognized deferred tax assets of ` 1,879.07 Crore on unabsorbed depreciation and carried forward losses as on March 31, 2015 in view of the following:

i. Operations have commenced from integrated facilities at Hazira and Odisha after commissioning of Slurry Pipeline from Dabuna to Paradeep and Pellet Plant 1 (6 MTPA) at Paradeep.

ii. The Company has confirmed orders/MOUs amounting to ` 29,364 Crores in hand, which are to be executed over a period of one to ten years. The Company has received advances amounting to ` 9,621 Crores against the aforesaid confirmed orders/MOUs. The Company has ascertained profit before tax amounting to ` 1,974 Crores which will arise from the execution of these orders/MOUs and the same will absorb deferred tax assets amounting to ` 683 Crores.

iii. Based on significantly improved operating margins, Company’s monetisation plan of identified assets (in addition to the sale of Odisha Slurry Pipeline, already completed in current year), substantial orders in hand, sanction of enhanced working capital limits by the banks, dollarisation of substantial rupee term liabilities and consequent reduction in interest outgo and further disbursement of term loans by banks pursuant to information memorandum prepared by an eminent merchant banker for submission to a consortium of 25 banks after appraising the earning potential of the company in next 10 years for debt syndication, the Company is virtually certain that sufficient future taxable income will be available against which deferred asset of ` 1,879.07 Crores recognized as on 31st March, 2015 on unabsorbed depreciation and carried forward business losses can be realized.

The Auditors have put emphasis on the following matters and drawn the attention to certain facts considered in preparation of Annual Accounts for the financial year 2014-15.

1. We draw attention to Note 34 (c.1) regarding settlement of debts for Trinity Coal Corporation, an indirect subsidiary of the Company, and the related exposure. For

reasons explained in the Note, no provision has been made by the Company against the said exposure.

Management’sResponse Note 34 (c.1) appearing in annexed Financial

Statements is self- explanatory and needs no further explanation. Management has made the full disclosure of the facts and its view in the said note.

2. We draw attention to Note 49 to the financial statements regarding Company’s current liabilities exceeding its current assets by ` 7023.55 Crore as at March 31, 2015. The Company believes that for the reasons stated in the said Note it will have adequate liquidity to meet its liabilities as and when they fall due.

Management’sResponse Note 49 appearing in annexed Financial

Statements is self-explanatory and needs no further explanation. Management has made the full disclosure of the facts and its view in the said note.

3. Note 5 regarding long term loans including current maturities amounting to ` 1417.72 Crore which have been considered as Non-current for the reasons explained in the said Note.

A footnote to Note 5 appearing in annexed Financial Statements is self-explanatory and needs no further explanation. Management has made the full disclosure of the facts and its view in the said note.

4. We draw attention to Note no. 40 to the financials statement regarding accounting treatment of expenses incurred on the expanded facility at Hazira post completion but pending completion of integrated facility. For reasons explained in the Note,the Company has capitalized abnormal operating expenses amounting to ̀ 1,203.14 Crore incurred during year related to this facility and not provided depreciation for the said facility for the period of from 1st April, 2014 to 30th March, 2015 as the said facility has been capitalized on 31st March, 2015. The Company has relied upon opinions received from eminent experts in the field of Accountancy confirming that this accounting treatment is in accordance with requirements of relevant Accounting Standards issued by Institute of Chartered Accountants of India.

Management’sResponse Note 40 appearing in annexed Financial

Statementsis self-explanatory and needs no further explanation. Management has made



the full disclosure of the facts and its view in the said note.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED31STMARCH2015:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. V. V. Chakradeo & Co., Company Secretaries were appointed to issue Secretarial Audit Report for the financial year 2014-15.

Secretarial Audit Report issued by V. V. Chakradeo & Co., Company Secretaries in Form MR-3 for the financial year 2014-15 forms part to this report (Refer AnnexureV). The said report does not contain any observation or qualification requiring explanation or comments from the Board.

c. RATIFICATIONOFAPPOINTMENTOFAUDITORS: Pursuant to the provisions of Section 139 of the

Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. M M Chaturvedi & Co, Chartered Accountants, the Statutory Auditors of the Company were appointed for a term till the conclusion of Annual General Meeting to be held in year 2018. Their appointment as Statutory Auditors is required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.

Necessary resolution for ratification of appointment of Auditors is included in the Notice of AGM for seeking approval of members.

d. COST AUDITORS: The Board has re-appointed M/s. Manubhai &

Associates, Cost Accountants as the Cost Auditors of the Company for the financial year 2015-16 for all applicable Product Groups. The Cost Audit Report for the financial year 2014-15 will be filed within the stipulated period of 180 days from the closure of the financial year.

5. OTHER DISCLOSURES

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. EXTRACTOFANNUALRETURN: Pursuant to the provisions of Section 134(3)(a) of the

Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March 2015 made under the provisions of Section 92(3) of the Act is attached as AnnexureVIwhich forms part of this Report.

b. CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in AnnexureVII which forms part of this Report.

c. DISCLOSURE UNDER THE SEXUALHARASSMENT OF WOMEN AT WORKPLACE(PREVENTION,PROHIBITIONANDREDRESSAL)ACT,2013

The Company has in place a Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committees are set up at each business locations to redress complaints, if any. All employees are covered under the policy. There is no complaint outstanding as on 31.03.2015 for redressal.

6. ACKNOWLEDGEMENT

Your directors would like to express their gratitude for the assistance and cooperation received from the Financial Institutions, Banks, Government Authorities, Vendors, Customers and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation to all the employees for their commendable teamwork, exemplary professionalism and enthusiastic contribution during the year.

For and on behalf of the BoardFor Essar Steel India Limited

DilipOommen FirdoseVandrevalaManagingDirector&CEO ExecutiveViceChairman

Date : 26thAugust,2015Place:Mumbai



21

ANNEXURE–I

REPORTONPERFORMANCEOFSUBSIDIARIES,ASSOCIATESANDJOINTVENTURECOMPANIES:

Sr. No.

Name of the subsidiary Subsidiaries Essar Steel

TradingFZE

Essar Steel MiddleEast FZE

Paradeep Steel Company Limited

and Subsidiaries

Essar Steel

Offshore Limited

Essar MineralsLimited

Essar Mineral

Cooperatief U.A.

Essar MineralsCanada Limited

Essar Minerals

INC

New Trinity HoldingsLLC and

Subsidiaries

1 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

NA NA NA NA NA NA NA NA NA

2 Reporting currency in the case of foreign subsidiaries

USD USD INR USD USD USD USD USD USD

3 Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries

` / INR

62.59 62.59 NA 62.59 62.59 62.59 62.59 62.59 62.59

4 % of shareholding % 100 100 100 100 100 100 100 100 1005 Share capital (incl.

Share application Money)

` in Crores

24.51 385.99 0.20 732.29 876.64 1,638.64 2,428.25 1,582.40 789.52

6 Reserves & surplus

` in Crores

23.78 22.30 (10.35) (963.50) 109.31 (52.13) (1,096.49) (2,685.79) 2,133.99

7 Total assets (excluding Investment)

` in Crores

92.31 2,864.10 103.66 0.92 0.30 0.06 5.25 2.71 3,607.44

8 Total Liabilities ` in Crores

44.02 2,455.81 113.81 3,353.22 653.09 841.81 98.79 1,106.09 683.93

9 Investments ` in Crores

- - - 3,121.08 1,638.74 2,428.26 1,425.31 - -

10 Turnover ` in Crores

4.81 1,685.13 3.46 - 0.14 - - - 181.04

11 Profit/ (Loss) before taxation

` in Crores

0.49 21.10 (10.35) (157.34) (15.93) (44.28) (6.25) (110.37) (161.71)

12 Provision for taxation

` in Crores

- - - - - - - - 0.01

13 Profit/ (Loss) after taxation

` in Crores

0.49 21.10 (10.35) (157.34) (15.93) (44.28) (6.25) (110.37) (161.70)

14 Proposed Dividend

` in Crores

- - - - - - - - -



Sr.No.

Name of the Associates

Associates Bhander

Power Limited

Essar Bulk

Terminal Limited

Essar Power Hazira Limited

Essar Power Orissa Limited

Essar Steel Chhattisgarh

Limited

Essar Power MPLimited

1 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

NA NA NA NA NA NA

2 Reporting currency in the case of foreign subsidiaries

INR INR INR INR INR INR

3 Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries

` / INR NA NA NA NA NA NA

4 % of shareholding % 26.00% 26.00% 26.00% 26.00% 47.38% 26.00%5

Share capital (incl. Share application Money)

` in Crs 378.45 261.50 514.78 372.03 12.20 2,084.00

6 Reserves & surplus ` in Crs 602.76 1,075.38 (2.76) (8.83) 0.23 (160.02)7 Total assets (excluding Investment) ` in Crs 878.50 3,078.33 1,867.73 998.53 312.97 9,066.858 Total Liabilities ` in Crs 537.29 1,968.86 1,355.71 635.33 300.54 7,142.889 Investments ` in Crs 640.00 227.41 - - - -10 Turnover (incl. Other Income) ` in Crs 120.19 704.25 0.01 3.02 26.59 0.6011 Profit/ (Loss) before taxation ` in Crs (3.60) 307.90 (0.03) (0.93) 0.60 (83.42)12 Provision for taxation ` in Crs (5.03) 34.51 - (0.47) 0.21 -13 Profit/ (Loss) after taxation ` in Crs 1.43 273.39 (0.03) (0.46) 0.40 (83.42)14 Proposed Dividend ` in Crs - - - - - -

AnnexureII

Form AOC-2(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms’ length transactions under third proviso thereto1. Details of contracts or arrangements or transactions not at arm’s length basis - NIL However Company has entered in to following transactions which may be considered as not in the ordinary course of business

and for which approval of the shareholders of the Company was obtained.

Name(s) of the related party and nature of relationship

Odisha Slurry Pipeline Infrastructure Limited

Odisha Slurry Pipeline Infrastructure Limited

Nature of contracts/ arrangements / transactions

Sale of 253 Kms. Slurry pipeline located between Dabuna to Pardeep in the State of Odisha together with related facilities

Capacity sharing for 253 km Slurry pipeline located between Dabuna to Pardeep in the State of Odisha together with related facilities as right-to-use

Duration of the contracts / arrangements/transactions

One time contract 20 years commencing from April 1, 2015

Salient terms of the contracts or arrangements or transactions including the value, if any

Sale of complete Business Undertaking for a consideration of ` 4,000 Crore* (Based on valuation carried out by E&Y LLP)

Right to use AgreementUsage Charges - ` 600 / MT for all years, excepting for FY15-16 wherein it would be ` 450/MT.Allocated Capacity – 10 MTPA, Competitively Allocated Capacity – 2 MTPA

Date(s) of approval by the Board, if any

February 27, 2015 February 27, 2015

Amount paid as advances, if any

NIL NIL

2. Details of material contracts or arrangement or transactions at arm’s length basis – Details of such contracts are appearing in Note 37 to the Standalone Financial Statements of the Company for the year 2014-15.



23

AnnexureIV

Discoloursundersection197(12)oftheCompaniesAct,2013

Remuneration of Directors

1) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, during the financial year and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

A. Whole-timeDirectorsandKMP

NameofKMP % increase in remuneration

Ratio of remuneration of each director to the median remuneration paid/ payable to allemployee for FY 2014-15

Firdose Vandrevala, Executive Vice Chairman

Nil 117.87:1

Dilip Oommen,Managing Director & CEO

Nil 42.65:1

Mahadev Iyer,Director (Finance) & CFO

Nil 38.77:1

Rakesh Darji,Company Secretary

5 % Not applicable

Comparison of remuneration of KMP against performance of the Company:

The Net profit of the Company increased from loss of ` 1597.14 Cr in FY 2013-14 to profit of ` 648.05 Crore in FY 2014-15

B.Non-ExecutiveDirectors Non-executive Directors are not entitled to any remuneration except payment of sitting fees, details of which are

appearing in Annexure IV.2) Median remuneration of all the employees of the Company for the financial year 2014-15 : ` 6.45 lakhs per annum3) The percentage increase in the median remuneration of Employees for the financial year: 9.63%4) The number of permanent employees on the payrolls of the Company as on March 31, 2015 : 43855) Relationship between average increase in remuneration and Company’s performance: The average increase in remuneration of (including performance bonus) during FY 2015 was 7.5% as compared to

previous financial year. Income from operations of the Company during the financial year grew from ` 14352.66 crore to ` 14984.31 crore (an increase of 4 %) and Net Profit of the Company during the financial year grew from loss of ` 1597.14 Crore to profit of ` 648.05 crore.

6) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company : Refer Point No. 1

7) Variation in market capitalization: Not applicable as shares of Company are not listed.8) Average percentage increase made in the salaries of Employees other than the managerial personnel in the financial

year was 7.50 % whereas the increase in the managerial remuneration was 0.10 %. 9) The key parameters for any variable component of remuneration availed by the directors The remuneration to whole-time directors includes variable component of 30% and the same is determined based

on balance score card achieved by each of WTD and based on individual as well performance of the Company as a whole.

10) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year.

No employee of the Company receives remuneration in excess of the highest paid director, i.e. Shri Firdose Vandrevala11) Remuneration is as per the remuneration policy of the company.

AnnexureIII

Particularsofloans,guarantees,investmentsandsecurities:

Details of loans, guarantees and investments covered under the provision of Section 186 of the Companies Act, 2013 are given in note number 51A of the Notes to the standalone financial statements.



ANNEXURE-V

FORM NO 3SECRETARIAL AUDIT REPORTFor the Financial year ended 31st March 2015.

(Pursuant to section 204 (1) of the companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of managerial Personnel rules, 2014)

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Essar Steel India Limited (hereinafter called the Company). Secretarial audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company its officers, agents and authorised representatives during the conduct of secretarial audit, we hereby report that in our opinion the Company had during the audit period covering the financial year ended on 31st March 2015 complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance mechanism in place to the extent in the manner and subject to the reporting made hereinafter :

We have examined the books papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2015 according to the provisions of:-i) The Companies Act, 2013 (Act) and the rules made Act, 1996 and the thereunder;ii) The Securities Contracts(Regulation) Act, 1956 (SCRA) and the rules made thereunder;iii) The Depositories Act 1996 and the regulations and Byelaws framed thereunder;iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct

Investment, overseas Direct Investment and External Commercial Borrowings;v) The following regulation guidelines prescribed under Securities and Exchange Board of India Act, 1992, (SEBI Act) – Not

Applicable (NA) a) Securities and Exchange Board of India, (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; NA b) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; NA c) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; NA d) Securities and Exchange Board of India (Employees Stock Options Scheme And Stock Purchase Scheme ) Guidelines

1999; NA e) Securities and Exchange Board of India ( Issue of Listing of Debt Securities) Regulations, 2008; NA f) Securities and Exchange Board of India (Registrar to Issue and Share Transfer Agents) Regulations 1993 regarding

the Companies Act, and dealing with client. NA g) Securities and Exchange Board of India (delisting of equity shares) regulations, 2009 and(NA) h) Securities and Exchange Board of India (buyback of securities) regulations 1998; (NA)vi) All applicable Labour Lawsvii) Factories Act, 1948viii) Bombay Shop & Establishment Act,1948ix) Environment Protection Act, 1986 and other Environmental Laws.x) Hazardous Wastes (Management and Handling) Rules, 1989 and Amendment Rules, 2003xi) Indian Contract Act,1872xii) Income Tax Act,1961 and Indirect Tax Laws We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by the Institute of Company Secretaries of India. (ii) the listing agreements entered into by the Company with the stock exchange, regulations, guidelines, standard etc.

mentioned above subject to the following observations.During the year under review the Company has complied with the provisions of the Act, rules, rules, regulations, guidelines, standards etc. mentioned above.We further report that - The Board of Directors of the Company is duly constituted with proper balance of executive directors, non-executive directors and independent directors. The changes in composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the board meeting and agenda and detailed notes on agenda were sent at least seven days in advance and system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for the meaningful participation at the meeting.Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

FOR V. V. CHAKRADEO & CO.

Place:Mumbai VVCHAKRADEODate : 26thAugust,2015 COP1705,FCS3382



25

ANNEXURE-VI

EXTRACT OF ANNUAL RETURNAs on financial year ended on 31st March 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

Form No. MGT 9

I. REGISTRATION AND OTHER DETAILS:

i) CIN : U27100GJ1976FLC013787ii) Registration Date : JUNE 01, 1976iii) Name of the Company : ESSAR STEEL INDIA LIMITED iv) Category / Sub-Category of the Company : MANUFACTURING OF STEEL v) Address of the Registered office and contact details : Essar Steel India Limited

27 km, Surat Hazira Road,Dist Surat Pin 394270Tel no. 0261 – 6682400 Fax no 0261 – 6685731

vi) Whether listed company : Equity Shares of the Company are not listed on any Stock Exchanges

viii) Name, Address and Contact details of Registrar and Transfer Agent, if any:

: Data Software Research Co Pvt Ltd.19, Pycrofts Garden Road,Off Haddows Road, NungambakkamChennai 600006Tel no. 044 28213738 | Fax no – 04428214636

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No.

Name and Description of main products/services

NIC Code of the Product/ service % to total turnover of the Company

1 Manufacturing of Hot Rolled Coils/Cold Rolled Coils/Sheets/Plates

330 / (New Code No. 2410) 78%


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imite

dE

ssar

Hou

se, 1

0 Fr

ere

Felix

De

Valio

us S

treet

, P

ort L

ouis

, Mau

ritiu

s

NA

Who

lly O

wne

d S

ubsi

diar

y10

0%2(

87)(

ii)

5P

arad

eep

Ste

el C

ompa

ny L

imite

dE

ssar

Hou

se,1

1 K

K M

arg,

Mah

alax

mi

Mum

bai-4

0003

4

U27

100M

H20

11P

LC21

7214

Who

lly O

wne

d S

ubsi

diar

y10

0%2(

87)(

ii)

6O

dish

a S

lurr

y P

ipel

ine

Infra

stru

ctur

e Li

mite

dP

roje

ct S

ite, N

ear I

FFC

O, U

nit,

Uda

ybat

a,

Par

adee

p, O

dish

a-75

4142

U60

200O

R20

14P

LC01

8639

Who

lly O

wne

d S

ubsi

diar

y10

0%2(

87)(

ii)

7H

azira

Cok

e Li

mite

d27

KM

Sur

at H

azira

Roa

d S

urat

-394

270

U23

100G

J201

4PLC

0782

42S

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100%

2(87

)(ii)

8E

ssar

Min

eral

s Li

mite

d N

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

9E

ssar

Min

eral

Coo

pera

tief U

.A.

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

10E

ssar

Min

eral

s C

anad

a Li

mite

dN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

11N

ew T

rinity

Hol

ding

s LL

C

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

12N

ew T

rinity

Coa

l Inc

. N

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

13N

ew R

esou

rces

Inc.

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

14E

ssar

Min

eral

s IN

CN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

15Tr

inity

Par

ent C

orpo

ratio

n N

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

16Tr

inity

Coa

l Cor

pora

tion

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

17Tr

inity

Coa

l Par

tner

s LL

CN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

18B

ear F

ork

Res

ourc

es L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)



27

Sr.

No.

Nam

e an

d ad

dres

s of

the

com

pany

CIN/GLN

Holding

/Sub

sidiary/Associate

% o

f Sh

ares

H

eld

App

licab

le

Sect

ion

19D

eep

Wat

er R

esou

rces

LLC

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

20Le

visa

For

k R

esou

rces

LLC

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

21N

orth

Spr

ings

Res

ourc

es L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

22Li

ttle

Elk

Min

ing

Com

pany

LLC

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

23B

anne

r Coa

l Ter

min

al L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

24H

ughe

s C

reek

Ter

min

al L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

25Tr

inity

Coa

l Mar

ketin

g LL

CN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

26Fr

asur

e C

reek

Min

ing

LLC

N

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

27Fa

lcon

Res

ourc

es L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

28P

rate

r Bra

nch

Res

ourc

es L

LCN

AS

tep-

dow

n W

holly

Ow

ned

Sub

sidi

ary

100

2(87

)(ii)

29Tr

inity

RM

G H

oldi

ngs

LLC

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

30R

MG

INC

NA

Ste

p-do

wn

Who

lly O

wne

d S

ubsi

diar

y10

02(

87)(

ii)

31B

hand

er P

ower

Lim

ited

27 K

M S

urat

Haz

ira R

oad

Sur

at-3

9427

0U

3110

1GJ1

995P

LC06

5146

Ass

ocia

tes

26%

2(87

)(ii)

32E

ssar

Bul

k Te

rmin

al L

imite

d27

KM

Sur

at H

azira

Roa

d S

urat

-394

270

U13

100G

J200

4PLC

0434

77A

ssoc

iate

s26

%2(

87)(

ii)

33E

ssar

Pow

er O

rissa

Lim

ited

27 K

M S

urat

Haz

ira R

oad

Sur

at-3

9427

0U

3110

1GJ2

005P

LC08

1701

Ass

ocia

tes

26%

2(87

)(ii)

34E

ssar

Ste

el C

hhat

tisga

rh L

imite

d 27

KM

Sur

at

Haz

ira R

oad

Sur

at-3

9427

0U

2710

0GJ2

005F

LC04

6274

Ass

ocia

tes

47.3

8%2(

87)(

ii)

35E

ssar

Pow

er H

azira

Lim

ited

27 K

M S

urat

Haz

ira R

oad

Sur

at-3

9427

0U

4030

0GJ2

006P

LC06

3146

Ass

ocia

tes

26%

2(87

)(ii)

36E

ssar

Pow

er M

P Li

mite

d27

KM

Sur

at H

azira

Roa

d S

urat

-394

270

U40

100G

J199

1PLC

0648

24A

ssoc

iate

s26

%2(

87)(

ii)

37E

ssar

Ste

el P

roce

ssin

g FZ

CO

Plo

t No

S40

402

PB

No

2617

54 J

afza

Sou

th

Dub

ai U

AE

NA

Ass

ocia

tes

40%

2(87

)(ii)


Essar Steel India LimitedII.

SHAREHOLD

INGPAT

TERN(E

quityShareCapitalB

reakup

aspercentageofTotalEqu

ity)

A)

Category-wiseSh

areHolding

CategoryofShareho

lders

No.ofS

haresheldatthebeginning

oftheyear

[Ason

31-March-2014]

No.

of S

hare

s he

ld a

t the

end

of t

he y

ear

[Ason

31-March-2015]

%Chang

e du

ring

the

year

Dem

atPh

ysic

alTo

tal

% o

f Tot

al

Shar

esD

emat

Phys

ical

Tota

l%

of T

otal

Sh

ares

A. P

rom

oter

s(1

) Ind

ian

a)

Indi

vidu

al/ H

UF

00

00

00

00

0

b)

Cen

tral G

ovt

00

00

00

00

0

c)

Sta

te G

ovt(s

)0

00

00

00

00

d)

Bod

ies

Cor

p. 4

45,0

39,7

561,

986

445

,041

,742

15.

75 6

84,6

35,1

6084

3 6

84,6

36,0

03 2

2.02

6.2

7e)

B

anks

/ FI

00

00

00

00

0

f) A

ny o

ther

(Tru

st)

191

,517

,500

0 1

91,5

17,5

00 6

.78

191

,517

,500

0 1

91,5

17,5

00 6

.16

-0.6

2

(1) F

orei

gna)

In

divi

dual

/ HU

F0

00

00

00

00

d)

Bod

ies

Cor

p.21

1,14

,91,

537

021

1,14

,91,

537

74.7

421

5,21

,50,

462

40,6

3,82

421

5,62

,14,

286

69.3

5-5

.39

Totalshareho

ldingofPromoter(A

)274,80,48,793

1,986

274,80,50,779

97.2

8302,83,03,122

40,64,667

303,23,67,789

97.5

40.

26B.P

ublicShareho

lding

1.In

stitu

tions

a)

Mut

ual F

unds

99,6

2219

,662

1,19

,284

0.00

99,7

8119

,563

1,19

,344

0.00

0.00

b)

Ban

ks /

FI7,

38,3

575,

083

7,43

,440

0.03

7,38

,357

5,08

37,

43,4

400.

020.

00

c)

Cen

tral G

ovt

00

00

00

00

0d)

S

tate

Gov

t(s)

00

00

00

00

0e)

Ve

ntur

e C

apita

l Fun

ds0

00

00

00

00

f) In

sura

nce

Com

pani

es0

00

00

00

00

g)

FIIs

071

,917

71,9

170.

000

71,9

1771

,917

0.00

0.00

h) F

orei

gn V

entu

re C

apita

l Fun

ds0

00

00

00

00

i)

Oth

ers

(spe

cify

)0

00

00

00

00

Sub

-tota

l (B

)(1)

:-8,

37,9

7996

,662

9,34

,641

0.03

8,38

,138

96,5

639,

34,7

010.

030.

002.

Non

-Inst

itutio

nsa)

B

odie

s C

orp.

i) In

dian

53,3

4,57

791

,428

54,2

6,00

50.

1952

,84,

251

90,1

9853

,74,

449

0.17

-0.0

2ii)

O

vers

eas

2,54

13,

06,0

303,

08,5

710.

012,

541

3,03

05,

571

0.00

0.01

b)

Indi

vidu

als

i)

Indi

vidu

al s

hare

hold

ers

hold

ing

nom

inal

shar

e ca

pita

l upt

o `

1 la

kh

3,95

,97,

403

1,67

,17,

140

5,63

,14,

543

1.99

3,97

,55,

633

1,65

,61,

533

5,63

,17,

166

1.81

0.18



29

II.

SHAREHOLD

INGPAT

TERN(E

quityShareCapitalB

reakup

aspercentageofTotalEqu

ity)

A)

Category-wiseSh

areHolding

CategoryofShareho

lders

No.ofS


oftheyear

[Ason

31-March-2014]

No.

of S

hare

s he

ld a

t the

end

of t

he y

ear

[Ason

31-March-2015]

%Chang

e du

ring

the

year

Dem

atPh

ysic

alTo

tal

% o

f Tot

al

Shar

esD

emat

Phys

ical

Tota

l%

of T

otal

Sh

ares

A. P

rom

oter

s(1

) Ind

ian

a)

Indi

vidu

al/ H

UF

00

00

00

00

0

b)

Cen

tral G

ovt

00

00

00

00

0

c)

Sta

te G

ovt(s

)0

00

00

00

00

d)

Bod

ies

Cor

p. 4

45,0

39,7

561,

986

445

,041

,742

15.

75 6

84,6

35,1

6084

3 6

84,6

36,0

03 2

2.02

6.2

7e)

B

anks

/ FI

00

00

00

00

0

f) A

ny o

ther

(Tru

st)

191

,517

,500

0 1

91,5

17,5

00 6

.78

191

,517

,500

0 1

91,5

17,5

00 6

.16

-0.6

2

(1) F

orei

gna)

In

divi

dual

/ HU

F0

00

00

00

00

d)

Bod

ies

Cor

p.21

1,14

,91,

537

021

1,14

,91,

537

74.7

421

5,21

,50,

462

40,6

3,82

421

5,62

,14,

286

69.3

5-5

.39

Totalshareho

ldingofPromoter(A

)274,80,48,793

1,986

274,80,50,779

97.2

8302,83,03,122

40,64,667

303,23,67,789

97.5

40.

26B.P

ublicShareho

lding

1.In

stitu

tions

a)

Mut

ual F

unds

99,6

2219

,662

1,19

,284

0.00

99,7

8119

,563

1,19

,344

0.00

0.00

b)

Ban

ks /

FI7,

38,3

575,

083

7,43

,440

0.03

7,38

,357

5,08

37,

43,4

400.

020.

00

c)

Cen

tral G

ovt

00

00

00

00

0d)

S

tate

Gov

t(s)

00

00

00

00

0e)

Ve

ntur

e C

apita

l Fun

ds0

00

00

00

00

f) In

sura

nce

Com

pani

es0

00

00

00

00

g)

FIIs

071

,917

71,9

170.

000

71,9

1771

,917

0.00

0.00

h) F

orei

gn V

entu

re C

apita

l Fun

ds0

00

00

00

00

i)

Oth

ers

(spe

cify

)0

00

00

00

00

Sub

-tota

l (B

)(1)

:-8,

37,9

7996

,662

9,34

,641

0.03

8,38

,138

96,5

639,

34,7

010.

030.

002.

Non

-Inst

itutio

nsa)

B

odie

s C

orp.

i) In

dian

53,3

4,57

791

,428

54,2

6,00

50.

1952

,84,

251

90,1

9853

,74,

449

0.17

-0.0

2ii)

O

vers

eas

2,54

13,

06,0

303,

08,5

710.

012,

541

3,03

05,

571

0.00

0.01

b)

Indi

vidu

als

i)

Indi

vidu

al s

hare

hold

ers

hold

ing

nom

inal

shar

e ca

pita

l upt

o `

1 la

kh

3,95

,97,

403

1,67

,17,

140

5,63

,14,

543

1.99

3,97

,55,

633

1,65

,61,

533

5,63

,17,

166

1.81

0.18

CategoryofShareho

lders

No.ofS


oftheyear

[Ason

31-March-2014]

No.

of S

hare

s he

ld a

t the

end

of t

he y

ear

[Ason

31-March-2015]

%Chang

e du

ring

the

year

Dem

atPh

ysic

alTo

tal

% o

f Tot

al

Shar

esD

emat

Phys

ical

Tota

l%

of T

otal

Sh

ares

ii)

Indi

vidu

al

shar

ehol

ders

ho

ldin

g no

min

al

shar

e ca

pita

l in

exc

ess

of `

1

lakh

1,14

,89,

896

4,14

,956

1,19

,04,

852

0.42

1,14

,57,

575

4,38

,506

1,18

,96,

081

0.38

0.04

c)

Oth

ers

(spe

cify

)0

00

00

00

00

Non

Res

iden

t Ind

ians

9,58

,653

10,5

3,30

820

,11,

961

0.07

10,1

6,66

210

,45,

247

20,6

1,87

30.

070.

00Fo

reig

n N

atio

nals

00

00

00

00

0C

lear

ing

Mem

bers

00

00

00

00

0Tr

usts

00

00

00

00

0S

ub-to

tal (

B)(

2):-

216,

88,7

4,60

71,

85,8

2,86

221

8,74

,57,

469

77.4

322

5,39

,14,

905

2,22

,02,

338

227,

61,1

7,24

373

.21

4.22

TotalP

ublicShareho

lding

(B)=

(B)(1

)+ (B

)(2)

216,97,12,586

1,86,79,524

218,83,92,110

77.4

7225,47,53,043

2,22,98,901

227,70,51,944

73.2

44.

22

C.

Sha

res

held

by

C

usto

dian

fo

r G

DR

s &

AD

Rs

00

00

00

00

0

Gra

nd T

otal

(A+B

+C)

2,80,62,69,842

1,86,81,510

2,82,49,51,352

100

3,08,66,57,916

2,22,99,744

3,10,89,57,660

100

0.00

B)

Shareholding

ofP

romoter-

SN

Shar

ehol

der’s

Nam

eSh

areholding

atthebeginning

oftheyear

Shareholding

attheend

oftheyear

%chang

ein

sha

re-

holding

durin

gthe

year

No.

of S

hare

s%

of t

otal

Sh

ares

of t

he

com

pany

%of

Sha

res

Pledged/

encu

mbe

red

to

tota

l sha

res

No.

of S

hare

s%

of t

otal

Sh

ares

of t

he

com

pany

%of

Sha

res

Pledged/

encu

mbe

red

to to

tal s

hare

s

1E

ssar

Ste

el A

sia

Hol

ding

s Li

mite

d*2,

108,

864,

699

74.6

525

.28

2,15

3,58

7,44

869

.27

69.3

6-5

.38

2E

ssar

Ste

el L

imite

d **

2,62

6,83

80.

0817

.43

2,62

6,83

80.

080.

000.

00

3Im

peria

l Con

sulta

nts

& S

ec P

rivat

e Lt

d43

4,45

2,28

415

.38

14.0

062

9,65

6,75

820

.25

13.0

60.

93

4In

Tru

st –

VG

Rag

hava

n (T

reas

ury

Sha

res

for t

he b

enefi

t of E

ssar

Ste

el

Indi

a Li

mite

d)

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C) Change in Promoters’ Shareholding (please specify, if there is no change)

Sr No

Particulars Shareholdingatthebeginningof the year

CumulativeShareholdingduringtheYear

No. of shares % of totalshares of the

company

No. of shares % of totalshares of the

company1 At the beginning of the year 274,80,50,779 97.282 Date wise Increase / Decrease in

PromotersShareholding during the year specifying the reasons for increase /decrease (e.g. allotment /transfer / bonus/ sweatequity etc):

28,43,17,010 0.26

Allotment of Shares – 29-11-2014 1,79,95,582 276,60,47,249Allotment of Shares – 09-01-2015 4,42,47,787 281,02,95,036Allotment of Shares – 27-02-2015 40,63,824 281,43,58,860Allotment of Shares - 30-03-2015 21,76,99,115 303,20,57,975Transfer of Shares 3,09,814 303,23,67,789 97.54

3 At the end of the year 303,23,67,789 97.54

D) Shareholding Pattern of top ten Shareholders:

(other than Directors, Promoters and Holders of GDRs and ADRs):

Sr No

For Each of the Top 10Shareholders

Shareholdingatthebeginningoftheyear

Shareholdingattheendofthe year

No. of shares

% of totalshares of the

company

No. of shares


companyAt the Beginning of the year

1 IFCI Limited 7,20,000 0.03% 7,20,000 0.03%2 Neetu Singh 5,85,000 0.03% 5,85,000 0.03%3 Arihant Advertising Private Limited 4,93,000 0.02% 4,93,000 0.02%4 Global Securities Limited 3,03,000 0.02% 3,03,000 0.02%5 Nak Securities Limited 2,25,000 0.01% 2,25,000 0.01%6 CopcoanVyapaar Private Limited 2,25,000 0.01% 2,25,000 0.01%7 AridhiVanijya Private Limited 2,18,000 0.01% 2,18,000 0.01%8 Dharamshi Securities Private Limited 2,00,000 0.01% 2,00,000 0.01%9 Rita Bothra 1,99,746 0.01% 1,99,746 0.01%

10 Jayesh Nagji Nisar 1,93,166 0.01% 1,93,166 0.01%

E) Shareholding of Directors and Key Managerial Personnel:

Sr. No

Shareholding of each Directors and each Key Managerial Personnel

Shareholdingatthebeginningoftheyear

CumulativeShareholdingduring

theYearNo. of shares


company

No. of shares

% of totalshares of

thecompany

At the beginning of the year NIL NIL NIL NILDate wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease (e.g. allotment /transfer/bonus/sweat equity etc):

NIL NIL NIL

At the end of the year NIL NIL NIL NIL



31

F) INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment as on March 31, 2015 is as under.

(` in Crore)

ParticularSecured Loans

excludingdeposits

Unsecured Loans Deposits/ICD Total

Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 33,471.78 226.30 1,506.37 35,204.45

ii) Interest due but not paid 265.41 1.30 - 266.71

iii) Interest accrued but not due 368.94 - 196.30 565.24

Total (i+ii+iii) 34,106.13 227.60 1,702.67 36,036.40Change in Indebtedness during the financial year

NetChange-Addition/(Reduction) (4,648.73) (0.36) 1,017.61 (3,631.48)Indebtedness at the end of the financial year

i) Principal Amount 28,738.22 226.22 2,471.54 31,435.98

ii) Interest due but not paid 474.48 1.02 175.59 651.09

iii) Interest accrued but not due 244.70 - 73.15 317.85

Total (i+ii+iii) 29,457.40 227.24 2,720.28 32,404.92

XI.REMUNERATIONOFDIRECTORSANDKEYMANAGERIALPERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: For FY 2014-15 (` in Lakh)

Sr. No

Particulars of Remuneration NameofMD/WTD/Manager Total Amount

(` In Lakh)Firdose VandrevalaEx.Vice

Chairman

Dilip OommenMD&CEO

MahadevIyer

Dir (Fin) & CFO

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

656.09 257.49 217.22 1130.80

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

0.00 25.80 0.00 25.80

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

NIL NIL NIL NIL

2 Stock Option NIL NIL NIL NIL

3 Sweat Equity NIL NIL NIL NIL

4 Commission- as % of profit- others, specify

NIL NIL NIL NIL

5 Others, please specify NIL NIL NIL NIL

Total (A) 656.09 283.29 217.22 1156.60

6 Ceiling as per the Act As per Schedule V, Part II of the Companies Act, 2013



B. Remuneration to other directors

(` in Lakh)

Sr. No.

Particulars of Remuneration

Name of Directors Total Amount

AP SSK AD VGR -- --1 Independent Directors

Fee for attending board committee meetings 1.60 1.50 0.40 1.60 5.10Commission Nil Nil Nil Nil

Others, please specify Nil Nil Nil Nil

Total (1) 1.60 1.50 0.40 1.60 5.10 Independent Directors > AP – Arvind Pande, SSK – S S Kohli, AD – Alok Dhir, VGR – V G Raghavan

SNR PSR JM RS SS HB

2 Other Non-Executive Directors

Fee for attending board committee meetings - 0.40 2.00 1.50 1.30 0.40 5.60Commission - - - - - - Others, please specify - - - - - -

Total (2) - 0.40 2.00 1.50 1.30 0.40 5.60 Total (B)=(1+2) 10.70 Total ManagerialRemuneration 1167.30

Overall Ceiling as per the Act As per provision of Section 197 of the Companies Act, 2013Non-Executive Directors > SNR – S N Ruia, PSR – P S Ruia, JM – J Mehra, RS – Rana Som, SS – S Santhanakrishnan, HB – H Biswas

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

(` in Lakh)

Sr. No.

Particulars of Remuneration

KeyManagerialPersonnel

CEO CFO CS Total

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

N.A. N.A. 23.81 23.81

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 N.A. N.A. 0.00 0.00

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 N.A. N.A. 0.00 0.00

2 Stock Option N.A. N.A. N.A. N.A.

3 Sweat Equity N.A. N.A. N.A. N.A.

4 Commission

- as % of profit N.A. N.A. N.A. N.A.

others, specify… N.A. N.A. N.A. N.A.

5 Others, please specify N.A. N.A. N.A. N.A.

Total N.A. N.A. 23.81 23.81

XII.PENALTIES/PUNISHMENT/COMPOUNDINGOFOFFENCES:NIL



33

Annexure–VIIA. CONSERVATION OF ENERGY: a) EnergyConservationmeasurestaken: 1. MH-Modification in NC 17 reclaiming route for B & C yard material feeding -Annual Energy savings

(KWH)-2.21 Lakhs 2. MH-Logic modification in feeding system for pellets & Iron Ore to Mod V-VI and Corex -Annual Energy

savings (KWH)-15.33 Lakhs 3. CPP1-19MW-BBT-Interconnection of 19 MWPP air network with BF air network -Annual Energy savings

(KWH)-13 Lakhs 4. HBI-VPSA efficiency increased by 10 % by Closed Cooling Water System Modification -Annual Energy

savings (KWH)-15 Lakhs 5. HBI-Mod-6 MR Water system modification to reduce requirement of one pump -7 Lakhs 6. SMP1-Optimization of Hydraulic pump and Oil Pump in LF and EAF -Annual Energy savings (KWH)-

41.22 Lakhs 7. SMP1-Energy saving by AHU auto control and Compressor Cooling line modification-Annual Energy

savings (KWH)-5.50 Lakhs 8. LP-APC power reduction during inversion time and Lighting modification - Annual Energy savings (KWH)

- 0.41 Lakhs 9. SMP2-Revival of HMPS- ID FAN VVVF drive -Annual Energy savings (KWH)-2.1 Lakhs 10. HSM-Idle power reduction - Annual Energy savings (KWH) - 34 Lakhs 11. HSM-Increased Corex Gas utilization replacing costly NG as fuel - 23.5 Lakhs 12. COREX-VFD installation in Slag annex crane Hoist drive in Corex-1 &2 -Annual Energy savings (KWH)-

2 Lakhs 13. COREX-Optimize ID fan operation in CDP - Annual Energy savings (KWH) - 2.16 Lakhs 14. CRM-Energy saving in CTCM by Switching off Hydraulic system Motors -Annual Energy savings (KWH)-

15.4 Lakhs 15. CRM-Bridle Master Motor stopped as per Operational modification -Annual Energy savings (KWH)-3

Lakhs 16. Utilities-RHTOB condenser pump switch off and minimizing idle running of Aux pump - Annual Energy

savings (KWH)-7.1 Lakhs 17. Utilities-40% Energy Saving in condenser cooling water circuit at Chiller Plant. -Annual Energy savings

(KWH)-1.5 Lakhs 18. Utilities-Lance air valve installation at Conarc 1 -Annual Energy savings (KWH)-2.27 Lakhs 19. CSP MILL-Reduction in COREX gas and idle power consumption - Annual Energy savings (KWH) -

22.06 Lakhs 20. Plate mill-Optimization of Main Drive Auxiliary and Hydraulic System in Pre Piler - Annual Energy

savings (KWH) - 37.78 Lakhs 21. Plate mill-Installation of Air Turbo ventilator fans on Roof Top above Cooling bed # 2 -Annual Energy

savings (KWH)-0.17 Lakhs 22. Pipe mill-Modification in cooling water line to control temperature of Induction Heater DM water.-Annual

Energy savings (KWH)-1.92 Lakhs 23. Pipe mill-Merging of Hydraulic power pack units and automated by PLC -Annual Energy savings (KWH)

- 3.9 Lakhs 24. Replacement of vacuum disc filters with ceramic filters Energy savings (KWH) -53.30 Lakhs 25. Utilizing Pressure Filters in place of Vacuum disc filters Energy savings (KWH) -87.20 Lakhs 26. Utilizing spare capacity from 250KW air compressor and eliminating the operation of 55KW air

compressor Energy savings (KWH) -24.60 Lakhs 27. Power factor improvement from 0.96 to 0.99Energy savings (KWH) -55.86 Lakhs 28. Using VFD’s for pump applications in the plant for flow control Energy savings (KWH) -63.60 Lakhs



b) AdditionalInvestmentsandproposalsbeingimplementedforreductioninconsumptionofenergy: 1. SINTER - Synchronous transformer to be taken in line - Savings in kWh, 30 Lakhs - Approximate

Investment - 4 Lakhs 2. SINTER - High Efficient (COG) Burner in Ignition Furnace for Sinter Plant - Savings in NG KSCM, 8.1 -

Approximate Investment - 52 Lakhs 3. RMHS - SMP-MH DDS 400kW HT MOTOR IDLE RUNNING POWER OPTIMIZATION - Savings in kWh,

3 Lakhs - Approximate Investment – Nil 4. SMP2 - FES-2 Primary booster fan impeller replacement - Savings in kWh, 89.1 Lakhs - Approximate

Investment - 80 Lakhs 5. HSM - Laminar Cooling Tower(CT) Pump replacement with energy efficient pumps - Savings in kWh, 18

Lakhs - Approximate Investment - 30 Lakhs 6. HSM - Booster Pump replacement with energy efficient pumps - Savings in kWh, 87 Lakhs - Approximate

Investment - 100 Lakhs 7. HSM - Laminar Cooling Tower pressure filter (PF) Pump replacement with energy efficient pumps -

Savings in kWh, 22 Lakhs - Approximate Investment - 75 Lakhs 8. HSM - Laminar Pump replacement with energy efficient pumps - Savings in kWh, 28 Lakhs - Approximate

Investment - 80 Lakhs 9. PLATE MILL - Optimization of Cooling water supply during Roll change - Savings in kWh, 0.22 Lakhs -

Approximate Investment – Nil 10. PLATE MILL - Modification in Illumination network - Savings in kWh, 0.17 Lakhs - Approximate Investment

- 1 Lakhs 11. PLATE MILL - Installation of Translucent sheets for lighting - Savings in kWh, 1.1 Lakhs - Approximate

Investment - 5 Lakhs 12. CPP1 - Installation of VFD to avoid recirculation in CEPS at BBT- blower house and 19 MW power plant.

- Savings in kWh, 264 Lakhs - Approximate Investment - 8.2 Lakhs 13. CCP - Oxyfuel burner usage for Ladle and Tundish preheating - Savings in kWh, 64 Lakhs - Approximate

Investment - 66 Lakhs 14. CCP - To replace Tube light with CFL /LED in Caster Cable Tunnel - Savings in kWh, 0.3 Lakhs -

Approximate Investment - 2 Lakhs 15. SMP1 - VVVF Drive for LF Booster Fan - Savings in kWh, 8 Lakhs - Approximate Investment - 30 Lakhs 16. CSP mill - Reduction in Fuel Consumption from 24 to 22.3 (7% reduction) sm3/ton by reducing heat

losses and changing insulation in remaining 171 TF rolls - Savings in Sm3 COREX gas, 17 Lakhs - Approximate Investment – Nil

17. CSP mill - Waste Heat recovery - 4 MW - Savings in kWh, 320 Lakhs - Approximate Investment - 1600 Lakhs

18. COREX - Optimization of Energy consumption in ID fan and Mixing fan - Savings in kWh, 21.5 Lakhs - Approximate Investment - 20 Lakhs

19. COREX - FRP secondary water system merging with main secondary system. - Savings in kWh, 10 Lakhs - Approximate Investment - 10 Lakhs

20. COREX - Optimization of Energy consumption of Air conditioning pumps (AC) of Corex-1&2. - Savings in kWh, 2 Lakhs - Approximate Investment – Nil

21. COREX - Optimization of Energy consumption in Corex-1 &2 Cast house Dedusting system - Savings in kWh, 0.7 Lakhs - Approximate Investment – Nil

22. COREX - Modification in Corex-1 Cast house Dedusting dust bin chain conveyor - Savings in kWh, 0.6 Lakhs - Approximate Investment – Nil

23. COREX - Replacement of reversible conveyor with diverter gate in CDP - Savings in kWh, 1.68 Lakhs - Approximate Investment - Nil

24. 2 No’s pressure filters are installed in place of power intensive vacuum filters. Annual energy savings in KWH : 34.05 Lakhs

c) Impact ofmeasures at (a) and (b) above for reduction of energy conservation and on the cost ofproductionofgoods:

As mentioned in (a) & (b) above



35

B. TECHNOLOGY ABSORPTION: The Company has absorbed/in process of absorption of the following technologies obtained from various sources. Hazira facility:

Product Technologyfrom Year of import Statusofabsorption/adaptationHBI(Sponge Iron)

MIDREX Corpn.U.S.A./Voest Alpine, Austria

1989-90 Fully absorbed

HRC including DC-Electric Arc furnace, Continuous Caster and Hot Strip Mill

DC-Electric Arc furnace– Clecim, FranceContinuous Caster - SMS, Demag / SiemagHot Strip Mill - SMS, Siemag


HR Plate Mill SIEMENS VAI Metals Technologies SAS,


Reheating furnaces FIVE STEIN FRANCE, 2006-08 Fully absorbedHeat Treatment EBNER AUSTRIA 2007-08 Fully absorbedShot Blasting and painting line

USF, England 2007-08 Fully absorbed

Blast Furnace Unit MCC, China 2008-10 Fully absorbedCorex Unites SVAIC, Austria 2007-10 Fully absorbedHRC from Compact Strip Production (CSP) mill

SMS Siemag, Germany 2010-11 Fully absorbed

Twin Shell Conarc furnace SMS Demag 2008-11 Fully absorbedAir Separation Unit (1 & 2) ASU#1 - HOPM, China & 2- SSAB,

Sweeden2006-11 Fully adsorbed

Air Separation Unit no. 3 M/S Air Products, UK 2008-11 Fully adsorbed Vizagfacility:

Product Technologyfrom Year of import

Status of absorption /adaptation

Pellet Plant at Vizag Lurgi Traveling Grate Process

1993 Fully absorbed

High Gradient magnetic separator for the recovering Fe units from low grade ore of 45-50% Fe

M/s Metso 2012 Fully absorbed

Derrick screens for separating -150 Microns of tailing material M/s Derrick Corporation 2012 Fully absorbedCeramic Filters 3 Nos M/s. HuzhouHehui

Machinery co. Ltd2013 Fully absorbed

Electro Static Precipitator M/s Thermax India Ltd 2013 Fully absorbed Odisha facility:

Product Technologyfrom Year of import Statusofabsorption/adaptation

Pellet Plant at Odisha Aker Kverner, USA 2008-10 Fully adsorbed Pune facility:

Product Technologyfrom Year of import Statusofabsorption/adaptationColor Coating Line – 2 M/s Commenco 2012 Fully adsorbedContinuous Galvanizing Line – 2 M/s Crescent 2012 Fully absorbed

C. FOREIGNEXCHANGEEARNINGSANDOUTGO: I) TotalForeignexchangeusedandearned (` in Crore)

a) TotalForeignexchangeearned 2014-15(i) Foreign exchange directly earned through export 1,974.49(ii) Others 149.34TotalForeignexchangeearned 2,123.83

b) Totalforeignexchangeused(i) For import of plant & machinery/technical know-how 27.76(ii) Others including raw materials and interest 3,757.95TotalForeignexchangeused 3,785.71



ParticularswithrespecttoConservationofEnergy:FORMA

A. Power and Fuel Consumption

Sr. No.

Particulars Year 2014-15

Year 2013-14

1 Electricity a) Purchased

Unit (Lakhs) 33733 30301Total Amount (` in crores) 1456 1437Rate/Unit (`) 4.32 4.74

b) Own generation(i) Through diesel generator Unit (Lakhs) 16.36 1.04

Units per ltr. of diesel oil 1.06 1.18 Cost/Unit (`) 17.37 67.09

(ii) Through steam turbine / generator Unit (Lakhs) 953 2042 Units per ltr. of Fuel oil/Gas/Steam Coal 0.78 0.80 Cost/Unit (`) 4.49 4.08

(iii) Through gas turbine / generator Unit - against gas (Lakhs) 1128 1655 Units / SM3 of gas 1.26 3.95 Cost of fuel/Unit (`) 0.80 1.02(iv) Through third party on conversion-against gas-basis Unit (Lakhs) 499 4276 Units / SM3 of NGL/HSD/NG 3.68 4.15 Cost of fuel/Unit (`) (excluding fixed cost) 10.97 5.54

2 Coal (specify quality and where used) a) Steam Coal for power generation by CPP

Quantity (tones) 66432 147512Total Cost (` crs) 30.09 64.62Average Rate (`) 4529 4381

b) Anthracite Coal consumed as fuel for in duration Quantity (tones) 57556 69284Total Cost (` crs) 51 83Average Rate (`) 8833 12027

3 Furnace OilQuantity (k. ltrs) 60206 71554Total Cost (` Crs) 266 365 Average Rate (Net of Modvat) 44247 50949

4 OthersQuantity.(NG) - ’000 SM3 93726 106751Total Cost (` Crs) 231 258Rate/Unit 24.61 24.13

B. Consumption per unit of Production

ParticularsStandard (If any)

Currentyear

PreviousYear

Product: Beneficiated Concentrate Unit Per MTElectricity (Kwh) 37 26.40 30.32Others (specify) N.A. N.A. N.A.Product: Iron Oxide Pellets Unit Per MTElectricity (Kwh) 38 46.74 55.11Furnace Oil / LSHS (Ltrs) 16 18.92 17.67Anthracite Coal (Kgs) 17 15.54 15.18Coal (Steam coal on net generation) (Kgs) 0.72 17.01 32.48Others (specify) N.A. N.A. N.A.



37

ParticularsStandard (If any)

Currentyear

PreviousYear

Product: Hot Briquetted Iron Unit Per MTElectricity (Kwh) 125 213.26 203.21Other – NG (including Corex gas equivalent to NG) (SM3) 325 300.05 293.26Product: Liquid Steel Unit Per MTElectricity --- 831.45 805.27Other – NG (SM3) --- 27.35 29.64Product: Color Coated (ESPF) Unit Per MTPickling Line 8 5.58 5.49Cold Rolling Mill – l 135 81.14 90.93Cold Rolling Mill – ll 130 134.81 135.61Cold Rolling Mill – lll 110 94.01 99.12Galvanizing Line – l 85 56.84 54.37Galvanizing Line – ll 105 72.96 57.83Color Coating – l 70 60.97 60.88Color Coating – ll 280 62.54 63.47

FORMBRESEARCHANDDEVELOPMENT(R&D):The Company has a separate corporate level R&D department engaged in three broad areas of research: Raw materials, Process and product development. Each area is headed by the respective business CEOs as chairman, who reviews the projects periodically along with project teams. The Company’s R&D is governed by a council consisting of external experts of distinguished merit and ability. R&D Facilities (Current)A. RawMaterialResearch. Hot Sintering Machine Roller Briquetting Machine Column Floatation Unit Drum Pelletizer Disc Pelletizer Pot Pellet induration Simulator Mineral processing equipment for crushing, grinding and screening Shatter & Tumbler index testing apparatus Reduction degradation index/Reducibility testing apparatus Pellet cold crushing strength (CCS) testing unitB. Metallography Metallurgical Microscope (LIECA) Image Analyzer Systems (LIECA) Micro Hardness Testing (LIECA) SEM with EDAX & EBSD attachments (JEOL)C. Mechanicalandchemicaltesting Universal Testing Machine (UTM) Impact Toughness Testing Rockwell/Brinel/Vickers Hardness testing Hole Expansion Testing Machine



Hysteresis Loop Tracer Drop weight Tear Testing

D. CorrosionTesting HIC/SSCC Laboratory

R&DachievementsinFY14-15AccomplishmentProduct development projects successfully completed at Industrial trials stageSr. No. Project Title1. Development of Armour plates for defense (DMR1700)2. High strength steel plates Equivalent to Sumiten 600 in As rolled condition3. Specialty Hot Forming Steel for Auto4. Stretch Flangeable steel - HRFB600 for Auto5. GI Sheets with High coating (GSM 350 - 450) GI for solar panel/Grain Silos6. High Strength Steel for Automobiles Applications (700MC)7. Hot Forming Grade for Agricultural Machinery8. High Strength High Fatigue Steel (2)- S550MC & S700MC9. Development of High Strength PPGIProcess Projects successfully completed at industrial trials stageSr. Project Title1. UtilizationofEAF/LFslaginsintermakingasa)hearthlayer,b)replacementofflux.2. Developments of BF dust briquettes for recycling in steel melt shop as coolant.3. Briquettingofcolddirectreducediron(CDRI)finesforrecyclinginSteelMeltShop.4. Reduction of Hot Metal cost by usage of local high gangue Calibrated Lump Ore in Corex5. Vertical speed prediction model for sintering process.ProcessProjectssuccessfullycompletedatindustrialtrialsstageSr. Project Title1. UtilizationofEAF/LFslaginsintermakingasa)hearthlayer,b)replacementofflux.2. Developments of BF dust briquettes for recycling in steel melt shop as coolant.3. Briquettingofcolddirectreducediron(CDRI)finesforrecyclinginSteelMeltShop.4. Reduction of Hot Metal cost by usage of local high gangue Calibrated Lump Ore in Corex.5. Vertical speed prediction model for sintering process.Raw Material Projects commercialized at plant stageSr. Project Title1. OptimizingofBallingOperationandfurnacethermalprofiletoimprovephysicalandchemicalpropertiesofpellets.2. Study on reduction of % Crack in pellet at discharge port from current level of 18% to 15%3. Creosote oil usage as a replacement to the HFHSD for HAG’s and Preheaters of all auxiliary units of pellet process to

reduce cost on account of fuel.4. To test disintegration of the lumpy tails and their suitability for direct utilization in process to facilitate tails reduction

from tailing dam.5. Paste formation test works for Tails and its process handling.TECHNOLOGYABSORPTION,ADAPTATIONANDINNOVATION:Please refer table under the head TECHNOLOGY ABSORPOTION.



39

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF ESSAR STEEL INDIA LIMITEDReport on the Standalone Financial StatementsWe have audited the accompanying standalone financial statements of ESSAR STEEL INDIA LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.Management’s Responsibility for the Financial StatementThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.Auditors’ ResponsibilityOur responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.Basis for Qualified OpinionThe Company has recognised deferred tax asset of ` 1,879.07 Crore on unabsorbed depreciation and carried forward business losses based on future profitability projections made by the management as stated in Note 14 of the financial statements. In our opinion, after considering sub note (b) of the aforesaid note 14, out of the aforesaid deferred tax asset, ` 1,196.03 Crore does not meet the criteria of ‘virtual certainty supported by convincing evidence’ as required under Accounting Standard (AS) 22-Accounting for taxes on Income. Had the deferred tax asset amounting to ` 1,196.03 Crore not been recognized, accumulated losses would have been higher and the deferred tax asset would have been lower by ` 1,196.03 Crore. This matter was also qualified in our report on the financial statements for the year ended 31st March 2014.Qualified OpinionIn our opinion and to the best our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.Emphasis of MattersWe draw attention to the following matters in the Notes to the Financial Statements:1. Note 34 (c.1) regarding settlement of debts for

Trinity Coal Corporation, an indirect subsidiary of the Company, and the related exposure. For reasons explained in the Note, no provision has been made by the Company against the said exposure.

2. Note 49 regarding Company’s current liabilities exceeding its current assets by ` 7,023.55 Crore as at 31st March, 2015. The Company believes that for the reasons stated in the said Note, it will have adequate liquidity to meet its liabilities as and when they fall due.

3. Note 5 regarding long term loans including current maturities amounting to ` 1,417.72 Crore which have been considered as Non-Current for the reasons explained in the said Note.



4. Note no. 40 regarding accounting treatment of expenses incurred on the expanded facility at Hazira post completion but pending completion of integrated facility. For reasons explained in the Note, the Company has capitalized abnormal operating expenses amounting to ` 1,203.14 Crore incurred during the year related to this facility and not provided depreciation for the said facility for the period of from 1st April, 2014 to 30th March, 2015 as the said facility has been capitalized on 31st March, 2015. The Company has relied upon opinions received from eminent experts in the field of Accountancy confirming that this accounting treatment is in accordance with requirements of relevant Accounting Standards issued by the Institute of Chartered Accountants of India.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

Order 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that :

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) Attention is invited to Note 49 in the financial statements regarding Company’s plan of monetisation of identified assets to bridge the gap between current liabilities and current assets. In our opinion, the matters described in paragraph 2 and 3 under the Emphasis of Matters paragraph may have an adverse effect on the functioning of the Company if these plans do not fructify.

f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

g) The qualification relating to the maintenance of accounts with regard to Deferred Tax Asset is as stated in the Basis of Qualified Opinion paragraph above.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements vide Note 34.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. The Company is not required to transfer any amount to the Investor Education and Protection Fund.

For M. M. Chaturvedi & Co., Chartered Accountants

(Firm Reg. No. 112941W)

Madan Mohan ChaturvediPartner

Membership No. 031118Mumbai, 21st May, 2015

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORTThe Annexure referred to in our Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2015, we report that:(i) In respect of its fixed assets: (a) The Company has maintained proper records

showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all fixed assets



41

at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories: (a) As explained to us, the inventories were

physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and, during the course of our audit, we have not observed any major weaknesses in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

(vi) We have broadly reviewed the cost records made and maintained by the Company prescribed by the Central Government under Section 148 of the Act and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) 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, Employees’ State Insurance, Income-Tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-Tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(c) The Company is not required to transfer any amount to Investor Education and Protection Fund in accordance with relevant provisions of the Companies Act, 1956.

(d) Details of dues of Income-tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2015 on account of disputes are given below:

Sr. No. Name of the statute

Nature of dues Forum where dispute is pending

Period to which the amount relates

Amount disputed

(` in Crore)

Amount deposited

(` in Crore)

1 The Customs Act, 1962

Customs Duty Commissioner of Central Excise, Surat

2006 & 2007 186.17 186.17

Customs Duty Supreme Court 1991 66.81 NilCustoms Duty Commissioner

of Customs, Ahmedabad

Apr 12 - Dec 12 35.43 5.00

a) Customs Duty CESTAT, Bangalore 1998-99

18.46 Nilb) Penalty 20.00 Nila) Customs Duty

CESTAT, Mumbai 2004-05 4.42 Nilb) Penalty 4.42 NilCustoms Duty 2011-12 2.15 NilCustoms Duty High Court,

Hyderabad1995 1.32 Nil

Customs Duty CESTAT, Mumbai 2008-09 0.12 Nil






Amount disputed

(` in Crore)

Amount deposited

(` in Crore)

2 Central Excise Act, 1944

a) Excise DutyCESTAT, Delhi Sep 2007 - Oct 2007

37.64 -

b) Penalty 37.64 -Excise Duty Gujarat High Court June 1995 - Sep

199733.32 1.81

a) Excise DutySupreme Court July 2000 to June

2005

21.03 8.00

b) Penalty 20.63 -a) CENVAT credit CESTAT, New

DelhiMarch 2006 to

July 20101.87 Nil

b) Penalty 1.87 Nila) CENVAT credit

CESTAT 2006-20111.50 0.05

b) Penalty 1.50 NilExcise Duty Asst. Comm. of

CentralExcise, Div. - IV, Surat

March 2004 1.98 Nil

a) Excise Duty CESTAT, Ahmedabad September 2005

0.72 0.57b) Penalty 0.72 NilExcise Duty Joint

Commissioner, CESTAT

2002 to 2004 0.60 Nil

a) Excise Duty Commissioner Appeal 2010-11

0.27 Nilb) Penalty 0.13 Nila) CENVAT credit Commissioner of

Central Excise, Vadodara

Dec 10-Aug 110.05 Nil

b) Penalty 0.05 Nil

3 Finance Act,1994 (Service Tax)

Service tax CESTAT-Mumbai 2006-07 0.89 Nila) Service tax Commissioner

(Appeals), VizagJune, 2007 to

September, 20110.11 Nil

b) Penalty 0.11 Nil4 The Gujarat

Sales tax Acta) Sales Tax Joint

Commissioner of sales tax

April 2005 - March 2006

10.22 2.56b) Penalty 15.33 Nil

Sales Tax Joint commissioner of sales tax

1998-1999 1.36 Nil


1997 to 1999 1.08 Nil

Sales Tax Gujarat VAT Tribunal

1994-1995 0.90 0.05

Sales Tax Joint Commissioner

1995-96 0.75 Nil

Sales Tax Joint Commissioner

2000-01 0.49 Nil



43




Amount disputed

(` in Crore)

Amount deposited

(` in Crore)

5 Orissa Value Added Tax Act, 2004

Entry Tax SC of India April 2008 to November 2012 14.75 7.38

6 The Central Sales Tax Act Sales Tax STAT 2004-05 0.46 0.22

7 AP VAT Act Sales Tax STAT 2005-06 to 2008-09 0.13 NilAP High Court Sep 13 - Oct 13 0.20 0.05

(viii) Based on the financial statements of the Company for the year ended 31st March 2015, the Company’s accumulated losses, at the end of the financial year are less than fifty per cent of its net worth. The Company has not incurred cash losses during the financial year covered by our audit but had incurred cash losses in the immediately preceding financial year.

(ix) The company has delayed the repayment of certain dues to financial institutions, banks and debenture holders during the year which have generally been regularised within 90 days. Further, as against dues on account of outstanding interest of ` 414.19 Crore and principal of ` 126.75 Crore, pertaining to the period ended 31st March 2015, the Company has since paid interest amount of ` 228.61 Crore and repaid principal amount of ` 40.93 Crore.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the company during the year for the purposes for which loans were obtained other than temporary deployment pending application.

(xii) To the best of our knowledge and according to the information and explanation given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.




Membership No. 031118Mumbai, 21st May, 2015



(` in Crore)Note No.

As at 31st March, 2015


Equity and LiabilitiesShareholders’ Funds

Share Capital 3 3,153.23 2,869.22 Reserves and Surplus 4 10,959.43 5,614.78

14,112.66 8,484.00 Non Current Liabilities

Long Term Borrowings 5 22,476.93 28,496.73 Other Long Term Liabilities 6 7,840.85 5,066.71 Long Term Provisions 7 263.80 603.56

30,581.58 34,167.00 Current Liabilities

Short Term Borrowings 8 4,681.38 1,316.46 Trade Payables 9 6,679.60 7,136.27 Other Current Liabilities 10 7,351.51 3,903.23 Short Term Provisions 11 375.56 401.20

19,088.05 12,757.16 TOTAL 63,782.29 55,408.16

AssetsNon Current Assets

Fixed Assets 12 46,596.64 41,444.47 Non Current Investments 13 1,275.67 1,154.43 Deferred Tax Assets (net) 14 2,086.40 2,559.04 Long Term Loans and Advances 15 694.75 718.23 Other Non Current Assets 16 1,064.33 1,110.82

51,717.79 46,986.99 Current Assets

Inventories 17 2,689.65 3,263.04 Trade Receivables 18 1,276.54 1,156.98 Cash and Bank Balances 19 767.18 729.49 Short Term Loans and Advances 20 3,211.74 3,070.75 Other Current Assets 21 4,119.39 200.91

12,064.50 8,421.17 TOTAL 63,782.29 55,408.16

Notes to Financial Statements form an integral part of the Balance Sheet.

Balance Sheet as at 31st March, 2015

In terms of our report of even date attached For and on behalf of the Board of Directors of Essar Steel India Limited

For M. M. Chaturvedi & Co.,Chartered Accountants

Madan Mohan Chaturvedi Firdose A. Vandrevala Dilip OommenPartner Executive Vice Chairman Managing Director & CEO

Place : Mumbai Mahadev Iyer Rakesh DarjiDate : 21st May, 2015 Director Finance & CFO Company Secretary



45






Year Ended 31st March, 2015


IncomeRevenue from Operations 22 14,984.31 14,352.66 Less : Excise Duty 1,050.73 1,025.78 Revenue from Operations (Net) 13,933.58 13,326.88Other Income Profit on Sale of Business Undertaking 23 2,793.04 - Other Income 23(a) 435.77 1,021.67

3,228.81 1,021.67 17,162.39 14,348.55

ExpensesCost of Materials Consumed 24 7,785.94 7,662.16 Purchase of Traded Goods 25 297.80 668.05 Energy Cost 26 1,795.57 2,487.11 Decrease in Inventories of Finished Goods, Work in Progress and Stock in Trade

27 438.40 266.24

Employee Benefits Expenses 28 334.40 355.69 Other Expenses :

Manufacturing & Asset Maintenance 29 438.68 420.13 Administrative Expenses 30 219.72 153.75 Selling & Distribution Expenses 31 462.39 466.99

11,772.90 12,480.12 Profit before Finance Costs, Exchange Variation and Derivative Losses, Depreciation /Amortisation, Exceptional/Prior Period Items and Tax

5,389.49 1,868.43

Finance Costs 32 3,865.01 4,176.70 Exchange Variation and Derivative Losses (net) 33 382.44 540.56 Depreciation / Amortisation Expense 807.75 1,067.38 Profit / (Loss) before Exceptional/Prior Period Items and Tax

334.29 (3,916.21)

Reversal of Depreciation Provision - [Refer Note 2.1(a)] 586.68 - Prior Period Income 87.99 1,601.47 Profit / (Loss) before Tax 1,008.96 (2,314.74)

Tax Expense/ (Benefit) (Excess)/Short provision of earlier years (Net) (16.87) - Deferred Tax Charge / (Credit) 377.78 (717.60)Profit / (Loss) after Tax for the year 648.05 (1,597.14)

Earning/(Loss) per Share (in Rupees)Basic [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]

2.26 (5.70)

Diluted [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]

2.26 (5.70)

Notes to Financial Statements form an integral part of the Statement of Profit and Loss.

Statement of Profit and Loss for the year ended 31st March, 2015



(` in Crore)Year Ended

31st March, 2015Year Ended

31st March, 2014A. Cash Flow from Operating Activities

Net Profit/(Loss) before Taxation 1,008.96 (2,314.74)Adjustments for -Depreciation / Amortisation 807.75 1,067.38 Profit on Sale of Business Undertaking (2,793.04) - (Profit) / Loss on Sale/Write off of Fixed Assets (net) 1.93 0.73 Reversal of Depreciation Provision (586.68) - Prior Period Items Expense/(Income) (87.99) (1,601.47)(Profit)/Loss on sale of Non Current Investment (121.44) - Finance Costs 3,865.01 4,176.70 Exchange Variation & Derivatives (Net) 261.97 406.50 Interest on Deposit with Banks and Others (157.00) (139.04)Liabilities / Provision no longer required written back (net) (9.32) (131.84)Dividend Income - Trade Long Term Investment (0.34) (0.34)

1,180.85 3,778.62 Operating Profit before Movements in Operating Assets and Liabilities 2,189.81 1,463.88 Movements in Operating Assets and Liabilities:Increase/(Decrease) in Other Long Term Liabilities (3,042.61) 2,996.36 Increase in Trade Payables 133.50 577.60 Increase/ (Decrease) in Other Current Liabilities 3,497.67 (47.49)(Decrease) in Long Term Provisions (4.42) (2.19)Increase /(Decrease) in Short Term Provisions (1.81) 0.16 Decrease in Inventories 573.39 584.48 (Increase) in Trade Receivables (108.72) (490.00)(Increase) / Decrease in Short Term Loans and Advances 117.68 (361.64)(Increase) / Decrease in Other Non Current Assets (42.34) 5.86 (Increase) / Decrease in Other Current Assets 0.46 53.94

1,122.80 3,317.08 Cash Generated from Operations 3,312.61 4,780.96 Direct Taxes (Paid)/Refunded (net) 1.96 (6.53)Net Cash Generated from Operating Activities 3,314.57 4,774.43

B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets, including Intangible Assets, Capital Work in Progress, Capital Advances and Trial Run Profits/Loss

(1,821.47) (1,365.41)

Proceeds from Sale of Fixed Assets 113.21 0.06 Proceeds from Sale of Non Current Investments in Associates 286.00 - Proceeds from redemption of Non Current Investments 0.78 - Purchase of Non Current Investments (including Share Application Money) : In Subsidiaries (115.58) (196.01) In Associates (43.87) - Others (0.30) (9.46)Dividend Income from Long Term Investments 0.34 0.34 Interest Income 72.11 388.47 Inter Corporate Deposit Given (Net) (240.28) 142.20 Refund of Deposit Placed with Banks 26.60 (5.37)Net Cash used in Investing Activities (1,722.46) (1,045.18)

Cash Flow Statement for the year ended 31st March, 2015



47



31st March, 2014C. Cash Flow from Financing Activities

Proceeds from Issuance of Share Capital 1,283.71 124.09 Proceeds from Borrowings 18,093.83 18,910.66 Repayment of Borrowings (22,135.83) (18,766.10)Advance against Export Performance Bank Guarantee 5,995.80 1,148.83 Finance Cost Paid (4,529.56) (4,421.76)Exchange Variation & Derivatives (net) (241.58) (623.70)Repayment of Finance Lease Liabilities (1.20) (0.77)Net Cash Generated from Financing Activities (1,534.83) (3,628.75)Net Increase in Cash and Cash Equivalents 57.28 100.50

Cash and Cash Equivalents at the beginning of the year (see Note 3 below)

193.41 92.91

Cash and Cash Equivalents at the end of the year (see Note 3 below)

250.69 193.41

Net Increase in Cash and Cash Equivalents 57.28 100.50

Notes1 The above Cash Flow Statement has been prepared under the ‘Indirect method’ as set out in the Accounting Standard–3 on

Cash Flow Statements, issued by the Institute of Chartered Accountants of India.2 Previous year’s figures have been regrouped where necessary to conform to this year’s classification. 3 Cash and Cash Equivalents included in the Cash Flow Statement comprise the following balance sheet amounts:

(` in Crore)



Cash and Cash Equivalents (Refer Note 19 (A)) 250.14 193.81 Less: Exchange Variation Gain (0.55) 0.40 Cash and Cash Equivalents at the end of the year 250.69 193.41

Cash Flow Statement for the year ended 31st March, 2015







Notes to Financial Statements for the year ended 31st March, 2015Notes to Accounts1. Nature of Operations The Company owns and operates an integrated steel manufacturing facility comprising the unit for manufacturing of

flat rolled products at Hazira – District Surat, a Precoated facility at Pune, a Beneficiation Plant at Kirandul, Slurry Pipeline, Pelletisation Plant at Vizag and at Paradeep. The Company is also in the process of setting up a Beneficiation Plant at Dabuna (Odisha) and another Pelletisation Plant at Paradeep. The Company also operates Processing and Distribution centers, Hypermarts and Express Marts at various locations across India.

2. Basis of Preparation The Financial Statements have been prepared to comply in all material aspects with the Accounting Standards notified

under Section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, other generally accepted accounting practices prevalent in India and the relevant provisions of the Companies Act, 2013 and rules framed thereunder. The Financial Statements have been prepared under the historical cost convention, except as stated elsewhere and on accrual basis. The accounting policies have been consistently applied by the Company and, unless specified otherwise, are consistent with those used in the previous year.

2.1 Statement of Significant Accounting Policies (a) Change in Accounting Policy The Company has changed its method of providing depreciation on fixed assets from the written down value

method to the straight line method (except for plant and machinery and railway sidings which were already being depreciated on straight line method), from the date of assets coming into use up to 31st March, 2014, at the rates prescribed in Schedule XIV to the Companies Act, 1956, and for the period from 1st April, 2014 onwards, on the basis of useful life of assets as prescribed under Schedule II to the Companies Act, 2013. The management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets. Had the Company continued to use the earlier method of depreciation, the profit before tax for current year would have been lower by ` 636.32 Crore (including ` 586.68 Crore for the period up to 31st March, 2014).

(b) Use of Estimates The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles in India

requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year. The Management believes that these estimates are prudent and reasonable and are based upon the Management’s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

(c) Tangible and Intangible Assets Tangible and intangible assets are stated at cost or at revalued amounts, less accumulated depreciation,

amortisation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready for their intended use. Fair market value is determined by an Independent Chartered Engineer & Valuer.

In respect of accounting periods commencing on or after 7th December, 2006, exchange differences arising on reporting of the long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in the previous Financial Statements are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, if these monetary items pertain to the acquisition of a depreciable fixed asset.

(d) Capital Work-In-Progress All expenditure, including interest cost during the project construction period, are accumulated and presented

as Capital Work-In-Progress until the assets are ready for intended use. Assets under construction are not depreciated. Income earned from investments of surplus borrowed funds during the construction/trial run period is reduced from Capital Work-In-Progress. Expenditure/Income arising during trial run is added to/reduced from Capital Work-In-Progress. Interest cost is not added to capital work in progress in case of project which are completed individually but not as part of an intended integrated facility.



49

Notes to Financial Statements for the year ended 31st March, 2015 (e) Expenditure on Substantial Expansion All direct capital expenditure on expansion are capitalised. As regards indirect expenditures on expansion, only

that portion of expenditure is capitalised that is attributable to the expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.

(f) Depreciation and Amortisation (i) Tangible Assets Tangible assets are depreciated as per the useful life specified in Schedule II to the Companies Act,

2013 except Plant & Machinery which is as per useful life assessed by an independent Chartered Engineer & Valuer on straight-line method. Depreciation on additions to / deletions from fixed assets is provided on pro-rata basis from the date of such addition and up to the date of deletion as the case may be. Depreciation on additions to assets due to exchange variation is provided over the remaining useful life of the assets. Depreciation is provided on individual project only after commencement of commercial production from intended integrated facility, to which such project belongs.

The difference in useful lives of Plant and Machinery as per Companies Act, 2013 and as assessed by Independent Chartered Engineer & Valuer (who has assessed useful life after taking into account review of physical status of asset, usage of asset in terms of capacity or physical output, physical wear and tear which depends on operational factors such as the number of shifts for which the asset is to be used and the repair and maintenance program and the care and maintenance of the asset, while idle, technical or commercial or commercial obsolescence arising from changes or improvement in production, or from a change in the market demand for the product or service output of the asset) is highlighted below:

Plant & Machinery Useful life as per Companies Act, 2013

(Years)

Average useful life as per Technical Evaluation

(Years)Sinter Plant,Rolling Mill and Blast Furnace 20 30

Power Generation Plant 40 30

Others 25 30

(ii) Intangible Assets Costs relating to softwares, which are acquired, are capitalised and amortised on straight-line method

over estimated useful life of 5 to 6 years.

(g) Impairment of Assets (i) The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of

impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(ii) If impairment loss is provided, depreciation is calculated on the revised carrying amount of the assets over its remaining useful life.

(h) Revenue Recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the

revenue can be reliably measured.

Sale of Goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the

buyer. Sales is disclosed net of quality claims and rebates. Excise Duty deducted from the gross turnover is the amount of excise duty that is included in the amount of turnover (gross) and not the entire amount of liability arising during the year.

Export Benefits Export benefits are accounted for in the year of exports based on eligibility and where there is certainty of

realising the same.



Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate

applicable.

Dividends Revenue is recognised when the shareholders’ right to receive payment is established by the balance sheet

date. (i) Taxes on Income Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected

to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets and Deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relates to the taxes on income levied by same governing taxation laws. Deferred tax assets other than those arising from carry forward losses and unabsorbed depreciations, are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred Tax Assets arising from unabsorbed depreciation and/or carried forward tax losses, are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises, unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realised.

(j) Inventories Raw Materials, Production Consumables, Stores & Spares are valued at lower of cost and net realisable value.

However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold above cost. Cost is determined on a Weighted Average basis. Work-in-Progress and Finished Goods is valued at lower of cost and net realisable value. Cost includes direct material, labour and a proportion of manufacturing and administrative overheads based on normal capacity. Value of finished goods also includes excise duty. Net realisable value is the estimated selling price in the ordinary course of business less estimated cost of completion and cost to make the sale.

(k) Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current

investments. All other investments are classified as non current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non current investments are carried at cost. However, provision for diminution in value, if any, is made to recognise a decline other than temporary in the value of such investments.

(l) Foreign Currency Transactions (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency

amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Measurement of Foreign Currency Monetary Items at Balance Sheet Date Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items

which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Notes to Financial Statements for the year ended 31st March, 2015



51

(iii) Treatment of Exchange Differences Exchange differences, in respect of accounting periods commencing on or after 7th December, 2006,

arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous Financial Statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” in the Financial Statements and are amortised over the balance period of such long-term asset/liability.

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous Financial Statements, are recognised as income or as expenses in the statement of profit and loss in the year in which they arise.

(iv) Forward Exchange Contracts not intended for Trading or Speculation Purposes The premium or discount arising at the inception of forward exchange contracts is amortised as expense

or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(m) Earnings Per Share Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity

shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(n) Provisions, Contingent Liabilities and Contingent Assets A provision is recognised when there is a present obligation in respect of which a reliable estimate can be made

as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Contingent liabilities are not recognised but disclosed in the notes to the Financial Statements. Contingent assets are neither recognised nor disclosed.

(o) Cash and Cash Equivalents Cash and cash equivalents in the Balance Sheet comprise cash in hand and at bank in current accounts.

Margin deposits and term deposits, which are not pledged, with an original maturity of three months or less are considered as cash equivalent.

(p) Derivative Instruments The Company uses principal only swap (POS) contracts to hedge risks associated with foreign currency

fluctuations relating to highly probable forecasted transactions. The Company designates certain POS contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in Accounting Standard 30 – Financial Instruments: Recognition and Measurement. These POS contracts are stated at fair value at each reporting date. Changes in the fair value of these POS contracts that are designated and effective as hedges of future cash flows are recognised directly in Hedging Reserve Account under Reserves and Surplus (net of applicable deferred income taxes) and the ineffective portion is recognised immediately in the Statement of Profit and Loss. Amounts accumulated in Hedging Reserve Account are reclassified to Statement of Profit and Loss in the same periods during which the forecasted transaction affects Statement of Profit and Loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognised in Hedging Reserve Account is retained there until the forecasted transactions occur. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in Hedging Reserve Account is immediately transferred to the Statement of Profit and Loss.

Mark to market losses on all other derivative contracts, other than forward contracts accounted under Accounting Standard 11 “Effects of changes in foreign exchange rates” as per (l) (iv) above, outstanding at the balance sheet date are recognised in the Statement of Profit and Loss based on the principle of prudence as provided in AS1-”Disclosure of accounting policies”.




(q) Employee Benefits (i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions

are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

(ii) Gratuity liability are defined benefit obligations and are provided for on the basis of an independent actuarial valuation on projected unit credit method made at the end of each financial year.

(iii) Provision for compensated absences and their classifications between current and non current liabilities are based on independent actuarial valuation. The actuarial valuation is done as per projected unit credit method.

(iv) Actuarial gains/losses are immediately taken to Statement of Profit and Loss. (r) Central Value Added Tax (CENVAT) CENVAT claimed on capital goods is reduced from the cost of plant and machinery/capital work-in-progress.

CENVAT claimed on purchases of raw material and other materials is reduced from the cost of such materials. (s) Borrowing Costs Borrowing cost in ordinary course of business is recognised as an expense in the period in which these are

incurred. Borrowing costs that are attributable to the acquisition/ construction of qualifying assets are capitalised as part of cost of such asset up to the date the assets are ready for their intended use. However borrowing cost is not capitalised for projects which are completed individually but not as part of an intended integrated facility.

(t) Leases (i) Where the Company is the Lessee Lease rentals in respect of finance lease arrangements entered up to 31st March, 2001 are segregated

into cost of the asset and interest components by applying an implicit internal rate of return. The cost component is amortised over the useful life of the asset and the interest component is recognised in the Statement of Profit and Loss. Lease payments in excess of the charge for the year are treated as prepaid lease rentals wherever agreement is existing and in other cases it has been added to the carrying cost of the fixed assets.

Finance leases entered on or after 1st April, 2001, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

(ii) Where the Company is the Lessor Assets subject to operating lease are included in fixed assets. Lease income is recognised in the

Statement of Profit and Loss on a straight line basis over the lease term. Costs including depreciation are recognised as an expense in the Statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Statement of Profit and Loss.

(u) Mining, Exploration and Development Expenditure Expenditure in respect of mineral, exploration and evaluation is charged to the Statement of profit and loss as

incurred except in following cases where it is capitalised: • it is expected that the expenditure will be recouped by future exploitation or sale; or • substantial exploration and evaluation activities have identified a mineral resource but these activities

have not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves

(v) Employee Stock Compensation Cost Measurement and disclosure of the employee share-based payment plans is done in accordance with the

Guidance Note on Accounting for Employee Share-based Payments, issued by ICAI.




53

The Company measures compensation cost relating to employee stock appreciation rights as Cash Settled Scheme using the fair value method. Compensation expense is amortised over the vesting period of the option on a straight line basis. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured if there are material changes in assumption, with any changes in fair value recognised in Statement of Profit and Loss for the year.

(w) Measurement of EBIDTA The company has elected to present earnings before finance costs, exchange variation and derivative losses,

depreciation and amortisation expenses and taxes (EBIDTA) as a separate line item on the face of the Statement of Profit and Loss. The company measures EBIDTA on the basis of Profit /(Loss) from the continuous operations and does not include finance costs, exchange variation and derivative losses, depreciation and amortisation expenses, exceptional and extra ordinary items and taxes.

3 Share Capital (` in Crore)



Authorised

7,175,000,000 (Previous Year 7,175,000,000) Equity Shares of ` 10 each 7,175.00 7,175.00

100,000,000 (Previous Year 100,000,000) 10% Cumulative Redeemable Preference Shares of ` 10 each

100.00 100.00

7,275.00 7,275.00

Issued, subscribed and fully paid-up

3,108,957,660 (Previous Year 2,824,951,352) Equity Shares of ` 10 each 3,108.96 2,824.95

Add: 4,520,703 (Previous Year 4,520,703) Equity Shares Forfeited 0.67 0.67

3,109.63 2,825.62

43,598,951 (Previous Year 43,598,951) 10% Cumulative Redeemable Preference Shares of ` 10 each

43.60 43.60

3,153.23 2,869.22

a) Reconciliation of number of shares and amount outstanding at the beginning and at the end of the reporting period:

31st March, 2015 31st March, 2014Number ` in Crore Number ` in Crore

Equity SharesAt the beginning of the year 2,824,951,352 2,824.95 2,797,534,656 2,797.53Issued during the year 284,006,308 284.01 27,416,696 27.42

Outstanding at the end of the year 3,108,957,660 3,108.96 2,824,951,352 2,824.95Preference SharesAt the beginning of the year 43,598,951 43.60 43,598,951 43.60Outstanding at the end of the year 43,598,951 43.60 43,598,951 43.60

b) Rights, preferences and restrictions attached to shares

Equity Shares

The Company has one class of Equity Shares having face value of ` 10 per share. Every shareholder is entitled to one vote for every one share held. In the event of liquidation, the equity share holders shall be entitled to receive remaining assets of the Company after distribution of all dues in proportion to their shareholdings.




Cumulative Redeemable Preference Shares (CRPS)

The Company has issued 43,598,951 10% CRPS of ` 10 each. Each CRPS is redeemable at par in 12 equal monthly installments commencing from 1st October, 2017 to 1st September, 2018. The Company shall have option to redeem the CRPS at par in one or more tranches from any or all of the existing holders, anytime after the date of allotment together with arrears of dividend if any and the Board shall give one month’s notice for any such redemption to the registered holders of the CRPS.

Arrears of fixed dividend on Cumulative Redeemable Preference Shares as at 31st March 2015 is ` 20.40 Crore (Previous Year 15.30 Crore).

c) Shares held by Holding Company

Out of above equity shares, 2,153,587,448 equity shares (Previous year 2,108,864,699) are held by Essar Steel Asia Holdings Limited, Mauritius the holding Company.

d) Details of shareholders holding more than 5% shares in the Company



Number % of Holding Number % of HoldingEquity SharesEssar Steel Asia Holdings Limited1 2,153,587,448 69.27 2,108,864,699 74.65Imperial Consultants & Securities Private Limited 629,656,758 20.25 434,452,284 15.38Shares under Trust (Venkatraman Govind Raghavan) 191,517,500 6.16 191,517,500 6.78

2,974,761,706 95.68 2,734,834,483 96.81 1. Number of shares includes 492,485,501 shares acquired from Essar Steel Limited, Mauritius for which transfer

of shares in demat account is pending and in respect of such shares Essar Steel Asia Holdings Limited (ESAHL) has made necessary declaration under Section 187C of erstwhile Companies Act, 1956 (Now Section 89 of Companies Act, 2013) regarding beneficial ownership of such shares.



Number % of Holding Number % of HoldingPreference SharesIFCI Limited 22,116,599 50.73 22,116,599 50.73Imperial Consultants & Securities Pvt Limited 16,940,180 38.85 16,940,180 38.85

39,056,779 89.58 39,056,779 89.58

e) Aggregate number of Bonus Shares issued, shares issued for consideration other than cash and shares bought back during the period of five years :



Number Number

Equity shares allotted as fully paid up pursuant to scheme of Amalgamation 1,073,249,784 1,073,249,784




55

4 Reserves and Surplus (` in Crore)As at

31st March, 2015As at

31st March, 2014Capital Reserve 12.73 12.73 Capital Redemption Reserve 202.92 202.92 Securities Premium Account Balance as per last Balance Sheet 6,814.91 6,718.24 Add: Premium on shares issued during the year 999.70 96.67 Closing Balance 7,814.61 6,814.91 Revaluation Reserve Opening Balance 3,080.06 - Addition during the year 3,519.29 3,080.06 Less : Depreciation transferred to retained earnings 161.54 - Closing Balance 6,437.81 3,080.06 Hedging Reserve (Net of deferred tax) Balance as per last Balance Sheet (590.85) (418.39) Add : Effect of foreign exchange rate variations on Hedging

Instruments outstanding at the end of the year (11.06) (206.63)

Less : Transferred to Statement of Profit and Loss 240.90 34.16 Closing Balance (361.01) (590.86)General Reserve 77.51 77.51 Foreign Currency Monetary Item Translation Difference Account Balance as per last Balance Sheet (57.21) (3.16) Add : Effect of foreign exchange rate variations during

the year (29.41) (65.95)

Less: Transferred to Statement of Profit and Loss during the year

11.77 11.90

Closing Balance (74.85) (57.21)Surplus/ (Deficit) in statement of Profit and Loss Balance as per last Balance Sheet (3,925.28) (2,328.14) Add : Net Profit/ (Loss) for the Year 648.05 (1,597.14) Add : Written down value of Fixed Assets (Net of deferred

tax)* (34.60) -

Add: Transfer from Revaluation Reserve 161.54 - Closing Balance (3,150.29) (3,925.28)

10,959.43 5,614.78

* Assets whose useful life has expired as on 1st April, 2014 has been transferred to opening retained earnings as per Companies Act 2013.

5 Long Term Borrowings (Refer Note 51) (` in Crore)As at


31st March, 2014Secured3,120 (Previous Year 3,200) Non Convertible Debentures of ` 1,000,000 each

312.00 320.00

Term Loans* From Banks 19,445.88 24,604.21 From Others 1,424.34 1,573.59 Buyers Credit for Capital Expenditure 51.12 474.74

21,233.34 26,972.54




(` in Crore)As at


31st March, 2014UnsecuredDollar / Rupee Notes From Banks 208.65 208.18 From Others 1.28 2.13 Sales Tax Deferral Loan 33.32 33.88 Long term maturities of Finance Lease obligations - 0.63 Inter Corporate Deposits From Related Parties 690.34 1,117.09 From Others 310.00 162.28

1,243.59 1,524.19 22,476.93 28,496.73

*Including ̀ 1417.72 Crore from out of current maturities considered as non current, on the basis, that the company proposes to repay aforesaid amount by utilising expected long term export advances under EPBG (Export Performance Bank Guarantees) as per limits sanctioned by RBI and Banks. The Company has sought clarification from Reserve Bank of India (RBI) on the applicability of its circular dated 6th April, 2015, which restricts banks from issuing EPBG, as it had obtained specific approval dated 23rd May, 2013 from RBI up to USD 2 Billion under EPBG scheme to repay Rupee Loans. Simultaneously, the Company is in discussion with its banks to structure its project loans under the “5/25 scheme” of RBI extended to existing project loans of core industries vide its circular dated 15th December, 2014 which would extend the loan repayment period upto 20 years and thus substantially reduce the repayment obligation in year 2015-16 from the present level.

6 Other Long Term Liabilities (` in Crore)As at


31st March, 2014Acceptances for Capital Goods - 80.35 Advance against Sale of Business Undertaking 750.00 750.00 Advances from Customers Secured against Export Performance Bank Guarantee* 7,063.93 1,105.75 Others - 2,989.49

7,063.93 4,095.24Security Deposit Received - 53.12 Interest Accrued 26.92 88.00

7,840.85 5,066.71

*Advance against Export Performance Bank Guarantee (including Advance against Export Performance Bank Guarantee in Other Current Liabilities) are secured by Bank Guarantee issued from Banks/Financial Institutions which has a charge on the Company’s assets.

7 Long Term Provisions (` in Crore)As at


31st March, 2014Provision for employee benefits Gratuity (Refer Note 39) 23.29 15.00 Compensated absences 20.65 33.36 Provision on Derivative Contracts 219.86 555.20

263.80 603.56

8 Short-Term Borrowings (` in Crore)As at


31st March, 2014Secured (Refer Note 51)Short Term Loans from Banks 100.00 - Working Capital Loans from Banks 2,026.02 377.69 Buyers' Credit for Operational Expenditure 1,084.16 683.40 Buyers Credit for Capital Expenditure - 28.37

3,210.18 1,089.46




57

(` in Crore)As at


31st March, 2014UnsecuredInter Corporate Deposits from related parties 1,373.44 227.00 from Others 97.76 -

4,681.38 1,316.46

9 Trade Payables (` in Crore)

As at31st March, 2015


Trade Payables for Goods and Expenses 3,654.80 3,647.76 Acceptance for Goods and Expenses 3,024.80 3,488.51

6,679.60 7,136.27

10 Other Current Liabilities (` in Crore)As at


31st March, 2014Current maturities of Long-Term debt (Refer Note 51) [including installments due at the year end ` 171.39 Crore (Previous Year ` 506.11 Crore)]

1,250.05 1,606.28

Current maturities of Finance Lease Obligations 0.63 1.20 Creditors for Capital Expenditures 263.24 333.55 Acceptance for Capital Expenditures 36.14 250.63 Interest accrued and due on Borrowings 651.09 266.71 Interest accrued but not due on Borrowings 290.93 477.24 Interest accrued on Other Liabilities 100.91 17.06 Advances from Customers 4,184.27 532.57 Advance against Export Performance Bank Guarantee (Refer note 6)

259.14 43.08

Security Deposits Received 5.42 25.00 Statutory Liabilities 151.54 184.97 Credit Balance of Current Account 26.26 121.19 Other Liabilities 131.89 43.75

7,351.51 3,903.23

11 Short Term Provisions (` in Crore)As at


31st March, 2014Provision for Compensated Absences 5.28 7.09 Provision for Indirect Taxes (Refer Note 50) 19.73 19.73 Provision on Derivatives Contracts 350.55 374.38

375.56 401.20

12 Fixed Assets (` in Crore)As at


31st March, 2014Tangible Assets (net of depreciation) 41,989.97 14,125.78 Intangible Assets (net of amortisation) 24.31 23.91 Capital Work-in-Progress (Refer Note 47) 4,582.36 27,294.78

46,596.64 41,444.47




Fixe

d A

sset

s(`

in C

rore

)

Gros

s Bloc

kDe

prec

iation

/Amo

rtisa

tion

Net B

lock

Desc

riptio

nAs

at

1st Apr

il 20

14

Addit

ions

durin

g the

ye

ar

Delet

ions /

Adjus

tmen

t du

ring t

he ye

ar

As at

31

st Mar

ch

2015

As at

1st A

pril 2

014

For t

heYe

arOn

delet

ions /

Ad

justm

ent

Trf t

o Re

taine

d Ea

rning

As at

31

st Mar

ch

2015

As at

31

st Mar

ch

2015

As at

31

st Mar

ch

2014

Tang

ible A

ssets

Free

hold

Land

3,59

4.47

3.70

-

3,59

8.17

- -

- -

- 3,

598.1

7 3,

594.4

7 Le

aseh

old La

nd 81

.24

- 20

.46

60.78

3.

41

0.82

0.

90

- 3.

33

57.45

77

.83

Build

ings

2,60

7.21

1,50

1.99

- 4,

117.6

2 1,

280.5

7 92

.61

545.9

7 24

.19

851.4

0 3,

266.2

2 1,

326.6

4 Le

aseh

old B

uildin

g 2.

34

- -

2.34

0.

22

0.04

-

- 0.

26

2.08

2.

12

Plan

t and

Mac

hiner

y 18

,415.1

5 26

,580.5

4 46

.84

44,94

8.85

9,35

8.76

685.1

2 43

.92

20.45

10

,020.4

1 34

,928.4

4 9,

056.3

9 Le

aseh

old P

lant a

nd M

achin

ery

7.92

-

- 7.

92

2.21

0.

18

- -

2.39

5.

53

5.71

Fu

rnitu

re an

d Fixt

ures

38.77

1.

58

0.05

40

.30

27.20

6.

09

10.90

0.

04

22.43

17

.87

11.57

Of

fice E

quipm

ent

27.21

3.

40

- 30

.61

13.22

5.

53

3.86

4.

82

19.71

10

.90

13.99

Co

mpute

rs 10

2.83

3.22

0.

07

105.9

8 87

.57

7.07

6.

82

2.52

90

.34

15.64

15

.26

Vehic

les 20

.00

0.27

0.

55

19.72

14

.27

2.17

4.

17

0.08

12

.35

7.37

5.

73

Ships

and V

esse

ls 16

.90

- -

16.90

5.

03

0.57

2.

78

- 2.

82

14.08

11

.87

Railw

ay S

iding

s and

Wag

ons

12.96

60

.21

- 73

.17

11.62

0.

09

- 0.

51

12.22

60

.95

1.34

Le

aseh

old R

ailwa

y Sidi

ngs a

nd W

agon

s 17

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- 17

.92

17.23

-

- -

17.23

0.

69

0.69

Ai

rcraft

9.08

-

- 9.

08

6.91

0.

38

2.79

-

4.50

4.

58

2.17

To

tal (A

) 24

,954.0

0 28

,163.3

3 67

.97

53,04

9.36

10,82

8.22

800.6

7 62

2.11

52.61

11

,059.3

9 41

,989.9

7 14

,125.7

8 Int

angib

le As

sets

(B)

Softw

ares

83.48

0.

72

- 84

.20

59.57

9.

64

9.55

0.

23

59.89

24

.31

23.91

To

tal (C

) = (A

) + (B

) 25

,037.4

8 28

,164.0

5 67

.97

53,13

3.56

10,88

7.79

810.3

1 63

1.66

52.84

11

,119.2

8 42

,014.2

8 14

,149.6

9 Pr

eviou

s yea

r 39

,080.0

3 3,2

36.94

17,27

9.49

25,03

7.48

10,29

4.90

1,069

.04

476.1

5 -

10,88

7.79

14,14

9.69

-Ca

pital

Wor

k-in-

Prog

ress

(D)

4,58

2.36

27,29

4.78

Total

(C)+(

D) 46

,596.6

4 41

,444.4

7 N

otes

: 1

Rai

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Sid

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Cro

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0.6

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Pla

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incl

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8 C

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Los

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3 Fr

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clud

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308

0.06

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31st

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1st A

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3 (“

the

Act

”). T

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rem

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has

bee

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ado

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as

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pla

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, whe

re e

stim

ates

for r

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use

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ave

been

take

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the

basi

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repo

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inde

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Eng

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r & V

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1st A

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201

4 is

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the

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yea

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1st M

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5 is

low

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and

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Bas

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Val

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the

plan

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Apr

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014

and

addi

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59

13 Non-Current Investments(valued at cost unless stated otherwise) (` in Crore)



(a) Trade investments - Unquoted(a.1) Equity Instruments

Investment in Subsidiaries226 (Previous Year 226) fully paid Equity Shares of AED 226 million (Previous Year AED 226 million) of Essar Steel Middle East FZE Dubai

322.75 322.75

2,595,000 (Previous Year Nil) fully paid Equity Shares of ` 10 (Previous Year Nil) of Odisha Slurry Pipe Line Infrastructure Limited

25.50 -

103,342,881 (Previous Year 71,830,001) fully paid ordinary Shares of USD 103.34 million (Previous Year USD 71.83 million) of Essar Steel Offshore Limited1

569.39 373.43

200,000 (Previous Year 50,000) fully paid Equity Shares of `10 of Paradeep Steel Company Limited.

0.20 0.05

14 (Previous Year 14) fully paid Equity Shares of AED 14 million (Previous Year AED 14 million) of Essar Steel Trading FZE Dubai

17.61 17.61

935.45 713.84 Investment in AssociatesNil (Previous Year 219,000,000) fully paid Equity Shares of ` 4 each of Essar Power Limited

- 164.56

96,905,000 (Previous Year 96,905,000) fully paid Equity Shares of ` 10 each of Bhander Power Limited1

104.77 104.77

5,781,944 (Previous Year 5,781,944 ) fully paid Equity Share of ` 10 each of Essar Steel Chattisgarh Limited

5.78 5.78

68,900,000 (Previous Year 208,000) fully paid Equity Shares of ` 10 each of Essar Power MP Limited

68.90 5.20

2 (Previous Year 2) fully paid Equity Shares of AED 0.2 million (Previous Year AED 0.2 million) of Essar Steel Processing FZCO Dubai

0.25 0.25

1,300,000 (Previous Year 1,300,000) fully Paid Equity Shares of ` 10 each of Essar Bulk Terminal Limited

1.30 1.30

2,600,000 (Previous year 2,600,000) fully paid Equity shares of ` 10 each of Essar Power Hazira Limited

2.60 2.60

2,600,000 (Previous year 1,631,843) fully paid Equity shares of ` 10 each of Essar Power Orissa Limited

2.60 1.63

186.20 286.09 Others2,000 (Previous Year 2,000) fully paid Equity Shares of ` 10 each of Essar Bulk Terminal Paradip Limited (*** ` 20,000)1

*** ***

250,000 (Previous Year 250,000) fully paid Equity Shares of ` 10 each of Frontline Roll Forms Private Limited

0.25 0.25

95,000 (Previous Year 95,000) fully paid Equity Shares of ` 10 each of Essar Steel Jharkhand Limited

0.10 0.10

20 (Previous Year 20) fully paid Equity Shares of ` 10 each of Essar Commvision Limited (# ` 200)

# #

0.35 0.35 (a.2) Convertible Debentures (Others)

1,065,585 (Previous Year 1,065,585) fully paid Compulsory Convertible Cumulative Debenture of ` 1000 each of Asia Motor Works Limited

106.56 106.56




13 Non-Current Investments(valued at cost unless stated otherwise) (` in Crore)



(b) Trade investment - Quoted(b.1) Equity Instruments (Others)

2,547,223 (Previous Year 2,547,223) fully paid Equity Shares of ` 10 each of Essar Ports Limited1

23.14 23.14

1,273,611 (Previous Year 1,273,611) fully paid Equity Shares of ` 10 each of Essar Shipping Limited1

11.57 11.57

34.71 34.71 (c) Other than Trade Investment - Unquoted(c.1) Non Convertible Debentures (Others)

1,226,300 (Previous Year 1,226,300) fully paid 12.5 % Secured Redeemable Non Convertible Debentures of ` 98.70 each (Previous Year ̀ 105 each) of Essar Oil Limited

12.10 12.88

(d) Other than Trade investment - Quoted (d.1) Investments in Mutual Fund

190,931 (Previous Year Nil) fully paid Units of Unit Linked Insurance Policy Scheme of Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited

0.30 -

1,275.67 1,154.43

Aggregate amount of Quoted Investments [(Aggregate Market Value ` 36.63 Crore (Previous Year ` 17.17 Crore)]

35.01 34.71

Aggregate amount of Unquoted Investments 1,240.66 1,119.72 1,275.67 1,154.43

1 Investment in 49,980,001 shares of Essar Steel Offshore Limited, 96,905,000 shares of Bhander Power Limited, 2,000 shares of Essar Bulk Terminal Paradip Limited, 2,547,223 shares of Essar Ports Limited and 1,273,611 shares of Essar Shipping Limited have been pledged with Banks as security against loans taken.

14 Deferred Tax Assets (Net) (` in Crore)As at


31st March, 2014Deferred Tax Assets on Unabsorbed depreciation and carry forward losses

7,212.29 6,320.61

Less : Deferred Tax Liabilities on Fixed Assets (excess of net book value over written down value as per the provisions of the Income Tax Act, 1961)

5,333.22 4,122.73

1,879.07 2,197.88 Other Deferred Tax Assets:

Mark to Market Valuation of hedging instruments 191.06 304.24 Provision for doubtful debts 2.48 3.45 Provision for doubtful advances 2.18 2.11 Amalgamation Expenses - 0.68 Deferred power charges 8.26 12.18 Other timing differences (disallowances under section 43B of the Income Tax Act, 1961)

3.35 38.50

207.33 361.16 2,086.40 2,559.04

The Company has recognized deferred tax assets of ` 1879.07 Crore on unabsorbed depreciation and carry forward losses as on 31st March 2015 in view of the following:

a) Operations have commenced from integrated facilities at Hazira and Odisha after commissioning of Slurry Pipe Line from Dabuna to Paradeep and Pellet Plant 1 (6 MTPA) at Paradeep.

b) The Company has confirmed orders/MOUs amounting to ` 29,364 Crore in hand, which are to be executed over a period of one to ten years. The Company has received advances amounting to ` 9,621 Crore against




61

the aforesaid confirmed orders/MOUs. The Company has ascertained profit before tax amounting to ` 1,974 Crore which will arise from the execution of these orders/MOUs and the same will absorb deferred tax assets amounting to ` 683 Crore.

c) Based on significantly improved operating margins, Company’s monetisation plan of identified assets (in addition to the sale of Odisha Slurry Pipeline, already completed in current year), substantial orders in hand, sanction of enhanced working capital limits by the banks, dollarisation of substantial rupee term liabilities and consequent reduction in interest outgo and further disbursement of term loans by banks pursuant to information memorandum prepared by an eminent merchant banker for submission to a consortium of 25 banks after appraising the earning potential of the company in next 10 years for debt syndication, the Company is virtually certain that sufficient future taxable income will be available against which deferred tax asset of ` 1,879.07 Crore recognized as on 31st March, 2015 on unabsorbed depreciation and carried forward business losses can be realized.

15 Long Term Loans and Advances(Unsecured and considered good unless otherwise stated) (` in Crore)



Capital Advances 461.96 465.44 Prepaid Expenses 232.79 252.79

694.75 718.23

16 Other Non Current Assets (` in Crore)As at


31st March, 2014Interest Accrued on Investments 34.63 - Shares under irrevocable trust* 766.07 766.07 Long Term Security Deposit 167.68 125.34 Long Term Deposits with Banks - remaining maturity > 12 months (Refer Note 19)

4.92 12.89

Advance towards Equity to Related Parties 91.03 206.52 1,064.33 1,110.82

* Represents 191,517,500 equity shares allotted to a Trust created by the Company, against the Company’s investment in the erstwhile companies namely Essar Steel (Hazira) Limited and Essar Steel Orissa Limited, in pursuant to the scheme of amalgamation. The Company is the sole beneficiary of this trust. All of the 191,517,500 equity shares (Previous Year 191,517,500 equity shares) have been pledged against facility availed by Imperial Consultants & Securities Private Limited.

17 Inventories (` in Crore)As at


31st March, 2014Raw Materials and Components 214.71 249.54 Goods-in-Transit 350.70 491.49 Stores and Spares 391.06 408.11 Goods-in Transit 8.74 10.10 Production Consumables 129.81 109.90 Goods-in Transit 34.79 24.14 Fuel 8.31 20.38 Work-in-Progress* 1,275.55 1,264.62 Finished Goods ** 275.98 682.49 Traded Goods - 2.27

2,689.65 3,263.04




17(a) Details of InventoryUnit 31st March, 2015 31st March, 2014

Quantity ` in Crore Quantity ` in CroreOpening StockWork in Progress*Hot/Cold Rolled Coils, Sheets and Plates MT 111,138 358.89 120,623 407.34 Pellet MT 401,304 268.36 438,349 300.79 Hot Briquette Iron (including Fines) MT 8,125 10.31 28,905 63.95 Iron Ore -Middlings MT 3,681,879 358.48 3,738,227 354.02 Pipes MT 6,391 22.74 158 0.65 Other 245.84 202.64

1,264.62 1,329.39 Finished Goods**Hot/Cold Rolled Coils, Sheets and Plates MT 169,409 647.82 219,684 886.36 Pipes MT 4,606 19.42 3,454 15.06 Other 15.25 22.36

682.49 923.78 Traded Goods MT 2.27 - Closing StockWork in Progress*Hot/Cold Rolled Coils, Sheets and Plates MT 48,246 154.03 111,138 358.89 Pellet MT 376,785 252.66 401,304 268.36 Hot Briquette Iron (including Fines) MT 7,771 10.97 8,125 10.31 Iron Ore Middlings MT 3,682,451 463.93 3,681,879 358.48 Pipes MT 12,186 50.31 6,391 22.74 Other 343.64 245.84

1,275.55 1,264.62 Finished Goods**Hot/Cold Rolled Coils, Sheets and Plates MT 65,822 259.84 169,409 647.82 Pipes MT 1,177 5.05 4,606 19.42 Other 11.09 15.25

275.98 682.49 Traded Goods - 2.27

* Work in Progress includes trial run inventory of ` 222.31 Crore (Previous Year ` 149.47 Crore)** Finished Goods includes trial run inventory of ` 17.02 Crore (Previous Year ` 49.04 Crore)

18 Trade Receivables (` in Crore)As at


31st March, 2014Debts outstanding for a period exceeding six months from the date they are due for payment Considered Good 262.93 196.41 Considered Doubtful 7.15 10.14

270.08 206.55 Less : Provision for Doubtful Debts 7.15 10.14

262.93 196.41 Other Debts 1,013.61 960.57

1,276.54 1,156.98




63

19 Cash and Bank Balances (` in Crore)As at


31st March, 2014(A) Cash and Cash Equivalents Cash on Hand 0.09 0.32 Balances with Banks in Current Accounts 250.05 250.14 193.49 193.81 (B) Other Bank Balances Deposits with original maturity of less than three months * 11.89 8.72 Deposits with original maturity for more than 12 months * 388.32 403.13 Deposits with original maturity for more than 3 months but

less than 12 months * 116.84 123.83

517.04 535.68 767.18 729.49

* Deposits (including long term deposits in Other Non Current Assets with balance maturity period of more than 12 months) of ` 521.96 Crore (Previous Year ` 545.49 Crore), have been pledged with banks as a security for opening Letters of Credit, Buyer’s Credit, Short Term Loans and against Bank Guarantee.

20 Short Term Loans and Advances(Unsecured and Considered good unless otherwise stated) (` in Crore)



Loans and advances to Related Parties 42.89 123.73 Inter Corporate Deposits (ICD) to related parties 1,031.78 749.47 Deposits with Government & Semi Government Authorities 357.09 316.62 Loans and Advances to Suppliers 471.24 528.97 Prepaid Expenses 129.22 162.06 Claims Receivables 1,067.40 1,086.83 Security Deposits 79.08 85.05 Loans and Advances to Staff 2.48 2.37 Advance Income Tax (Net of provisions) 30.56 15.65

3,211.74 3,070.75

21 Other Current Assets (` in Crore)



Interest accrued on ICDs, Loans & Deposits 110.26 63.60

Interest accrued on Investments - 0.14

Export Benefits Accrued 98.38 114.25

Other Receivables (Net of Provision) 3,910.75 22.92

4,119.39 200.91




22 Revenue from Operations (` in Crore)



Sale of Products (Net of Excise) 15,875.43 15,009.79

Sale of Services 32.26 107.97

Other Operating Revenues (Net of Excise) 119.77 130.15

Excise Duty Recovered (including duty on trial run sales) 1,279.44 1,203.29

Total Gross Revenue from operation 17,306.90 16,451.20

Less: Trial Run Sales (including Excise Duty) (2,322.59) (2,098.54)

Revenue from operation 14,984.31 14,352.66

22(a) Details of Products Sold

Unit Year Ended 31st March, 2015


Products Quantity ` in Crore Quantity ` in Crore

Pellets MT 1,236,219 920.01 817,730 659.25

Hot Briquette Iron Fines MT 42,394 35.46 50,465 36.11

Hot/Cold Rolled Coils, Sheets and Plates MT 3,138,551 13,469.88 3,125,204 12,763.14

Pipes MT 174,229 969.78 122,061 668.40

Others 184.56 145.45

Total Products Sales (A) 15,579.69 14,272.33

Traded GoodsTMT Bars MT 52,491 198.16 37,966 141.78

Gases 59.76 576.49

Others 37.82 19.19

Total Products Sales (B) 295.74 737.46

Services Rendered and Other Operating RevenueJob Work 13.38 11.25

Commission Income 18.88 96.72

Misc. Scrap Material 119.77 130.15

Details of Services Rendered and Other Operating Revenue (C)

152.03 238.12

Excise Duty Recovered (including duty on trial run sales) (D)

1,279.44 1,203.29

Total Gross Sales (A)+(B)+(C)+(D) 17,306.90 16,451.20

Less : Trial Run Sales/ Exceptional Sales (including Excise Duty)

(2,322.59) (2,098.54)

Total 14,984.31 14,352.66

23. During the year, the Company has sold, on slump sale basis, a Business Undertaking, (pending commercial production) comprising of Slurry Pipeline at Odisha and associated facilities, and has also entered into a long term Right to Use Agreement for obtaining right to use the said pipeline for its pellets manufacturing operations. The sales consideration of ` 4,000 Crore is based on valuation of the business undertaking based on the above two contracts and carried out by independent valuation expert. The company has earned a profit of ` 2,793.04 Crore on the same.




65

23(a) Other Income (` in Crore)



Interest on Deposits with Banks and Others Inter Corporate Deposits 35.87 56.24 Bank Deposits 40.71 36.01 Others 80.42 46.79

157.00 139.04Rent 25.18 20.87 Profit on Sale of Long Term Investments 121.44 - Dividend Income from Long Term Investments 0.34 0.34 Income from Management Services 0.21 17.45 Net Gain on Foreign Currency Transactions and Translation (other than considered as exchange variation on borrowings)

29.14 60.56

Interest on Swap Contracts 91.33 73.50 Liabilities no longer required written back:- consequent to termination of contract & others 9.32 131.84 - consequent to assignment of profit/loss sharing

arrangement - 575.00

Miscellaneous Income 1.81 3.07 435.77 1,021.67

24 Cost of Materials Consumed (` in Crore)Year Ended


31st March, 2014Opening stock 122.18 121.37 Add: Purchases during the year 6,708.50 6,583.81 Less: Closing Stock 268.77 122.18 Raw Materials consumed 6,561.91 6,583.00 Production Consumables, Stores and Spares 1,225.40 1,081.50 Excise Duty* (1.37) (2.34)

7,785.94 7,662.16

* Represents differential Excise Duty in respect of Closing Stock and Opening Stock.

Details of Raw Material and Components Consumed Unit Year Ended


31st March, 2014Consumption of Raw Materials Quantity ` in Crore Quantity ` in CroreIron Ore Fines MT 5,937,496 2,009.04 6,365,184 2,434.69 Pellets MT 661,088 532.29 77,964 70.98 Iron Ore Lump MT 385,097 269.39 217,786 182.41 Zinc MT 18,093 277.41 23,246 323.23 Natural Gas used for HBI/DRI SM3 169,406,239 605.54 237,298,272 606.90 Coal MT 1,618,140 1,156.51 1,425,286 1,190.29 Coke MT 997,677 1,498.45 1,015,625 1,769.80 HRC/ Plate Consumed MT 94,385 341.62 53,289 200.49 Others/ Cost transfer to CWIP (128.35) (195.79)

6,561.91 6,583.00




25 Purchase of Traded Goods (` in Crore)



Gases 47.85 487.94 TMT Bars and Others 249.95 180.11

297.80 668.05

26 Energy Cost (` in Crore)



Petroleum Products - Fuel 511.23 876.17 Power and Water Charges 1,284.34 1,610.94

1,795.57 2,487.11

27 Changes in Inventories of Finished Goods, Work in Progress and Stock in Trade (` in Crore)



Opening Stock Finished Goods 633.45 869.92 Work-in-Progress 1,114.88 1,146.92 Traded Goods 2.27 -

1,750.60 2,016.84 Closing Stock Finished Goods 258.96 633.45 Work-in-Progress 1,053.24 1,114.88 Traded Goods - 2.27

1,312.20 1,750.60 438.40 266.24

28 Employee Benefits Expenses (` in Crore)



Salaries 248.25 278.54 Contribution to Provident and Other Funds 27.65 18.80 Staff Welfare Expenses 58.50 57.83 Provision for Employees Stock Appreciation Rights - 0.52

334.40 355.69

29 Manufacturing and Asset Maintenance (` in Crore)



Repairs, Maintenance and Equipment Hire Charges 281.44 263.16 Labour and Sub-Contracting Charges 142.65 139.66 Plant Insurance 14.59 17.31

438.68 420.13




67

30 Administrative Expenses (` in Crore)Year Ended


31st March, 2014Traveling, Conveyance and Vehicle Hire & Maintenance Charges

32.86 16.28

Printing, Stationery,Postage and Telephone 10.15 4.09 Professional Fees 91.94 56.95 Operating Lease Rent 29.00 25.97 Repairs and Maintenance - Other than Plant 7.19 4.18 Insurance - Other than Plant 0.91 0.61 Rates and Taxes 7.61 6.62 Auditor's Remuneration* 2.02 1.75 Loss on sale/disposal/write off of Fixed Assets (net) 1.93 0.73 Miscellaneous Expenses 36.11 36.57

219.72 153.75 * Auditor’s Remuneration (excluding service tax)Audit Fees 1.90 1.75 Other Services 0.12 -

2.02 1.75

31 Selling and Distribution Expenses (` in Crore)Year Ended


31st March, 2014

Sales Commission 129.22 111.94 Freight Outward (net), Intercarting and Packing Charges 271.73 315.38 Other Selling Expenses 61.44 39.67

462.39 466.99

32 Finance Cost (` in Crore)Year Ended


31st March, 2014Guarantee and Other Bank Charges 586.55 489.53 Interest on Term Loans 2,077.13 2,670.04 on Debentures 54.07 82.35 on Advance from Customer 83.02 - on Inter Corporate Deposits 303.51 215.98 to Banks and Others 760.73 718.80

3,278.46 3,687.17 3,865.01 4,176.70

33 Exchange Variation and Derivative (Gain)/Loss (net) (` in Crore)



Mark to Market on Derivative Contract (22.04) (12.52)Exchange Variation (net) 56.25 263.09 Amortisation of Foreign Currency Monetary Item Translation Difference

11.77 11.90

Loss on cancellation/settlement of Derivative and Forward Exchange Contracts (Net of Premium paid / Amortised)

336.46 278.09

382.44 540.56




34 Contingent Liabilities not provided for (` in Crore)



(a) Bills Discounted 430.94 567.65 (b) Claims against the Company not acknowledged as debt

in respect of:(i) Disputed Sales Tax/VAT/ Entry Tax matters in

respect which the Company has gone in appeal 18.68 20.50

(ii) Disputed Excise Duty matters in respect which the Company has gone in appeal

0.17 1.14

(iii) Disputed Custom Duty / Export Duty matters in respect which the Company has gone in appeal

134.11 200.92

(iv) Tax on sale of Electricity demanded by collector of electricity duty on Essar Power Limited

45.91 45.91

(v) Electricity Duty demand1 [including amount paid ` 589.24 Crore (Previous year ` 589.24 Crore)]

609.01 609.01

(vi) Wheeling Charges demanded by GETCO2 [including amount paid ` 27.23 Crore (Previous year ` 27.23 Crore)]

393.01 393.01

(vii) Freight Claim by South East Railway [including amount paid ` 14.48 Crore (Previous year ` 14.48 Crore)]

100.53 100.53

(viii) Disputed Differential Electricity Duty [including amount paid ` 49.39 Crore (Previous year ` 49.39 Crore)]

49.39 49.39

(ix) Others 26.42 26.37 Future cash outflows in respect of above matters are determinable only on receipt of judgments/decisions pending

at various forums/authorities.

1 A Show Cause Notice (SCN) dated 10th March, 2010 was issued by the Collector Electricity Duty, Gandhinagar, demanding Electricity Duty ` 585.31 Crore and Interest ` 528.48 Crore for the period April 2000 to February 2010. The Company has claimed that it is exempt from paying the Electricity Duty for a period of 15 years from the date of commissioning of the captive power project i.e. from 8th August, 1995 to 7th August, 2010.

The Company filed an appeal to the Division Bench of Gujarat High Court against the same which was admitted by the Court and a stay was granted vide order dated 5th April, 2010. As per the conditions of stay, the Company has paid under protest ` 589.24 Crore (Previous year ` 589.24 Crore) towards the arrears of the principal amount of electricity duty.

As per the management view and based on the legal opinion from a reputed counsel, the Company is eligible for exemption of Electricity Duty for the period of 15 years i.e. from 8th August, 1995 to 7th August, 2010 and accordingly no provision is required to be made in the books. However the Company has disclosed ` 609.01 Crore towards electricity duty on account of above matter as contingent liability as at 31st March, 2015 and has considered demand of interest as a remote liability.

2 In January 2006, the Dakshin Gujarat Vij Company Limited (“DGVCL”) claimed from Essar Steel India Limited (“ESIL”) for payment of wheeling charges on the ground that ESIL is using its distribution system for conveyance of electricity generated by its two captive power plants to the manufacturing units. In so claiming, the contention of DGVCL was that Bus Bars engineered, procured and constructed by ESIL at its own cost is a part of its service line and since the electricity of ESIL is conveyed through the service line, ESIL is liable to pay wheeling charges. ESIL denied the said claim by contending that Bus Bars are an integral part of its switchyard, which is constructed, operated and maintained by ESIL and the same cannot be a service line or extension thereof laid down by the Gujarat Electricity Board (“GEB”). Thereafter, in June 2006, DGVCL served a further demand-cum-disconnection notice on ESIL, which ESIL challenged before the Gujarat High Court by filing a writ petition. The petition was dismissed by the Ld. Single Judge of the Hon’ble High Court on 15th January 2007. After the said judgment, DGVCL abandoned its said claim for payment of wheeling charges and in lieu thereof, the Gujarat Electricity Transmission Corporation Limited (“GETCO”) raised a demand on ESIL for payment of transmission charges on the ground that ESIL is, inter alia, is using its transmission system for conveyance of its electricity. GETCO claimed that the Bus Bars are a part of its transmission line and since the same are used, inter alia, by ESIL for conveyance of its electricity, it is liable to pay transmission charges to GETCO. ESIL denied the said claim of GETCO and further filed an appeal before the Division Bench of the Gujarat High Court, which rejected ESIL’s application for interim




69

stay of recovery of the transmission charges pending hearing and final disposal of the appeal. Consequently, ESIL approached the Supreme Court, which stayed the recovery of transmission charges by GETCO subject to ESIL paying 30% of the transmission charges demanded in February 2007, which was complied with by ESIL. Finally, the Division Bench dismissed the appeal filed by ESIL by Judgment dated 30th August 2011. ESIL has preferred a Special Leave Petition (Civil) No.27540 of 2011 before the Hon’ble Supreme Court, which has stayed recovery of the transmission charges and the matter is pending for final hearing.

Bus Bars are, inter alia, ESIL’s installation situated within its own premises beyond the Delivery Point. The same are thus, not a part of transmission line or an extension thereof of GETCO. There is no provision in law providing for vesting of any transmission line constructed by one person in another. GETCO, being the transmission licensee has not granted any open access to its transmission system to ESIL and thereby one of the conditions of the charging Section 40 of the Electricity Act, 2003 has not been fulfilled and GETCO is, therefore, not entitled to receive payment of any transmission charges from ESIL.

As per the Memorandum of Minutes dated 1st February 2010, ESIL has shifted the Ichhapore service line to another location. Thereafter, GETCO has stopped billing transmission charges to ESIL. As per the view of the management of ESIL as well as of its reputed Counsel, ESIL is not liable to pay any transmission charges to GETCO and hence no provision is required to be made in the books for the same. However, ESIL has disclosed ` 393.01 Crore (Previous Year ` 393.01 Crore) as contingent liability as on 31st March 2015 towards demand of transmission charges and has considered demand for interest as a remote liability.

(` in Crore)As at


31st March, 2014(c) Guarantees given to various Banks, Financial Institutions,

Finance Companies, etc. on behalf of others to the extent of outstanding balance of liabilities as at the year-end against the said guarantees

4,806.25 4,354.24

c.1 The Company has invested ` 569.39 Crore in the equity shares of Essar Steel Offshore Limited, Mauritius (ESOL), a wholly owned subsidiary of the Company and has also given advance against equity of ` 83.79 Crore, as at 31st March, 2015. In addition, the Company along with Essar Minerals Ltd. and Essar Minerals Cooperatief U. A. has given a guarantee of upto USD 586.35 million (outstanding loan amount against the guarantee in the books of ESOL as on 31st March, 2015 is USD 413 Million) for a loan taken by ESOL for the acquisition of Trinity Parent Corporation, USA (“Trinity”). Trinity (through its various subsidiaries) is engaged in the extraction of steam and metallurgical coal.

The steam coal operations have been facing challenges due to availability of cheap natural gas as alternate source and increase in various environmental restrictions. However, considering the coking coal reserves available and business valuation of Trinity by a third party based on future cash flow projections of Trinity business, no provision has been made for diminution in the value of investment made by the Company in ESOL.

(` in Crore)



35 (a) Estimated amount of contracts remaining to be executed on capital account and not provided for

531.39 842.19

(b) Custom Duty on pending export obligation under EPCG scheme

4,500.95 4,180.97

36 Segment Information Primary Business Segment The Company is primarily engaged in a single business segment of manufacture and sale of steel products and

accordingly, this is the only primary reportable segment. Geographical Segments Secondary segment reporting is based on the geographical location of customers. The geographical segments have

been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.




Information about Geographical Segments (` in Crore)

Segment Information



India Outside India

Total India Outside India

Total

Revenue (Income from operation) 11,899.71 3,084.60 14,984.31 10,606.92 3,745.74 14,352.66

Carrying amount of segment assets 59,262.56 2,433.33 61,695.89 50,640.98 2,208.14 52,849.12

Carrying amount of segment liabilities 31,715.81 17,953.82 49,669.63 36,689.60 10,234.56 46,924.16

Additions to fixed assets (excluding capital-work-in- progress)

28,164.05 - 28,164.05 3,236.94 - 3,236.94

37 Disclosure of related party transactions as required by Accounting Standard - 18 Related Party Disclosures:(a) Holding Company

1 Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Ltd) Immediate Holding Company- (ESAHL) 2 Essar Steel Mauritius Limited – Holding Company of Essar Steel Asia Holdings Limited - (ESML) 3 Essar Global Fund Limited (FKA Essar Global Limited), Cayman Islands – Holding Company of Essar Steel

Mauritius Limited (EGFL) (b) Subsidiaries

1 Essar Steel Middle East FZE (ESMEF) 16 New Trinity Coal Inc. (NTCI)* 2 Essar Steel Trading FZE (ESTF) 17 Bear Fork Resources LLC * 3 Paradeep Steel Company Limited. (PSCL) 18 Deep Water Resources LLC * 4 Essar Steel Offshore Limited. (ESOSL) 19 Levisa Fork Resources LLC * 5 Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL) 20 North Springs Resources LLC * 6 Trinity Coal Marketing LLC (EMA) * 21 Little Elk Mining Company LLC * 7 Essar Minerals Limited (FKA Essar Mining Limited) * 22 Banner Coal Terminal LLC * 8 Essar Mineral Cooperatief U.A. * 23 Hughes Creek terminal LLC * 9 Essar Minerals Canada Limited * 24 Frasure Creek Mining LLC *

10 New Trinity Holding LLC (NTHL)* 25 Falcon Resources LLC * 11 New Resources Inc. (NRI)* 26 Prater Branch Resources LLC * 12 Essar Minerals INC * 27 Trinity RMG Holding LLC * 13 Trinity Parent Corporation * 28 RMG INC * 14 Trinity Coal Corporation * 29 Hazira Coke Limited (HCL)* 15 Trinity Coal Partners LLC * * These companies are subsidiaries of a wholly owned subsidiary of the Company

(c) Fellow Subsidiaries1 Essar Steel Logistics Limited (ESLL) 8 Essar Oil (UK) Limited (EOUKL)2 Essar Steel Limited (FKA Essar Steel Holdings

Limited) (ESTLM) 9 Essar Power (Jharkhand) Limited (EPJL)

3 Essar Steel Algoma Inc (ESA-INC) 10 Essar Power Gujarat Limited (EPGL) 4 PT Essar Indonesia (PTEI) 11 Essar Power Transmission Company Limited

(EPTCL) 5 Essar Pellets Marketing Ltd, India (EPML) 12 Essar Electric Power Development Corporation

Limited (EEPDCL) 6 Essar Energy Limited (FKA Essar Energy Plc)

(EEPLC) 13 Vadinar Power Company Limited (VPOCL)

7 Essar Oil Limited (EOL) 14 Navbharat Power Private Limited (NPPL)




71

15 Essar Project (India) Limited (EPIL) 27 Essar Bulk Terminal (Salaya) Limited (EBTSL) 16 Essar Constructions Overseas Limited (ECOL) 28 Essar Telecom Kenya Limited (ETKL) 17 Essar Offshore Subsea Limited (EOSL) 29 AGC Networks Limited (AGCNL) 18 Essar Refinery Projects Limited, India (FKA Essar

Road Projects Limited) (ERPL)30 Aegis Limited (AEGIS)

19 Essar Shipping & Logistics Limited (ESALL) 31 Equinox Business Parks Pvt Limited (EBPPL) 20 Essar Shipping Limited (ESL) 32 Essar Africa Holdings Limited (EAHL) 21 Essar Oilfields Services India Limited (EOSPL) 33 Essar Mineral Resources Limited (EMRL) 22 Essar Logistics Limited (ELL) 34 Essar Global Services FZE, UAE (EGSF) 23 Essar Ports Limited (EPL) 35 Peak Trading Overseas Limited (PTOL) 24 Vadinar Oil Terminal Limited (VOTL) 36 Essar Power Limited. (EPOL)( w.e.f. 26.09.2014) 25 Vadinar Ports & Terminal Limited (VPTL) 37 Tirunelweli Wind Farms Limited (TWFL) 26 Essar Bulk Terminal Paradip Limited (EBTPL) 38 Vadinar Properties Limited ( VPRL)

(d) Associates1 Bhander Power Limited. (BPOL) 5 Essar Power Hazira Limited (EPHL) 2 Essar Bulk Terminal Limited. (EBTL) 6 Essar Power Limited. (EPOL) ** 3 Essar Power ( Orissa) Limited. (EPOOL) 7 Essar Steel Processing FZCO (ESP-FZCO) 4 Essar Steel Chhattisgarh Limited. (ESCL) 8 Essar Power MP Limited(EPMPL)

** Ceased to be associate w.e.f. 26.09.2014

(e) Key Management Personnel1 Mr. Firdose A. Vandrevala, Executive Vice Chairman (FV) 2 Mr. Dilip Oommen, Managing Director & CEO (DO) 3 Mr. Mahadev Iyer, Director (Finance) & CFO (MI) 4 Mr. Alok Gupta, Director (Marketing) (AG) (Ceased whole-time director w.e.f. 16.11.2013) 5 Mr. Ashutosh Agarwala, Director (Finance) (AA)(Ceased to be whole-time director w.e.f. 16.11.2013)

During the year, following transactions were carried out with some of the related parties in the ordinary course of business: (excluding reimbursement)

(` in Crore)Sr. No.

Particulars Holding Companies

Subsidiaries Fellow Subsidiaries

Associates Key Management

Personnel (a) Sales / Sales Return of Goods (Net) - 938.77 197.71 2.05 -

- (1,400.45) (342.12) (5.20) - (b) Income-Lease Rentals/Rent building - - 6.71 13.99 -

- - (5.89) (8.18) - (c) Interest Income-Others - 35.87 4.47 - -

- (26.64) - - - (d) Sale of Business Undertaking - 4,000.00 - - -

- - - - - (e) Sales of Fixed assets - - - 20.46 -

- - - - - (f) Management Fees - Income - - 0.21 - -

- - (17.45) - -




(` in Crore)Sr. No.




Personnel (g) Purchase of Raw Materials,Stores and

Spares, Production Consumables and Freight

- - 792.22 419.37 - - - (929.46) (560.29) -

(h) Purchase of Petroleum Products (Fuel)

- - 0.88 - - - - (0.17) - -

(i) Power Processing Charges / Recovery - - 113.81 115.79 - - - (452.38) (597.10) -

(j) Water Charges - - 0.34 -0.22 - - - (0.04) (-1.02) -

(k) Repairs and Maintenance - - 6.58 - - - - (43.24) (3.72) -

(l) Plant and Equipment Hire Charges - - 24.92 - - - - (63.94) - -

(m) Labour Sub Contract Charges - - 0.58 - - - - (1.93) - -

(n) Traveling and Conveyance - - -0.21 - - - - (0.36) - -

(o) Professional Fees - 27.35 36.11 - - - - (25.88) - -

(p) Office Rent - - 7.29 - - - - (7.29) - -

(q) Miscellaneous Expenses - - 0.04 - - - - (0.20) - -

(r) Freight Outwards Expenses - - 196.54 139.54 - - - (545.07) (16.87) -

(s) Sales Commission - - 31.30 - - - - (47.39) - -

(t) Interest Expenses - 3.94 320.92 75.96 - - (5.20) (286.12) (82.94) -

(v) Capital Contract - - 103.91 0.00 - - - (156.05) - -

(w) Sale of stores & Spares - - 0.17 0.03 - - - (0.88) - -

(x) Directors' Remuneration - - - - 11.57 - - - - (7.73)

(y) ICD Given - 307.84 - - - - (168.40) - - -

(z) Repayment of ICD given - 67.29 - - - - (97.24) - - -

(aa) ICD taken - - 2,756.47 175.00 - - - (2,886.54) (100.00) -

(ab) Repayment of ICD taken - - 2,274.06 - -

- - (2,762.82) - -




73

(` in Crore)Sr. No.




Personnel (ac) Purchase of Investment - 221.61 - 64.67 -

- (120.49) - - -

(ad) Purchase of Fixed Assets - - 42.76 - - - - (95.83) - -

(ae) Issue of Share Capital 99.71 - 200.00 - - (16.16) - (10.93) - -

Balance outstanding at year end (a) Long Term Investments - 935.45 46.82 186.20 -

- (713.84) (52.79) (280.90) - (b) Debtors - 329.20 17.30 - -

- (425.22) (21.62) (0.10) - (c) Other Current Advance - 3,945.53 0.32 0.46 -

- (38.61) (15.55) (0.39) - (d) Deposits - - 4.37 - -

- - (4.78) - - (e) Other Advance( Including Advance

Towards Equity) 0.50 101.97 31.26 0.28 -

(0.50) (203.42) (127.28) - - (f) Sundry Creditors Payable - 15.00 940.71 628.44 -

- (0.01) (793.64) (730.17) - (g) Capital Advances (CWIP) - - 14.59 -1.21 -

- - (63.02) (- 21.67) - (h) Advance From Customer - 169.35 494.32 0.15 -

- (533.71) (856.98) (0.19) - (i) Inter Corporate Deposits Given - 1,031.78 - - -

- (749.29) - - - (j) Inter Corporate Deposits Taken - - 1,788.78 275.00 -

- - (1,306.37) (100.00) - (k) Security Deposits Received - - 4.22 - -

- - (19.78) - - (l) Guarantees Given - 3,701.76 49.23 182.99 -

- (3,620.71) (162.24) (69.98) - (m) Guarantees Received 14,301.82 - 5,787.71 - -

(14,226.06) - (5,447.00) - -




Details of Party wise transactions:(` in Crore)

Name of Related Party Nature of Transaction BPOL EBTL EPOL EPHL EOL EPGL EPMPL AEGIS ELL EPIL

(a) Sales / Sales Return of Goods (Net) 0.07 1.98 - - 35.05 - - - 3.28 130.58 (3.74) (1.46) - - (262.60) - (0.07) - - (57.98)

(b) Income - Lease Rentals/Rent building 11.38 0.28 0.18 2.33 0.21 - - 0.29 0.28 5.67 (7.62) (0.28) (0.28) - (0.10) - - (0.83) (0.07) (4.56)

(c) Interest Income-Others - - - - 4.47 - - - - - - - - - - - - - - -

(d) Sale of Business Undertaking - - - - - - - - - - - - - - - - - - - -

(e) Sale Of Fixed Assets - - - - - - - - - - - - - - - - - - - -

(f) Management Fees -Income - - - - - - - - - - - - - - - - - - - -

(g) Purchases of Raw Materials, Stores and Spares, Prod. Consumables and Freight

- 419.37 -0.00 - 74.15 - - - 205.04 2.31 - (560.27) (0.02) - (22.64) - - - (11.51) (23.17)

(h) Purchase of Petroleum Products (Fuel) - - - - 0.89 - - - -0.02 - - - - - - - - - - -

(i) Power Processing Charges / Recovery 12.42 - 55.20 - 9.18 1.99 146.16 - - - (399.01) - (198.08) - (64.19) (5.45) (271.94) - - -

(j) Water Charges (Recovered) -0.22 - -0.05 - - - - - - 0.39 (-0.85) - (-0.17) - - - - - - (0.04)

(k) Repairs and Maintenance - - 1.96 - - - - - - 4.54 - - (3.72) - - - - (0.05) (0.01) (42.91)

(l) Plant and Equipment Hire Charges - - - - - - - - 14.74 10.10 - - - - - - - - (1.33) (57.56)

(m) Labour Sub Contract Charges - - - - - - - - 0.09 0.49 - - - - - - - - (0.96) (0.15)

(n) Traveling and Conveyance - - - - -0.29 - - 0.00 - - - - - - (0.36) - - - - -

(o) Professional Fees - - - - 0.11 - - 34.18 - 1.69 - - - - (0.06) - - (25.14) - (0.53)

(p) Office Rent - - - - 0.01 - - - - - - - - - (0.01) - - - - -

(q) Miscellaneous Expenses - - - - - - - -0.03 - 0.06 - - - - - - - (0.09) - (0.11)

(r) Freight Outwards Expenses - 139.54 - - - - - - 183.17 0.07 - (16.87) - - - - - - (119.69) (5.23)

(s) Sales Commission - - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses 10.03 39.34 12.13 - 92.17 - - - 21.46 0.44 (57.11) (27.17) 1.41 - (6.96) - - - (24.34) (55.11)

(v) Capital Contract - - - - - - - -0.00 0.04 103.88 - - - - - - - (1.85) (0.01) (154.17)

(w) Sale of stores & Spares - 0.03 - - - - - - - 0.17 - - - - - - - - - (0.88)

(x) Directors Remuneration (including perquisites) - - - - - - - - - - - - - - - - - - - -

(y) ICD Given - - - - - - - - - - - - - - - - - - - -

(z) Refund of ICD Given - - - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - - 2,058.21 - - - 258.62 - - - - - (160.00) - - - (353.17) (244.30)

(ab) Repayment of ICD taken - - - - 1,141.40 - - - 264.00 - - - - - (160.00) - - - (381.45) (450.99)

(ac) Purchase of Investments - - - - - - 63.70 - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - - 42.76 - - - - - - - - - (95.28)

(ae) Issue of Share Capital (Including Premium) - - - - - - - - - - - - - - - - - - - -




75

(` in Crore) Name of Related Party

Nature of Transaction ESL EBTPL ESTLM ESMEF EPML ESTF ESOSL PTEI EOSL EPOOL NPPL (a) Sales / Sales Return of Goods (Net) - - - 938.77 0.00 - - 13.72 - - -

- - - (1,400.45) - - - (21.01) - - - (b) Income - Lease Rentals/Rent building - - - - - - - - - - -

- - - - - - - - - - (0.05) (c) Interest Income-Others - - - 32.56 - 3.31 - - - - -

- - - (23.34) - (3.30) - - - - - (d) Sale of Business Undertaking - - - - - - - - - - -

- - - - - - - - - - - (e) Sale Of Fixed Assets - - - - - - - - - 20.46 -

- - - - - - - - - - - (f) Management Fees -Income - - 0.21 - - - - - - - -

- - (17.45) - - - - - - - - (g) Purchases of Raw Materials, Stores and Spares,

Prod. Consumables and Freight 365.41 142.94 - - - - - - - - -

(612.10) (147.56) - - - - - - - - - (h) Purchase of Petroleum Products (Fuel) - - - - - - - - - - -

- - - - - - - - - - - (i) Power Processing Charges / Recovery - -3.33 - - - - - - - 7.21 -

- (-3.46) - - - - - - - - - (j) Water Charges (Recovered) - - - - - - - - - - -

- - - - - - - - - - - (k) Repairs and Maintenance 0.00 - - - - - - - - - -

- - - - - - - - - - - (l) Plant and Equipment Hire Charges - - - - - - - - - - -

- - - - - - - - - - - (m) Labour Sub Contract Charges - - - - - - - - - - -

- - - - - - - - - - - (n) Traveling and Conveyance - - - - - - - - - - -

- - - - - - - - - - - (o) Professional Fees - - - 27.35 - - - 0.12 - - -

- - - - - - - (0.16) - - - (p) Office Rent 0.02 - - - - - - - - - -

(0.02) - - - - - - - - - - (q) Miscellaneous Expenses - - - - - - - - 0.01 - -

- - - - - - - - - - - (r) Freight Outwards Expenses 14.83 5.49 - - - - - - - - -

(44.77) (7.08) - - - - - - - - - (s) Sales Commission - - 31.30 - - - - - - - -

- - (47.39) - - - - - - - - (t) Interest & Other Financial Expenses 1.46 21.03 - 3.94 26.59 - - - 50.67 - 0.12

(11.60) (11.90) - (5.20) (0.07) - - - (105.59) - (4.28) (v) Capital Contract - - - - - - - - - - -

- - - - - - - - - - - (w) Sale of stores & Spares - - - - - - - - - - -

- - - - - - - - - - - (x) Directors Remuneration (including perquisites) - - - - - - - - - - -

- - - - - - - - - - - (y) ICD Given - - - 307.84 - - - - - - -

- - - (168.40) - - - - - - - (z) Refund of ICD Given - - - 67.29 - - - - - - -

- - - (97.24) - - - - - - - (aa) ICD taken - - - - 175.00 - - - - - -

- - - - (100.00) - - - (697.00) - (32.00) (ab) Repayment of ICD taken - - - - - - - - 484.15 - 32.00

- - - - - - - - (768.42) - - (ac) Purchase of Investments - - - - - - 195.96 - - 0.97 -

- - - - - - (120.49) - - - - (ad) Purchase of Fixed Assets - - - - - - - - - - -

- - - - - - - - - - - (ae) Issue of Share Capital (Including Premium) - - - - - - - - - - -

- - (10.93) - - - - - - - -





Nature of Transaction EEPDCL EPTCL ECOL ESAHL ESML AGCNL EBTSL VPTL ESLL EOUKL PSCL (a) Sales / Sales Return of Goods (Net) - - 0.06 - - - 12.60 - - 2.42 -

- - (0.07) - - - - - (0.02) - - (b) Income - Lease Rentals/Rent building - 0.07 - - - - - - 0.00 - -

- (0.05) - - - - - - (0.21) - - (c) Interest Income-Others - - - - - - - - - - -

- - - - - - - - - - - (d) Sale of Business Undertaking - - - - - - - - - - -

- - - - - - - - - - - (e) Sale Of Fixed Assets - - - - - - - - - - -

- - - - - - - - - - - (f) Management Fees -Income - - - - - - - - - - -

- - - - - - - - - - - (g) Purchases of Raw Materials, Stores and Spares, Prod.

Consumables and Freight - - - - - - - - 2.38 - - - - - - - - - - (112.48) - -

(h) Purchase of Petroleum Products (Fuel) - - - - - - - - (0.00) - - - - - - - - - - (0.17) - -

(i) Power Processing Charges / Recovery 0.76 - - - - - - - - - - (114.26) - - - - - - - - - -

(j) Water Charges (Recovered) - - - - - - - - - - - - - - - - - - - - - -

(k) Repairs and Maintenance - - - - - - - - 0.08 - - - - - - - (0.23) - - (0.04) - -

(l) Plant and Equipment Hire Charges - - - - - - - - 0.08 - - - - - - - - - - (5.04) - -

(m) Labour Sub Contract Charges - - - - - - - - - - - - - - - - - - - (0.82) - -

(n) Traveling and Conveyance - - - - - - - - - - - - - - - - - - - - - -

(o) Professional Fees - - - - - - - - - - - - - - - - - - - - - -

(p) Office Rent - - - - - - - - - - - - - - - - - - - - - -

(q) Miscellaneous Expenses - - - - - - - - - - - - - - - - - - - - - -

(r) Freight Outwards Expenses - - - - - - - - -7.02 - - - - - - - - - - (368.30) - -

(s) Sales Commission - - - - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses - - - - - - - 33.21 - - - - - - - - - - (33.56) - - -

(v) Capital Contract - - - - - - - - -0.00 - - - - - - - - - - (0.02) - -

(w) Sale of stores & Spares - - - - - - - - - - - - - - - - - - - - - -

(x) Directors Remuneration (including perquisites) - - - - - - - - - - - - - - - - - - - - - -

(y) ICD Given - - - - - - - - - - - - - - - - - - - - - -

(z) Refund of ICD Given - - - - - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - - - - - - - - - - - - - - - - (445.00) - - -

(ab) Repayment of ICD taken - - - - - - - - - - - - - - - - - - (435.00) - - -

(ac) Purchase of Investments - - - - - - - - - - 0.15 - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - 0.00 - - - - - - - - - - (0.56) - -

(ae) Issue of Share Capital (Including Premium) - - - 99.71 - - - - - - - - - - (16.16) - - - - - - -




77


Nature of Transaction EPJL EBPPL TWFL VPOCL OSPIL VPRL ESCL DO AG MI AA FV (a) Sales / Sales Return of Goods (Net) - - - - - - - - - - - -

- - (0.37) - - - - - - - - - (b) Income - Lease Rentals/Rent building - - - - - - - - - - - -

- - - - - - - - - - - - (c) Interest Income-Others - - - - - - - - - - - -

- - - - - - - - - - - - (d) Sale of Business Undertaking - - - - 4,000.00 - - - - - - -

- - - - - - - - - - - - (e) Sale Of Fixed Assets - - - - - - - - - - - -

- - - - - - - - - - - - (f) Management Fees -Income - - - - - - - - - - - -

- - - - - - - - - - - - (g) Purchases of Raw Materials, Stores and

Spares, Prod. Consumables and Freight - - - - - - - - - - - - - - - - - - - - - - - -

(h) Purchase of Petroleum Products (Fuel) - - - - - - - - - - - - - - - - - - - - - - - -

(i) Power Processing Charges / Recovery - - - - - - - - - - - - - - - - - - - - - - - -

(j) Water Charges (Recovered) - - - - - - - - - - - - - - - - - - - - - - - -

(k) Repairs and Maintenance - - - - - - - - - - - - - - - - - - - - - - - -

(l) Plant and Equipment Hire Charges - - - - - - - - - - - - - - - - - - - - - - - -

(m) Labour Sub Contract Charges - - - - - - - - - - - - - - - - - - - - - - - -

(n) Traveling and Conveyance 0.07 - - - - - - - - - - - - - - - - - - - - - - -

(o) Professional Fees - - - - - - - - - - - - - - - - - - - - - - - -

(p) Office Rent - 7.26 - - - - - - - - - - - (7.26) - - - - - - - - - -

(q) Miscellaneous Expenses 0.00 - - - - - - - - - - - - - - - - - - - - - - -

(r) Freight Outwards Expenses - - - - - - - - - - - - - - - - - - - - - - - -

(s) Sales Commission - - - - - - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses - 0.63 32.35 28.66 - - 26.59 - - - - - - - (32.70) - - - (0.07) - - - - -

(v) Capital Contract - - - - - - - - - - - - - - - - - - - - - - - -

(w) Sale of stores & Spares - - - - - - - - - - - - - - - - - - - - - - - -

(x) Directors Remuneration (including perquisites)

- - - - - - - 2.83 - 2.17 - 6.56 - - - - - - - (2.57) (1.13) (0.89) (1.04) (2.09)

(y) ICD Given - - - - - - - - - - - - - - - - - - - - - - - -

(z) Refund of ICD Given - - - - - - - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - 264.64 - - 175.00 - - - - - - - (280.00) (520.90) - (54.17) (100.00) - - - - -

(ab) Repayment of ICD taken - - 239.34 71.70 - 41.48 - - - - - - - - - (520.90) - (46.06) - - - - - -

(ac) Purchase of Investments - - - - 25.50 - - - - - - - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - - - - - - - - - - - - - - - - -

(ae) Issue of Share Capital (Including Premium) - - 200.00 - - - - - - - - - - - - - - - - - - - - -



Essar Steel India LimitedB

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year

end

:(`

in Cr

ore)

Par

ticula

rs

BPO

L E

STLM

E

SAHL

P

SCL

ESM

L E

SCL

EST

F E

SMEF

E

PIL

ELL

E

BTPL

E

GFL

PTE

I E

OL

EBT

L E

POL

AEG

IS

Long

Term

Inve

stmen

ts 10

4.77

- -

0.20

-

5.78

17

.61

322.7

5 -

- 0.

00

- -

12.10

1.

30

- -

(104

.77)

- -

(0.05

) -

(5.78

) (1

7.61)

(322

.75)

- -

(0.00

) -

- (1

2.88)

(1.30

) (1

64.56

) -

Deb

tors

- -

- -

- -

- 32

9.20

13.35

-

- -

- -

- -

-

- -

- -

- -

- (4

25.22

) (7

.20)

(0.10

) -

- -

(11.9

2) (0

.06)

(0.04

) (0

.35)

Othe

r Cur

rent

Adva

nce

- -

- -

- -

13.07

63

.97

- -

- -

- -

- -

-

- (1

5.37)

- -

- -

(7.20

) (3

1.40)

- -

- -

- (0

.14)

- -

(0.04

)

Dep

osits

-

- -

- -

- -

- -

- -

- -

0.02

-

- -

- -

- -

- -

- -

(0.41

) -

- -

- (0

.02)

- -

-

Othe

r Adv

ance

( Inc

luding

Ad

vanc

e Tow

ards

Equ

ity)

- 0.

00

- 10

.68

- 0.

28

0.61

0.

63

0.06

4.

25

- 0.

50

0.04

2.

75

- -

-

- -

- -

- -

(0.56

) (6

.90)

(0.05

) (2

5.05)

- (0

.50)

- -

- -

-

Sun

dry C

redit

ors P

ayab

le 20

2.83

36.19

-

- -

22.81

0.

04

14.96

24

1.09

84.96

22

1.96

- 0.

04

68.47

39

2.83

111.1

7 24

.74

(343

.89)

(42.1

0) -

- -

(0.09

) -

(0.01

) (3

18.54

) (5

6.88)

(125

.24)

- (0

.16)

(1.37

) (2

60.38

) (1

25.82

) (4

.73)

Cap

ital A

dvan

ces (

CWIP

) -

- -

- -

- -

- 14

.59

- -

- -

- -

- -

- -

- -

- -

- -

(63.0

2) -

- -

- -

- -

-

Adv

ance

Fro

m Cu

stome

r 0.

15

- -

- -

- 11

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157.5

0 48

7.38

0.05

-

- 0.

00

0.14

-

- 0.

01

(0.15

) -

- -

- -

(9.34

) (5

24.37

) (8

56.90

) (0

.02)

- -

- -

(0.01

) (0

.02)

(0.00

)

Inter

Cor

pora

te De

posit

s Give

n -

- -

- -

- 28

.17

1,00

3.61

- -

- -

- -

- -

-

- -

- -

- -

(27.0

4) (7

22.25

) -

- -

- -

- -

- -

Inter

Cor

pora

te De

posit

s Tak

en

- -

- -

- 27

5.00

- -

- 14

0.34

- -

- 91

6.81

- -

-

- -

- -

- (1

00.00

) -

- -

(145

.72)

- -

- -

- -

-

Sec

urity

Dep

osits

Rec

eived

-

- -

- -

- -

- -

- 4.

22

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Gua

rante

es G

iven

- -

- -

- -

- 1,

116.7

6 -

- -

- -

- -

- -

- -

- -

- -

- (1

,138.5

8) -

- -

- -

- -

- -

Gua

rante

es R

eceiv

ed

- 5,

787.7

1 9,

810.0

2 -

4,49

1.80

- -

- -

- -

- -

- -

- -

- (5

,447.0

0)(9

,574.0

3) -

(4,65

2.03)

- -

- -

- -

- -

- -

- -

Not

e : F

igur

es m

entio

ned

in b

rack

et a

re p

revi

ous

year

figu

res.



79

Bal

ance

out

stan

ding

as

at th

e ye

ar e

nd:

(` in

Cror

e)

Par

ticula

rs

EPG

L E

PL

ESA-

INC

EPJ

L E

OSL

ESP

-FZ

CO E

POOL

E

SOSL

E

PHL

EAH

L E

MRL

E

EPDC

L E

OSPL

V

OTL

VPO

CL

ESL

E

PMPL

Long

Term

Inve

stmen

ts -

23.

14

- -

- 0

.25

2.6

0 5

69.3

9 2

.60

- -

- -

- -

11.5

7 6

8.90

- (2

3.14

) -

- -

(0.2

5) (1

.63)

(373

.43)

(2.6

0) -

- -

- -

- (1

1.57

) (5

.20)

Deb

tors

0.0

0 -

3.8

6 -

- -

- -

- -

- -

- -

- -

-

(1.7

2) -

- -

- -

- -

- -

- -

- -

- -

-

Othe

r Cur

rent

Adva

nce

- -

- -

- -

- -

0.4

6 -

- -

- -

- -

-

- -

- -

- -

- -

(0.3

9) -

- -

- -

- -

-

Dep

osits

-

- -

- -

- -

- -

- -

- -

- -

0.0

0 -

- -

- -

- -

- -

- -

- -

- -

- -

-

Othe

r Adv

ance

( Inc

luding

Ad

vanc

e Tow

ards

Equ

ity)

0.11

-

0.1

6 0

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- -

- 8

3.79

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0.1

8 0

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1 7

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7 -

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59

-

- -

(0.1

6) (0

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- -

- (1

95.9

6) -

(0.1

8) (0

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(0.3

5) -

(0.1

7) -

(67.

93)

(9.4

5)

Sun

dry C

redit

ors P

ayab

le -

- -

0.0

0 2

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- 6

.92

- -

- -

- -

- 8

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64.

50

3.0

4

(0.0

0) -

(0.0

0) -

(58.

57)

- -

- -

- -

- -

- -

(101

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(22.

29)

Cap

ital A

dvan

ces (

CWIP

) -

- -

- -

- -1

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- -

- -

- -

- -

- -

- -

- -

- -

(- 21

.67)

-

- -

- -

- -

- -

-

Adv

ance

Fro

m Cu

stome

r -

- -

- 0

.01

- -

- -

- -

- -

- -

0.0

2 -

- -

- -

(0.0

0) -

- -

- -

- -

- -

- (0

.02)

-

Inter

Cor

pora

te De

posit

s Give

n -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Inter

Cor

pora

te De

posit

s Tak

en

- -

- -

7.2

2 -

- -

- -

- -

- -

192

.94

- -

- -

- -

(491

.37)

- -

- -

- -

- -

- -

- -

Sec

urity

Dep

osits

Rec

eived

-

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- (1

9.78

) -

Gua

rante

es G

iven

49.

23

- -

- -

- 2

6.05

2

,585

.00

43.

93

- -

- -

- -

- 11

3.01

(49.

23)

- -

- -

- (2

6.05

)(2

,482

.13)

(43.

93)

- -

- -

- -

- (1

13.0

1)

Gua

rante

es R

eceiv

ed

- -

- -

- -

- -

- -

- -

- -

- -

-

- -

- -

- -

- -

- -

- -

- -

- -

-


Essar Steel India LimitedB

alan

ce o

utst

andi

ng a

s at

the

year

end

:

(` in

Cror

e)

Par

ticula

rs

EBP

PL

AGC

NL

ETK

L N

TCI

EEP

LC

EGS

F E

SLL

NPP

L P

TOL

TWFL

E

PML

EPT

CL

ESA

LL

VPR

L E

RPL

OSP

IL V

PTL

Long

Term

Inve

stmen

ts -

- -

- -

- -

- -

- -

- -

- -

25.50

-

- -

- -

- -

- -

- -

- -

- -

- -

-

Deb

tors

- -

- -

- -

- -

- -

0.10

-

- -

- -

-

- -

- -

- -

- (0

.34)

- -

- -

- -

- -

-

Othe

r Cur

rent

Adva

nce

- -

- -

- -

- -

- -

0.21

0.

07

0.04

-

- 3,

868.5

0 -

- -

- -

- -

- -

- -

- -

- -

- -

-

Dep

osits

4.

35

- -

- -

- -

- -

- -

- -

- -

- -

(4.35

) -

- -

- -

- -

- -

- -

- -

- -

-

Othe

r Adv

ance

( Inc

luding

Ad

vanc

e Tow

ards

Equ

ity)

- 0.

21

0.06

0.

13

0.55

-

0.05

-

- -

0.00

0.

10

- -

- 6.

13

-

- (0

.21)

(0.06

) (0

.02)

(0.01

) -

(22.8

2) -

- -

(0.21

) -

- -

- -

-

Sun

dry C

redit

ors P

ayab

le 1.

04

- -

- -

1.06

-

- 0.

63

1.72

23

.32

- -

5.51

-

- 43

.58

(1.15

) -

- -

- (1

.06)

(5.46

) (3

.86)

(0.63

) (2

9.43)

(0.06

) -

- (2

.86)

- -

(17.8

9)

Cap

ital A

dvan

ces (

CWIP

) -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Adv

ance

Fro

m Cu

stome

r -

- -

- -

- 0.

03

- -

0.02

-

- -

- 6.

66

- -

- -

- -

- -

- -

- (0

.02)

- -

- -

- -

-

Inter

Cor

pora

te De

posit

s Give

n -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Inter

Cor

pora

te De

posit

s Tak

en

- -

- -

- -

- -

- 40

.66

275.0

0 -

- 20

.80

- -

195.0

0

- -

- -

- -

- (3

2.00)

- (2

80.00

) (1

00.00

) -

- (6

2.28)

- -

(195

.00)

Sec

urity

Dep

osits

Rec

eived

-

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Gua

rante

es G

iven

- -

- -

- -

- -

- -

- -

- -

- -

-

- -

- -

- -

- -

- -

- -

- -

- -

-

Gua

rante

es R

eceiv

ed

- -

- -

- -

- -

- -

- -

- -

- -

-

- -

- -

- -

- -

- -

- -

- -

- -

-

Not

e : F

igur

es m

entio

ned

in b

rack

et a

re p

revi

ous

year

figu

res.



81

38 Leases Operating Lease Residential Houses for staff accommodation, offices and equipments are obtained on operating lease. Lease rent

is payable as per the lease term. The lease term is generally for 11 months and renewable for a further period at the option of the Company. There are no restrictions imposed by lease arrangements.

(` in Crore)

Year Ended31st March, 2015


Finance Lease

Operating Lease

Finance Lease

Operating Lease

Assets taken on Finance Lease on or after 1st April, 2001Total minimum lease payments at the year end 0.64 - 1.91 - Less: amount representing finance charges 0.01 - 0.09 - Present value of minimum lease payments (Rate of Interest 6.00% p.a.)

0.63 - 1.83 -

Lease payments for the year 1.28 36.79 1.28 37.06 Minimum Lease payments :Not later than one year 0.64 29.70 1.28 18.30 Later than one year but not later than five years - 35.08 0.63 43.88 Later than five years - 34.39 - 33.13

39 Employee Benefits (i) Defined Contribution Plan Company’s contribution to Provident Fund aggregating to ` 13.59 Crore (Previous year ` 14.86 Crore) are recognised

in the Statement of Profit and Loss and capital work in progress, as applicable. There is no obligation other than the contribution payable to the respective funds.

(ii) Defined Benefit Plan The Company has a defined benefit Gratuity plan. Every employee who has completed five years or more of service

gets a Gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The plan is funded through a Gratuity Scheme administered by Life Insurance Corporation of India (LIC).

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and Capital Work in Progress -



31st March, 2014Net Employee Benefit Expense Recognised Current Service Cost 4.84 5.32 Interest Cost 4.50 3.90 Expected Return on Plan Assets (3.10) (3.00) Net Actuarial (gain)/loss recognised in the year 6.20 (4.85) Total 12.44 1.37 Actual return on Plan Assets 3.41 3.21

The following tables summarise the components of the funded status and amounts recognised in the Balance Sheet for the respective plans -

(` in Crore)As at


31st March, 2014Details of Provision for Gratuity Present Value of Obligation (A) 63.20 51.38 Fair value of Plan Assets (B) (39.91) (36.38) Liability Recognised in Balance Sheet (Refer note 7) 23.29 15.00




(` in Crore)As at


31st March, 2014(A) Changes in the present value of the defined benefit

obligation are as follows: Projected Benefit Obligations (PBO) at the beginning of the year

51.38 51.76

Interest Cost 4.50 3.90 Service Cost 4.84 5.32 Benefits paid (5.02) (4.96)Acquisition/Transfer In/(Transfer Out) 0.99 - Actuarial (gain)/loss on obligations 6.52 (4.64)PBO at the end of the year 63.20 51.38

(B) Changes in the fair value of plan assets are as follows:

Fair Value of Plan Assets at the beginning of the year

36.38 37.41

Acquisition Adjustment 2.90 - Expected Return on Plan Assets 3.10 3.00 Contributions/Transfers 2.24 0.72 Benefits paid (5.02) (4.96)Actuarial Gain / (loss) on Plan Assets 0.32 0.21 Fair Value of Plan Assets at the end of the year 39.91 36.38

Investment details of plan assets100% of the plan assets are administered by LIC.

AssumptionsDiscount Rate 7.80% 9.20%Rate of Return on Plan Assets 8.50% 8.50%Mortality Indian Assured Lives

Mortality (2006-08)Indian Assured Lives Mortality (2006 - 08)

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Experience History (` in Crore)

ParticularsAs at

31st March, 2015

As at 31st March,

2014

As at 31st March,

2013

As at 31st March,

2012

As at 31st March,

2011Defined Benefit Obligation at end of the period (63.20) (51.38) (51.76) (44.85) (37.19)Plan assets at end of the period 39.91 36.38 37.41 36.84 33.01 Funded Status (23.29) (15.00) (14.35) (8.01) (4.18)Experience Gain/(Loss) adjustments on plan liabilities (1.54) 0.48 0.75 (4.22) (2.44)Experience Gain/(Loss) adjustments on plan assets 0.32 0.21 0.42 1.57 1.17 Actuarial Gain/(Loss) due to change in assumptions (4.98) 4.15 (2.19) 1.71 0.73 The Company expects to contribute ` 1.00 Crore to its plan assets in Financial Year 2015 -16.

40 The Company has undertaken substantial expansion plans for its steel production capacities by installing new steel facilities at Hazira, Pellet plant at Odisha, and Slurry Pipeline (for transportation of slurry from Beneficiation plant to Pellet plant) to feed the pellet requirement of new steel facility. These plants constitute an integrated facility, being set up by using new technology to achieve higher output at lower cost of inputs. Although completion and commencement of steel manufacturing plants at Hazira (Hazira Units) was achieved in phases in earlier period, Slurry pipeline in Odisha was made operative during current financial year and as per relevant accounting standard the commercial production from other integrated facilities comprising of Hazira Units, Pellet Plant Phase -1 commenced at the end of the year as a result of which abnormal costs have been incurred during the year by Hazira Units due to their operation at sub-optimal level.




83

Abnormal costs incurred during current year of ` 1,203.14 Crore (Previous Year ` 1,227.54 Crore) related to Hazira Units have been capitalised on the basis of opinion received from eminent experts in the field of accountancy after considering relevant accounting standards read with other pronouncements by the Institute of Chartered Accountants of India. However finance cost relating to Hazira Units have been continued to be charged to Statement of Profit and Loss as per the accounting policy and Accounting Standard - 16 – “Borrowing Costs”

41 Earnings Per Share: Year Ended


31st March, 2014Net Profit/(Loss) as per statement of Profit & Loss ` Crore 648.05 ` Crore (1,597.14)Less: Dividend on Preference Shares for the year (including dividend distribution tax)

` Crore (5.10) ` Crore (5.10)

Net Earning/(loss) for the purpose of basic and diluted earning per shares

` Crore 642.95 ` Crore (1,602.24)

Weighted average number of shares for the purpose of calculating Basic earning per share

2,842,516,501 2,809,319,278

Weighted average number of shares for the purpose of calculating Diluted earning per share

2,842,516,501 2,809,319,278

Earnings/(Loss) Per Share Basic earning/(loss) per Equity share of `10 each (in `) 2.26 (5.70) Diluted earning/(loss) per Equity share of ` 10 each (in `) 2.26 (5.70)

42 Derivative Instruments and Unhedged Foreign Currency ExposureA Derivative Instruments

Sr.No.

Type of Transaction Amount31st March, 2015

Amount31st March, 2014

Currency Purpose

1 Coupon Only Swaps (USD / INR)

- 1,000,000,000 INR To reduce the interest cost on Long Term Rupee Term loan

2 Rupee Indexed Interest Rate Swaps (Overnight Index Swap)

500,000,000 1,500,000,000 INR To reduce the interest cost on Long Term Rupee Term loan

3 Principal Only Swap 16,490,000,000 27,990,000,000 INR To hedge the economic exposure on future dollar linked sales

4 Cross Currency Interest Rate Swap

1,000,000,000 1,000,000,000 INR To hedge the economic exposure on future dollar linked sales

5 Forward sale contracts (USD / INR)

255,000,000 300,781,870 USD To hedge the exchange risk on export receivables

6 Forward purchase contracts (USD / INR)

156,828,618 27,122,759 USD To hedge the exchange risk on BC Payables


33,947,020 - USD To hedge the exchange risk on Letter of Credit / Acceptance


11,730,000 - USD To hedge the exchange risk on Sundry Creditors

9 Forward purchase contracts (EURO/INR)

- 5,107,812 EURO To hedge the exchange risk on export receivables

10 Cross Currency EURO/USD Forward purchase contracts

3,950,550 - EURO To hedge the exchange risk on BC Payables

11 Cross Currency EURO/USD Forward sale contracts

3,500,000 - EURO To hedge the exchange risk on export receivables




(B) Unhedged Foreign Currency Exposure*Sr.No.

Particulars of Transaction Foreign Currency (FC)

As at 31st March, 2015 As at 31st March, 2014Amount in

FCAmount

(` in Crore) Amount in FC

Amount (` in Crore)

1 Sundry Creditors CHF 4,789 0.03 9,839 0.07 EUR 13,310,512 89.86 15,310,713 126.43 GBP 13,115 0.12 50,545 0.50 JPY 33,849,808 1.76 32,073,710 1.89 USD 66,309,078 415.03 65,650,208 394.56 NOK 1,251,571 0.97 1,422,934 1.42 SGD 600 0.00 600 0.00 AED 16,674,991 28.37 1,134,059 1.85 CAD 21,343 0.10 2,996 0.02

2 Buyers Credit EUR 3,382,418 22.83 21,261,112 175.57 AED 3,381,000 5.75 - - USD 20,207,407 126.48 134,070,819 805.76

3 Term Loans USD 1,104,953,218 6,915.99 1,044,610,140 6,278.09 4 Sundry Debtors USD 46,960,824 293.93 58,417,225 351.09

EUR 923,515 6.23 14,707,817 121.45 AED 636,261 1.08 636,261 1.04

5 Advance from Customers AED 245,146 0.42 245,146 0.40 EUR 63,936 0.43 - - USD 1,358,609,904 8,503.65 358,297,403 2,153.36

6 Short Term Loans & Advances and Other Current Assets

USD 178,469,498 1,117.05 131,777,741 791.98

7 Cash and Bank Balances USD 165,826 1.04 192,685 1.16 8 Letter of Credit/ Acceptances EUR 92,872 0.63 564,528 4.66

USD 12,368,687 77.42 23,028,638 138.40 9 Working Capital Loans USD 63,557,075 397.81 - -

10 Interest Accrued on Credit Facilities

USD 29,442,209 184.28 22,685,067 136.34 AED 1,659 0.00 - - EUR 6,369 0.04 62,755 0.52

* The Company consistently enjoys natural hedge in the form of substantial export volume (besides ‘import price parity’ based domestic revenue) to offset USD/INR exchange fluctuation risk that may arise out of unhedged foreign currency liability exposure as stated above.

43 Production Unit Year Ended


31st March, 2014(a) Production *

Iron Ore Pellet MT 4,739,555 5,548,825 Hot Briquette Iron / Direct Reduced Iron MT 829,592 1,220,591 Hot Metal MT 2,619,530 2,535,280 Hot Rolled Coils/Cold Rolled Coils/Plates MT 2,524,405 2,732,941 Plates MT 629,799 473,116 Pipes MT 178,254 132,465

(b) Captive Consumption *Iron Ore Pellet MT 3,527,855 4,768,140 Hot Briquette Iron MT 787,552 1,190,906 Hot Rolled Coils/ Plates** MT 276,517 193,902 Pipes MT 1,659 3,019

* Including Trial Run if any** Including consumption of purchases material 94,385 MT (Previous Year- 53,289 MT).




85

44 Value of Imports calculated on CIF basis (` in Crore)Year Ended


31st March, 2014Raw Materials 2,544.82 1,823.12 Production Consumables, Stores and Spares & Fuel 538.27 451.51 Capital Goods 27.76 25.16

3,110.85 2,299.79

45 Expenditure in Foreign Currency (on accrual basis) (` in Crore)Year Ended


31st March, 2014Interest 511.92 391.45 Commission 96.33 121.24 Professional Fees 45.37 29.37 Capital Contract & Services 6.04 0.36 Others 15.20 30.89

674.86 573.31

46 Earnings in Foreign Currency (` in Crore)Year Ended


31st March, 2014(a) FOB Value of Exports* 1,974.49 3,939.19 (b) Others

Freight recovered 113.26 231.31 Interest 35.87 26.76 Others 0.21 17.45

2,123.83 4,214.71

* In addition to the above, the Company has also made exports (including deemed export through canalising agencies as supporting manufacturer) amounting to ̀ 2,694.48 Crore (Previous Year ̀ 131.35 Crore) at a price linked to USD but received in Indian Rupees.

47 Capital Work-in-Progress (including expenditure during construction period) (` in Crore)



Plant & Machinery and Building including supervision, technical know-how, other capital expenditure and Capital items in stock

2,890.17 21,947.81

Mining Rights and Exploration Expenses 30.82 30.82 Preoperative Expenditure for the year(A) Employee Benefits Expense :

Salaries 7.16 13.79 Contribution to Provident Fund, Gratuity and Other Funds

0.68 0.34

Staff Welfare Expenses 1.54 2.48 9.39 16.61

(B) Manufacturing and Asset Maintenance :Repairs & Maintenance and Insurance 0.42 1.68 Stores, Spares & Consumable - 0.59

0.42 2.27






(C) Administrative Expenses :Traveling, Conveyance Expenses, Vehicle Hire and Maintenance Charges

1.06 1.59

Postage Telephone and Fax 1.08 0.06 Professional Fees 4.32 5.76 Rates and Taxes - 0.01 Depreciation 2.56 1.66 Operating Lease Rent - 0.44 Supervision Charges & Survey Expenses - 0.41 Miscellaneous Expenses - 10.28

9.01 20.21 (D) Finance Costs :

Bank Charges (including LC Charges, Management and Processing Fees)

30.73 27.75

Interest on Term Loan 804.56 640.34 Interest to Bank & others 84.15 41.49

919.44 709.58 (E) Foreign Exchange Fluctuation (AS-11

notification) 227.74 542.49

(F) Interest on Deposits with Banks & Others (3.74) (2.17)(G) Net Expenses on Trial Run for the Year (Refer Note

47 (a) given below) 1,490.21 1,404.01

Preoperative Expenditure during the Year 2,652.47 2,693.01 Add: Opening Preoperative Expenditure 5,316.15 2,649.52 Less: Allocated/transferred/capitalised during the Year (6,307.25) (26.38)Closing Preoperative Expenditure 1,661.37 5,316.15 Total Capital Work-in-Progress 4,582.36 27,294.78

47(a) Net Expenses on Trial Run (` in Crore)Year Ended

31st March, 2015 Year Ended

31st March, 2014IncomeRevenue from Operations 2,322.59 2,098.54 Less: Excise Duty Paid 228.71 177.52 Revenue 2,093.88 1,921.02 Other Income 2.23 17.02 Total Income 2,096.11 1,938.04 ExpensesCost of Materials Consumed 2,570.99 2,359.34 Energy Cost 525.22 560.87 Changes in Inventories of Finished Goods and Work in Progress

(40.56) 37.55

Employee Benefits Expense 160.01 105.94 Manufacturing & Asset Maintenance 157.72 123.01 Administrative Expenses 160.26 133.75 Selling & Distribution Expenses 52.69 21.59

3,586.32 3,342.05 Net expenses on Trial Run for the Year -Transfer to Capital Work in Progress

(1,490.21)

(1,404.01)




87

48 The Company has circulated confirmation for the identification of suppliers registered under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the confirmations received by the Company from certain parties, no disclosures relating to amounts as at the year end together with interest paid / payable is required to be given.

49 The excess amount of current liabilities over current assets includes short term borrowings and current maturity of long term debt (repayable within one year). The Company is actively pursuing efforts to improve the net working capital through realization of funds of ` 11,200 Crore from monetization of identified assets.

50 Short Term Provisions Provision for Indirect Tax Matter:

In respect of SEZ matter, the Company had paid custom duty (Basic duty, countervailing duty and cess) ` 180.73 Crore towards clearance made for the period 27th October, 2006 to 11th April, 2007 against Show Cause Notice (SCN) dated 7th April, 2008 issued by DGCEI pending investigation. Subsequently the Company availed CENVAT credit of ` 140.35 Crore towards countervailing duty and cess out of the said deposit paid based on a legal opinion received. A provision has been made for ` 19.73 Crore being non cenvatable portion of Custom duty paid for the period 11th January, 2007 to 20th March, 2007.

Further, the Company received a show-cause notice from the Commissioner of Central Excise and Customs for availing such credit and the Company submitted its response against the said notice received. The Company also filed a special civil application before the Honorable High Court of Gujarat seeking to quash the restriction on utilization of CENVAT Credit. The Honorable High Court granted interim stay on 11th February, 2009 on the restriction to avail the CENVAT. The Company was also advised by counsels that there is no restriction to utilize the disputed credit in wake of the High Court Order; and accordingly the Company utilized ` 124.54 Crore for discharging the excise duty liability till 31st March, 2009.

The Supreme Court vide order dated 15th April, 2009 ordered to maintain the status as on date and accordingly the balance of ` 15.81 Crore, remaining to be utilized as on the date of order has been kept un-utilized. Further vide order dated 7th March, 2011 the Supreme Court referred the matter back to Commissioner of Central Excise & Customs to take a final decision in the matter within four months with continuation of Interim Order dated 15th April, 2009.

As per the directions of the Hon’ble Supreme Court order dated 7th March, 2011, the Commissioner of Central Excise Surat –I passed an adjudication order dated 28th June, 2011 demanding the reversal of the CENVAT Credit availed along with applicable interest and imposed penalty of ` 25 lacs on the Company. The Company has preferred an appeal with Stay application to the CESTAT against the order issued. CESTAT heard the appeal and remanded the matter to Commissioner, with a direction that the notice to be adjudicated along with the main notice dated 7th April, 2008 (which relates to duty demand and deposits made by the company). As per directions of CESTAT `15.81 Crore to be kept as balance in Cenvat credit account. Since the normal adjudication process have resumed; the Hon’ble Supreme Court disposed the Department petition as infructuous vide its order dated 8th July, 2011.

51 Long Term Borrowings (` in Crore)



(1) Non Convertible Debentures Secured by pari passu first charge on movable fixed assets and mortgage

of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land). 16.5% Non-Convertible

Debentures redeemable on annual basis starting from June 16 (15.87%), June 17 (42.07% ), June 18 (42.07%)

312.00 320.00

312.00 320.00 (2) Term Loans From Banks and Others Secured by pari passu first charge on movable fixed assets and mortgage

of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The balance loan is repayable in quarterly installments during Financial Year 2015-16 (24.10%), 2016-17 (32.97%) and 2017-18 (42.93%).

4,909.99 10,538.19

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The Balance Loan will be converted to Rupee Loan during Financial year 2016-17 (90%) and Financial year 2017-18 (10%).

533.71 512.47




(` in Crore) As at


31st March, 2014 Secured by pari passu first charge on fixed assets (except assets forming

part of Nandniketan Township, Service Centers and 19 MW waste heat recovery power plant) and pari passu second charge on current assets of the Company. The balance loan is repayable in equal quarterly installments of 10% till July 2016.

30.44 114.57

First pari passu charge on all present and future fixed assets of the Borrower including all land available with the borrower (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company. The balance loan is repayable 10 half yearly installments of 5%, 5%,7.5%,7.5%,12.5%, 12.5% 12.5%12.5%, 12.5% &12.5% starting from January 2020.

469.43 -

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company.

a) The balance loan is repayable in half yearly installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (10.53%), 2019-20 (14.74%),2020-21 (14.74%),2021-22 (16.84%) and 2022-23 (16.84%).

124.87 126.21

b) The balance loan is repayable in 13 half-yearly installments of 2.50%, 2.50%, 2.50%, 2.50%, 5%, 5%, 10%, 10%, 10%, 12.50%, 12.50%, 12.50% and 12.50% starting December 2015.

375.54 360.60

(c) The balance loan is repayable in annual installments during Financial Year 2015-16 (10.00%), 2016-17 (10.00%), 2017-18 (10.00%), 2018-19 (14.00%), 2019-20 (14.00%), 2020-21 (14.00%), 2021-22 (14.00%), 2022-23 (14.00%).

31.30 30.05

(d) The balance loan is repayable in annual installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%), 2022-23 (14.74%).

237.85 240.40

(e) The balance loan is repayable 10 half yearly installments of 5%, 5%, 7.5%, 7.5%, 12.5%, 12.5%, 12.5%, 12.5%, 12.5% and 12.5% starting March 2018.

1,001.45 961.60

(f) The balance loan is repayable in annual installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%), 2022-23 (14.74%).

743.27 751.25

g) The balance loan is repayable 10 half yearly installments of 5%, 5%, 7.5%, 7.5%, 12.5%, 12.5%, 12.5%, 12.5%, 12.5%, and 12.5% starting September 2018.

143.96 138.23

h) The balance loan is repayable in annual installments during Financial Year 2015-16 (10.00%), 2016-17 (10.00%), 2017-18 (10.00%), 2018-19 (14.00%), 2019-20 (14.00%), 2020-21 (14.00%), 2021-22 (14.00%), 2022-23 (14.00%).

93.89 90.15

i) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting July 15.

137.70 132.22

j) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting Sept 15.

250.36 240.40

k) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting Nov’15.

87.63 84.14

l) The balance loan is repayable in 20 Quarterly installments during Financial Year 2015-16 (17.24%), 2016-17 (13.79%), 2017-18 (13.79%), 2018-19 (27.59%), 2019-20 (27.59%).

522.57 553.68




89

(` in Crore) As at


31st March, 2014 m) The balance loan is repayable in quarterly installments during Financial

Year 2015-16 (17.24%), 2016-17 (13.79%), 2017-18 (13.79%), 2018-19 (27.59%), 2019-20 (27.59%).

267.11 283.01

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders.

a) The balance loan is repayable in yearly installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%),2020-21 (14.74%),2021-22 (14.74%) and 2022-23 (14.74%).

535.15 540.90

b) The balance loan is repayable in annual installments during Financial Year 2015-16 (3.09%), 2016-17 (4.12%), 2017-18 (6.19%), 2018-19 (10.31%), 2019-20 (17.53%),2020-21 (17.53%), 2021-22 (20.62%) and 2022-23 (20.62%).

303.57 300.50

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. Balance Loan will be repaid in 11 Quarterly Installment during financial year 2015-16 (44.58%), 2016-17 (55.42%)

1,502.02 1,995.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Mauritius Limited and personal guarantee of a promoter. Loan will be repaid in Quarterly Installments during financial year 2015-16 (2.20%), 2016-17(4.40%), 2017-18(4.40%), 2018-19(11.00%), 2019-20(20.81%), 2020-21(20.98%), 2021-22(20.73%), 2022-23 (15.48%) till September 2022.

2,955.00 3,085.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Limited and personal guarantee of a promoter. Balance Loan will be repaid in Quarterly Installments during financial year 2016-17 (2.53%), 2017-18 (5.07%), 2018-19 (15.20%), 2019-20 (15.20%), 2020-21 (15.08%), 2021-22 (14.95%), 2022-23 (14.95%), 2023-24 ( 17.02%) starting from December 2016.

5,337.41 4,801.55

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Limited and personal guarantee of a promoter. Balance Loan will be repaid in Quarterly Installments during financial year 2016-17 (2.50%), 2017-18 (5.00%), 2018-19 (15.00%), 2019-20 (15.00%), 2020-21 (15.00%), 2021-22 (15.00%), 2022-23 (15.00%), 2023-24 (17.50%) starting from December 2016.

154.84 -

Secured by subservient charge on moveable fixed assets and current assets.The loan will be repaid during Financial Year 2015-16.

12.75 700.00




(` in Crore) As at


31st March, 2014 Secured by subservient charge on all moveable fixed assets & current assets

of the company, Corporate Guarantee of Essar Steel Limited and pledge of certain shares held in the company by its shareholders. Balance Loan is repayable in eight equal quarterly installment of 13.21% starting from August 2016 to February 2018 and 7.5% in May’2018.

175.00 175.00

Secured by Pledge of Shares held in EPOL & BPOL held as investments by the company, subservient charge on all moveable fixed assets & current assets of the company, Corporate Guarantee of Essar Steel Limited, Essar Steel Asia Holding Limited & Essar Steel Mauritius Limited and pledge of certain shares held in the company by its shareholders. Loan is repayable in equal monthly Installments till Sept’16.

125.04 165.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held by pledge providers in ESIL, Corporate Guarantee of Essar Steel Asia Holding limited & Essar Steel Mauritius Limited. The balance loan is repayable in 12 half yearly installments of 5%, 5%, 7.5%, 7.5%, 7.5%, 7.5%, 7.5%, 7.5%, 10%, 10%, 12.5% and 12.5% starting September 2016.

704.15 676.12

Secured by subservient charge on its fixed movable and current assets of the Company. The loan will be repaid during financial year 2015-16.

100.00 100.00

Secured by subservient charge on its fixed movable and current assets of the Company.Loan will be repaid in 4 equal quarterly installments Starting from June 2015.

63.00 -

Secured by subservient charge on its movable fixed assets and current assets of the company located at Hazira. The loan is repayable during January 2016.

175.00 -

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company. The loan was completely repaid during financial year 2014-15.

- 19.16

Secured by pari passu first charge on fixed assets (other than any immovable properties forming part of the Nandniketan Township, Service Centres and the Power Plant) of the Company. The loan was completely repaid during financial year 2014-15.

- 47.22

Secured by pari passu first charge on all fixed assets and pari passu second charge on all current assets of the Company. The loan was completely repaid during financial year 2014-15.

- 5.49

22,103.98 27,768.10

(3) Buyers Credit Capital Expenditure Secured by pari passu first charge on movable fixed assets and mortgage

of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The facility shall be converted into long term loans on maturity.

51.12 503.11

51.12 503.11 (4) Dollar Notes / Rupee Notes Rupee Notes is repayable up to 31st March, 2018 Dollar Notes is repayable

on 31st March, 2018. 226.32 226.30

(5) Payment of the Deferred Sales Tax Benefit shall be made during financial year 2016-17 (5.17%), 2017-18 (10.36%), 2018-19 (15.85%), 2019-20 (20.00%), 2020-21 (20.00%), 2021-22 (14.83%), 2022-23 (9.64%), 2023-24 (9.15%)for each year’s collection (i.e. collection from 2005-06 to 2008-09) starting from April, 2016.

33.32 33.88




91

(` in Crore) As at


31st March, 2014Short Term Borrowing Notes(1) Short Term Loans From Banks Secured by subservient charge on all fixed assets of the company. The

Loan will be repaid in March 2016. 100.00 -

100.00 -

(2) Working Capital Loans - From Banks Working Capital Loans are secured by pari passu first charge on the current

assets of the Company, second charge on fixed assets of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and Corporate Guarantee of Essar Investments Limited.

2,026.02 377.69

2,026.02 377.69 (3) Buyers' Credit for Operational Expenditure Secured by margin deposits with the banks & secured by first charge on the

current assets, second charge on the fixed assets (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and Corporate Guarantee of Essar Investments Limited.

1,084.16 683.40

1,084.16 683.40

51A Details of Loans given, Investments made and Guarantee given covered U/S 186 (4) of the Companies Act, 2013 during the year :

(` in Crore)

Sr. No.

Name of Entity Year Ended31st March, 2015

(a) Loan given (Inter Corporate Deposits) *Essar Steel Middle East FZE 307.84

(b) Investment made (incl. Advance towards equity)Essar Steel Offshore Limited 83.79Essar Power MP Limited 54.25Odisha Slurry Pipe Line Infrastructure Limited 31.63Essar Power Orissa Limited 0.97Paradeep Steel Company Limited 0.15

* Loan has been given for business purposes.

52 The figures of the previous year has been regrouped, where necessary, to conform to current year’s classification.








INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF ESSAR STEEL INDIA LIMITEDReport on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of ESSAR STEEL INDIA LIMITED (hereinafter referred to as the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as the “Group”) and its associates comprising the Consolidated Balance Sheet as at 31st March, 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

Management’s Responsibility for the Consolidated Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of the appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Basis for Qualified Opinion

The Holding Company has recognised deferred tax asset of ` 1,879.07 Crore on unabsorbed depreciation and carried forward business losses based on future profitability projections made by the management as stated in Note 16 of the consolidated financial statements. In our opinion, after considering sub note (b) of the aforesaid note 16, out of the aforesaid deferred tax asset, ` 1,196.03 Crore does not meet the criteria of ‘virtual certainty supported by convincing evidence’ as required under Accounting Standard (AS) 22- Accounting for taxes on Income. Had the deferred tax asset amounting to ` 1,196.03 Crore not been recognized, consolidated accumulated losses would have been higher and the deferred tax asset would have been lower by ` 1,196.03 Crore. This matter was also qualified in our report on the consolidated financial statements for the year ended 31st March, 2014.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of other auditors on the financial statements of the subsidiaries and associates referred to below in sub-paragraph (a) of the Other Matters paragraph, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its associates



93

as at 31st March, 2015, and its consolidated profit and its consolidated cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the consolidated financial statements:

1. Note 49 regarding challenges faced by Trinity Parent Corporation, USA (“Trinity”), an indirect subsidiary of the Company, engaged in the extraction of steam and metallurgical coal, through its various subsidiaries. For reasons explained in the Note, no adjustments have been made to the carrying values of assets and liabilities of Trinity in the Consolidated Financial Statements.

2. Note 47 regarding Group’s current liabilities exceeding its current assets by ` 8474.37 Crore (previous year ` 6,125.92 Crore) as at 31st March, 2015. The Company believes that for the reasons stated in the said Note, it will have adequate liquidity to meet its liabilities as and when they fall due.

3. Note 7 regarding long term loans including current maturities amounting to ` 1,417.72 Crore which have been considered as Non-Current for the reasons explained in the said Note.

4. Note 42 regarding accounting treatment of expenses incurred on the expanded facility at Hazira post completion but pending completion of integrated facility. For reasons explained in the Note, the holding company has capitalized abnormal operating expenses amounting to ` 1,203.14 Crore incurred during the year related to this facility and not provided depreciation for the said facility for the period of from 1st April, 2014 to 30th March, 2015 as the said facility has been capitalized on 31st March, 2015. The holding company has relied upon opinions received from eminent experts in the field of Accountancy confirming that this accounting treatment is in accordance with requirements of relevant Accounting Standards issued by the Institute of Chartered Accountants of India.

5. Note 50 regarding dispute between the Holding Company and one of its associates with regard to payment of fixed charges under Power Purchase Agreement and impairment of assets of the said associate. In view of mitigation plan mentioned in the said Note, no impairment provision is required in carrying value of its assets.

Our opinion is not qualified in respect of the above matters.

Other Matters

(a) We did not audit the financial statements of four subsidiaries whose financial statements reflect total assets (net) of ` 2693.78 Crore as at 31st March, 2015, total revenues of ` 1,525.92 Crore and net cash inflows amounting to ` 6.20 Crore for the year

ended on that date, as considered in the consolidated financial statements. We also did not audit financial statements of three associates whose financial statements reflect Group’s share of net profit of ` 0.35 Crore. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to amounts and disclosures included in respect of these subsidiaries and associates and our report in terms of sub-section (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and associates, is based solely on the reports of the other auditors.

(b) We did not audit the financial statements of twenty four step down subsidiaries, whose consolidated financial Statements reflect total assets (net) of ` 3,422.27 Crore as at 31st March 2015, total revenue of ` 171.99 Crore and net cash flows amounting to ` (33.27) Crore for the year ended on that date, as considered in the consolidated financial Statements. The consolidated financial statements include Group’s share of net profit of ` (8.91) Crore for the year ended 31st March, 2015, as considered in consolidated financial statements, in respect of three associates, whose financial statements have not been audited. These financial statements are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as as it relates to the amounts and disclosures included in respect of these subsidiaries and associates, and our report in terms of sub-section (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and associates, is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the Management, these financial statements are material to the Group.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of above matters with respect to our reliance on the work done and report of the other auditors and financial statements certified by the Management.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditors’ reports of the Holding Company, subsidiary company and associate companies incorporated in India and in respect of whom audit reports are available, we give in the annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report,



to the extent applicable, that :

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

b) In our opinion, except for the effect of the matter described in the Basis of Qualified Opinion paragraph above, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

d) In our opinion, except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) Attention is invited to Note 47 in the financial statements regarding Group’s plan of monetisation of identified assets to bridge the gap between current liabilities and current assets. In our opinion, the matters described in sub-paragraphs 2 and 3 under the Emphasis of Matters paragraph above may have an adverse effect on the functioning of the Group if these plan do not fructify.

f) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the other statutory auditors of its subsidiary and associate companies incorporated in India, none of the directors of the Group companies and its associate companies incorporated in India and in respect of whom audit reports are available, is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

g) The qualification relating to the maintenance of accounts with regard to Deferred Tax Asset is as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Group and its associates have disclosed the impact of pending litigations on its financial position in the consolidated financial statements vide Note 36.

(ii) The Group and its associates have made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, its subsidiary and associate companies incorporated in India.




Membership No. 031118Mumbai29th August, 2015

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date.)

Our reporting on the order includes one subsidiary company and three associate companies incorporated in India, to which the order is applicable, which have been audited by other auditors (hereinafter collectively referred to as “respective entities” / “aforesaid companies”) and our report in respect of these entities is based solely on the reports of the other auditors, to the extent considered applicable for reporting under the Order in the case of the consolidated financial statements.

In respect of three associate companies incorporated in India, which have been included in the consolidated financial statements based on unaudited financial statements of such entities provided to us by the Management, whilst in our opinion, and according to the information and explanations given to us, reporting under the Order is applicable in



95

respect of these entities, since these entities are unaudited, the possible effects of the same on our reporting under the Order in the case of these consolidated financial statements has not been considered.

(i) In respect of the fixed assets of the Holding Company, subsidiary company and associate companies incorporated in India:

(a) The respective entities have maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management of respective entities in accordance with a regular programme of verification which, in our opinion and the opinion of other auditors, provides for physical verification of all fixed assets at reasonable intervals. According to the information and explanation given to us and other auditors, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories of the Holding Company, subsidiary company and associate companies incorporated in India which hold inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management of the respective entities at reasonable intervals.

(b) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the procedures of physical verification of inventories followed by the management of respective entities were reasonable and adequate in relation to the size of the respective entities and the nature of its business.

(c) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the respective entities have maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us and the other auditors, the Holding Company, subsidiary company and associate companies incorporated in India have not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Act.

(iv) In our opinion and the opinion of the other auditors and according to the information and explanations

given to us and the other auditors, there is an adequate internal control system in the respective entities commensurate with the size of the respective entities and the nature of its businesses with regard to purchase of inventory and fixed assets and for the sale of goods and services during the course of our and other auditors audit, no continuing failure to correct major weaknesses in such internal control system has been observed.

(v) According to the information and explanations given to us, the Holding Company, subsidiary company and associate companies incorporated in India have not accepted any deposit from the public during the year.

(vi) According to the information and explanations given to us and the other auditors, in our opinion and opinion of the other auditors, the Holding Company, subsidiary company and associate companies incorporated in India have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost records and Audit) Rules, 2014 as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013. Neither we nor the other auditors have, however, made detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues of the Holding Company, subsidiary company and associate companies incorporated in India:

(a) The respective entities have generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income- Tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to the respective entities with the appropriate authorities.

(b) There were no undisputed amounts payable by respective entities in respect of Provident Fund, Employees’ State Insurance, Income-Tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Services Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited as on 31st March, 2015 on account of disputes by the aforesaid entities are given below:



Sr. No.

Name of the statute



Amount disputed

(` in Crore)

Amount deposited

(` in Crore)

1 The Income tax Act, 1961

Income Tax Liability Commissioner of Income tax (appeal) Mumbai

Various years from AY 2007-08,

AY 2011-12 and AY 2012-13.

38.45 Nil

2 The Customs Act, 1962

Customs Duty Commissioner of Central Excise, Surat

2006 & 2007 186.17 186.17

Customs Duty Supreme Court 1991 66.81 NilCustoms Duty Commissioner

of Customs, Ahmedabad

Apr 12 - Dec 12 35.43 5.00

a) Customs DutyCESTAT, Bangalore 1998-99

18.46 Nilb) Penalty 20.00 Nila) Customs Duty

CESTAT, Mumbai2004-05

4.42 Nilb) Penalty 4.42 NilCustoms Duty 2011-12 2.15 NilCustoms Duty High Court,

Hyderabad1995 1.32 Nil

Customs Duty CESTAT, Mumbai 2008-09 0.12 Nil3 Central Excise

Act, 1944a) Excise Duty

CESTAT, Delhi Sep 2007 - Oct 200737.64 -

b) Penalty 37.64 -Excise Duty Gujarat High Court June 1995 - Sep

199733.32 1.81

a) Excise DutySupreme Court July 2000 to June

2005

21.03 8.00

b) Penalty 20.63 -a) CENVAT credit

CESTAT, New Delhi March 2006 to July 2010

1.87 Nilb) Penalty 1.87 Nila) CENVAT credit

CESTAT 2006-20111.50 0.05

b) Penalty 1.50 NilExcise Duty Asst. Comm. of

CentralExcise, Div. - IV, Surat

March 2004 1.98 Nil

a) Excise Duty CESTAT, Ahmedabad September 2005

0.72 0.57b) Penalty 0.72 NilExcise Duty Joint Commissioner,

CESTAT2002 to 2004 0.60 Nil

a) Excise Duty Commissioner Appeal 2010-11

0.27 Nilb) Penalty 0.13 Nila) CENVAT credit Commissioner of

Central Excise, Vadodara

Dec 10-Aug 110.05 Nil

b) Penalty 0.05 Nil

4 Finance Act,1994 (Service Tax)

Service tax CESTAT-Mumbai 2006-07 0.89 Nila) Service tax Commissioner

(Appeals), VizagJune, 2007 to

September, 20110.11 Nil

b) Penalty 0.11 Nil



97

Sr. No.

Name of the statute



Amount disputed

(` in Crore)

Amount deposited

(` in Crore)

5 The Gujarat Sales tax Act

a) Sales Tax Joint Commissioner of sales tax

April 2005 - March 2006

10.22 2.56b) Penalty 15.33 NilSales Tax Joint commissioner

of sales tax1998-1999 1.36 Nil


1997 to 1999 1.08 Nil

Sales Tax Gujarat VAT Tribunal 1994-1995 0.90 0.05Sales Tax Joint Commissioner 1995-96 0.75 NilSales Tax Joint Commissioner 2000-01 0.49 Nil

6 Orissa Value Added Tax Act, 2004

Entry Tax SC of India April 2008 to November 2012 14.75 7.38

7 The Central Sales Tax Act Sales Tax STAT 2004-05 0.46 0.22

8 AP VAT Act Sales Tax STAT 2005-06 to 2008-09 0.13 NilAP High Court Sep 13 - Oct 13 0.20 0.05

9 Gujarat Green Cess Act, 2011

Green Cess Duty Hon’ble Supreme Court of India

As on 31st March, 2015

6.98 3.23

(d) The respective entities are not required to transfer any amount to Investor Education and Protection Fund in accordance with relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

(viii) The consolidated accumulated losses of the Holding Company, subsidiary company and associate companies incorporated in India at the end of the financial year are not more than fifty percent of the consolidated net worth of the aforesaid companies. The aforesaid companies have not incurred any cash losses on a consolidated basis during the financial year covered by our audit, but had incurred consolidated cash losses in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the holding Company has delayed the repayment of certain dues to financial institutions, banks and debenture holders during the year which have generally been regularised within 90 days. Further, the dues on account of outstanding interest of ` 414.19 Crore and principal of ` 126.75 Crore, pertaining to the period ended 31st March 2015 have since been paid by the holding company. Further, in the opinion and according to the information and explanations given to the other auditors, out of the three associate companies, one company has delayed payment of interest to banks and financial institutions from 6 to 168 days amounting to ` 58.60 crore, out of which, ` 30.04 Crore has been regularised within 6 to 141 days. Although the other two associate companies have also delayed aforesaid payments, delay/amounts are not being quantified as, in our view, the Holding Company has immaterial investments of ̀ 2.60 Crore

(which constitutes less than 1% economic interest) in each of these associates companies.

(x) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and to the other auditors, the terms and conditions of the guarantees given by the relevant entities for loans taken by others outside of the Group, from banks and financial institutions are not, prima facie, prejudicial to the interest of the Group.

(xi) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the term loans have been, prima facie, applied by the Holding Company, subsidiary company and associate companies incorporated in India, during the year for the purposes for which loans were obtained other than temporary deployment pending application.

(xii) To the best of our knowledge and according to the information and explanation given to us and the other auditors, no fraud by the Holding Company, subsidiary company and associate companies incorporated in India and no material fraud on the Holding Company, subsidiary company and associate companies incorporated in India has been noticed or reported during the year.




Membership No. 031118Mumbai, 29th August, 2015






Equity and LiabilitiesShareholders’ Funds

Share Capital 5 3,153.23 2,869.22 Reserves and Surplus 6 7,152.80 2,532.46

10,306.03 5,401.68 Non Current Liabilities

Long Term Borrowings 7 26,977.56 32,525.49 Other Long Term Liabilities 8 7,840.85 4,555.24 Long Term Provisions 9 580.59 907.49

35,399.00 37,988.22 Current Liabilities

Short Term Borrowings 10 5,072.09 1,651.90 Trade Payables 11 6,870.20 7,713.23 Other Current Liabilities 12 9,520.60 6,199.26 Short Term Provisions 13 432.97 470.01

21,895.86 16,034.40 TOTAL 67,600.89 59,424.30

AssetsNon Current Assets

Fixed Assets 14 49,732.48 44,559.66 Non Current Investments 15 512.99 717.85 Deferred Tax Assets (net) 16 2,086.40 2,559.04 Long Term Loans and Advances 17 868.00 765.42 Other Non Current Assets 18 979.53 913.85

54,179.40 49,515.82 Current Assets

Inventories 19 2,709.56 3,295.94 Trade Receivables 20 1,060.26 997.03 Cash and Bank Balances 21 1,096.97 1,100.81 Short Term Loans and Advances 22 4,511.26 4,353.18 Other Current Assets 23 4,043.44 161.52

13,421.49 9,908.48 TOTAL 67,600.89 59,424.30

Notes to Financial Statements form an integral part of the Consolidated Balance Sheet.

Consolidated Balance Sheet as at 31st March, 2015




Mahadev Iyer Rakesh DarjiPlace : Mumbai Director Finance & CFO Company SecretaryDate : 29th August, 2015 Date : 26th August, 2015



99




IncomeRevenue from Operations 24 15,743.46 14,734.24 Less : Excise Duty 1,050.73 1,025.78 Revenue from Operations (Net) 14,692.73 13,708.46Other Income Profit on Sale of Business Undertaking 25 2,793.04 - Other Income 25(a) 786.80 2,648.53

3,579.84 2,648.53 18,272.57 16,356.99

ExpensesCost of Materials Consumed 26 8,348.33 7,737.68 Purchase of Traded Goods 27 297.80 668.05 Energy Cost 28 1,814.18 2,532.60 Decrease in Inventories of Finished Goods, Work in Progress and Stock in Trade

29 442.97 283.16

Employee Benefits Expenses 30 405.50 471.27 Other Expenses :

Manufacturing & Asset Maintenance 31 518.88 525.39 Administrative Expenses 32 257.15 396.00 Selling & Distribution Expenses 33 491.89 547.19

12,576.70 13,161.34 Profit before Finance Costs, Exchange Variation and Derivative Losses, Depreciation /Amortisation, Exceptional/Prior Period Items and Tax

5,695.87 3,195.65

Finance Costs 34 4,257.29 4,580.11 Exchange Variation and Derivative Losses (net) 35 365.68 510.87 Depreciation / Amortisation Expense 911.57 1,199.65 Profit / (Loss) before Exceptional/Prior Period Items and Tax

161.33 (3,094.98)

Reversal of Depreciation Provision - [Refer Note 2.1(a)] 586.68 - Prior Period Income 87.99 1,601.47 Profit / (Loss) before Tax 836.00 (1,493.51)

Tax Expense/ (Benefit)Current Tax - 34.57 Excess Provision of Earlier Years (Net) (16.87) (5.73)Deferred Tax Charge / (Credit) 377.78 (717.60)Profit / (Loss) after Tax for the year 475.09 (804.75)

Add: Share in Profit / (Loss) of Associates (Net) (8.56) (249.92)Profit/(Loss) for the current year 466.53 (1,054.67)Earning/(Loss) per Share (in Rupees)Basic [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]

1.62 (3.77)

Diluted [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]

1.62 (3.77)

Notes to Financial Statements form an integral part of the Consolidated Statement of Profit and Loss.

Consolidated Statement of Profit and Loss for the year ended 31st March, 2015







Consolidated Cash Flow Statement for the year ended 31st March, 2015 (` in Crore)

Particulars For the Year ended31st March, 2015

For the Year ended31st March, 2014

A. Cash Flow from Operating Activities

Net Profit/(Loss) before Taxation 836.00 (1,493.51)Adjustments for - Depreciation / Amortisation 911.57 1,199.65 Profit on Sale of Business Undertaking (2,793.04) - (Profit) / Loss on Sale/Write off of Fixed Assets (net) 1.93 0.73 Reversal of Depreciation Provision (586.68) - Prior Period Items Expense/(Income) (87.99) (1,601.47)(Profit)/Loss on Sale of Non Current investment (419.26) - Finance Costs 4,257.29 4,580.11 Exchange Variation & Derivatives (Net) 245.22 376.81 Interest on Deposit with Banks and Others (205.13) (191.27)Liabilities / Provision no longer required written back (net) (9.32) (1,674.82)Dividend Income - Trade Long Term Investment (0.34) (0.34)

1,314.25 2,689.40 Operating Profit before Movements in Operating Assets and Liabilities 2,150.25 1,195.89 Movements in Operating Assets and Liabilities:Increase/(Decrease) in Other Long Term Liabilities (2,531.14) 2,484.89 Increase in Trade Payables 141.67 462.47 Increase/ (Decrease) in Other Current Liabilities 3,318.15 (71.65)Decrease in Long Term Provisions (4.12) (11.86)Decrease in Short Term Provisions (1.81) (6.60)Decrease in Inventories 586.47 618.93 Increase in Trade Receivables (51.66) (292.85)(Increase)/ Decrease in Long Term Loans and Advances (12.99) 23.27 Increase in Short Term Loans and Advances (236.96) (776.58)(Increase)/ Decrease in Other Non Current Assets (42.34) 5.86 (Increase) / Decrease in Other Current Assets (3.00) 81.30 Foreign Currency Translation Reserves (4.30) (17.39)

1,157.97 2,499.79 Cash Generated from Operations 3,308.22 3,695.68 Direct taxes (Paid)/Refunded (net) 1.96 (6.53)Net Cash Generated from Operating Activities 3,310.18 3,689.15

B. Cash Flow from Investing Activities Purchase of Fixed Assets, including Intangible Assets, Capital Work in Progress, Capital Advances and Trial Run Profits/Loss

(1,819.09) (1,365.39)

Proceeds from Sale of Fixed Assets 113.21 7.21 Proceeds from Sale of Non Current Investments in Associates 286.00 - Proceeds from redemption of Non Current Investments 0.78 - Purchase of Non Current Investments (including Share Application Money) :

In Subsidiaries (31.64) - In Associates (43.88) - Others (0.30) (9.46)

Dividend Income from Long Term Investments 0.34 0.34 Interest Income 160.26 440.71 Inter Corporate Deposit (given)/Refund (Net) (53.85) 271.64 Deposit placed with Banks/Refund of Deposit (Net) 53.30 (193.37)Net Cash used in Investing Activities (1,334.87) (848.32)



101

Consolidated Cash Flow Statement for the year ended 31st March, 2015 (` in Crore)

Particulars For the Year ended31st March, 2015

For the Year ended31st March, 2014

C. Cash Flow from Financing Activities Proceeds from Issuance of Share Capital 1,283.71 124.09 Proceeds from Borrowings 18,829.98 20,400.42 Repayment of Borrowings (23,110.77) (19,175.40)Advance against Export Performance Bank Guarantee 5,995.80 1,148.83 Finance Cost Paid (4,743.66) (4,608.76)Exchange Variation & Derivatives (net) (198.95) (622.75)Repayment of Finance Lease liabilities (1.20) (0.77)Net Cash used in Financing Activities (1,945.09) (2,734.34)Net Increase/(Decrease) in Cash and Cash Equivalents 30.22 106.49

Cash and Cash Equivalents at the beginning of the year (see Note 3 below)

252.34 145.85

Cash and Cash Equivalents at the end of the year (see Note 3 below) 282.56 252.34 Net Increase/ (Decrease) in Cash and Cash Equivalents 30.22 106.49

Notes:1 The above Cash Flow Statement has been prepared under the ‘Indirect method’ as set out in the Accounting Standard – 3

on Cash Flow Statements, issued by the Institute of Chartered Accountants of India.2 Previous year’s figures have been regrouped where necessary to conform to this year’s classification.3 Cash and Cash Equivalents included in the Cash Flow Statement comprise the following Balance Sheet amounts :

(` in Crore) As at


31st March, 2014 Cash and Cash Equivalents (Refer Note 21(A)) 282.01 252.73 Less: Exchange variation (0.55) 0.39 Cash and Cash Equivalents at the end of the year 282.56 252.34







Notes to Consolidated Financial Statements for the year ended 31st March, 20151. Nature of Operations The Company owns and operates an integrated steel manufacturing facility comprising the unit for manufacturing

of flat rolled products at Hazira – District Surat, a Precoated facility at Pune, a Beneficiation Plant at Kirandul, Slurry Pipeline, Pelletisation Plant at Vizag and at Paradeep. The Company is also in the process of setting up a Beneficiation Plant at Dabuna (Odisha) and another Pelletisation Plant at Paradeep. The Company also operates Processing and Distribution centers, Hypermarts and Express Marts at various locations across India. New Trinity Holding LLC (a downstream subsidiary of the Company) and its subsidiaries are engaged in the extraction and preparation of thermal and metallurgical coal from properties which are either owned or leased in southern West Virginia and eastern Kentucky in the United States of America. Essar Steel Middle East FZE (A subsidiary of the Company) is engaged in activity of trading and processing of steel and construction material in Dubai, UAE.

2. Basis of Preparation The Financial Statements have been prepared to comply in all material aspects with the Accounting Standards notified

under Section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, other generally accepted accounting practices prevalent in India and the relevant provisions of the Companies Act, 2013 and rules framed thereunder. The Financial Statements have been prepared under the historical cost convention, except as stated elsewhere and on accrual basis. The accounting policies have been consistently applied by the Company and, unless specified otherwise, are consistent with those used in the previous year.

The consolidated Financial Statements present the consolidated accounts of Essar Steel India Limited and its subsidiaries (collectively referred to as the “Group”). The consolidated financial statements have been prepared on the following basis:

- The Financial statements of the subsidiaries have been consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income & expenses after fully eliminating intra-group balances, intra-group transactions and resultant unrealised profits/losses in accordance with Accounting Standards 21 issued by the Institute of Chartered Accountants of India.

- Investments of the group in Associates are accounted as per the Equity Method under Accounting Standard 23 issued by the Institute of Chartered Accountants of India.

- The consolidated financial statements have been prepared using uniform accounting policies for like transactions and are presented, to the extent possible, in the same manner as the Company’s standalone financial statements except in case of the one of the Associates, Bhander Power Limited, wherein depreciation on Plant and Machinary is provided by applying written down value method (based on useful life assessed by an independent engineer) and incase of another associate, Essar Bulk Terminal Limited, wherein depreciation on assets other than plant and machinary is provided by applying written down value method (based on useful life as per Schedule II to the companies Act 2013) which, in both cases, is in variation to the method adopted by the Company as mentioned in Note 2.1 (f) below.

- The foreign operations of the company are classified between integral and non-integral based on the way in which they are financed and operated in relation to Company.

Consequently, translation of the financial statement of such non integral foreign operation is effected as under :- (a) Income and expenses are translated at the average exchange rate prevailing during the year. (b) All assets and liabilities, both monetary and non-monetary, are translated at the exchange rate prevalent at

the date of Balance sheet. (c) The resulting net exchange differences are recognized as foreign currency translation reserve as part of

Reserve and Surplus.In case of subsidiaries, which are integral in nature of the company’s operation, the translation of financials statement is effected as under :

(a) Income and expenses are translated at the average exchange rates prevailing during the year. (b) Monetary items at the end are restated at the year-end rates. Non- monetary foreign currency items are

carried at cost. (c) The resulting net exchange differences are recognized in the statement of profit and loss.

2.1 Statement of Significant Accounting Policies (a) Change in Accounting Policy The Company has changed its method of providing depreciation on fixed assets from the written down value

method to the straight line method (except for plant and machinery and railway sidings which were already being



103

Notes to Consolidated Financial Statements for the year ended 31st March, 2015depreciated on straight line method), from the date of assets coming into use up to 31st March, 2014, at the rates prescribed in Schedule XIV to the Companies Act, 1956, and for the period from 1st April, 2014 onwards, on the basis of useful life of assets as prescribed under schedule II to the Companies Act, 2013. The management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets. Had the Company continued to use the earlier method of depreciation, the consolidated profit before tax for current year would have been lower by ` 636.32 Crore (including ` 586.68 Crore for the period up to 31st March, 2014).

(b) Use of Estimates The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles in India

requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year. The Management believes that these estimates are prudent and reasonable and are based upon the Management’s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

(c) Tangible and Intangible Assets Tangible and intangible assets are stated at cost or at revalued amounts, less accumulated depreciation,

amortisation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready for their intended use. Fair market value is determined by an Independent Chartered Engineer & Valuer.

In respect of accounting periods commencing on or after 7th December, 2006, exchange differences arising on reporting of the long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in the previous Financial Statements are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, if these monetary items pertain to the acquisition of a depreciable fixed asset.

(d) Capital Work-In-Progress All expenditure, including interest cost during the project construction period, are accumulated and presented as

Capital Work-In-Progress until the assets are ready for intended use. Assets under construction are not depreciated. Income earned from investments of surplus borrowed funds during the construction/trial run period is reduced from Capital Work-In-Progress. Expenditure/Income arising during trial run is added to/reduced from Capital Work-In-Progress. Interest cost is not added to capital work in progress in case of project which are completed individually but not as part of an intended integrated facility.

(e) Expenditure on Substantial Expansion All direct capital expenditure on expansion are capitalised. As regards indirect expenditures on expansion, only

that portion of expenditure is capitalised that is attributable to the expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.

(f) Depreciation and Amortisation (i) Tangible Assets Tangible assets are depreciated as per the useful life specified in Schedule II to the Companies Act, 2013

except Plant & Machinery which is as per useful life assessed by an independent Chartered Engineer & Valuer on straight-line method. Depreciation on additions to / deletions from fixed assets is provided on pro-rata basis from the date of such addition and up to the date of deletion as the case may be. Depreciation on additions to assets due to exchange variation is provided over the remaining useful life of the assets. Depreciation is provided on individual project only after commencement of commercial production from intended integrated facility, to which such project belongs. Depreciation in respect subsidiary companies are provided on the basis of estimated useful life on straight line method. Depreciation of Leased Mining Property/ Rights is computed using tons of production method over the estimated proven and probable reserve tons. Amortization of Mine development Cost is computed using the units of production method over the estimated proven and probable reserve tons.

The difference in useful lives of Plant and Machinery as per Companies Act, 2013 and as assessed by Independent Chartered Engineer & Valuer (who has assessed useful life after taking into account review of physical status of asset, usage of asset in terms of capacity or physical output, physical wear and tear which depends on operational factors such as the number of shifts for which the asset is to be used and the repair



Notes to Consolidated Financial Statements for the year ended 31st March, 2015and maintenance program and the care and maintenance of the asset, while idle, technical or commercial or commercial obsolescence arising from changes or improvement in production, or from a change in the market demand for the product or service output of the asset), in the case of the Company is highlighted below:

Plant & Machinery Useful life as per Companies

Act, 2013 (Years)

Average useful life as per Technical Evaluation

(Years)

Sinter Plant,Rolling Mill and Blast Furnace 20 30

Power Generation Plant 40 30

Others 25 30

(ii) Intangible Assets Costs relating to softwares, which are acquired, are capitalised and amortised on straight-line method over

estimated useful life of 5 to 6 years.

(g) Impairment of Assets (i) The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of

impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(ii) If impairment loss is provided, depreciation is calculated on the revised carrying amount of the assets over its remaining useful life.

(h) Revenue Recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the

revenue can be reliably measured.

Sale of Goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Sales is disclosed net of quality claims and rebates. Excise Duty deducted from the gross turnover is the amount of excise duty that is included in the amount of turnover (gross) and not the entire amount of liability arising during the year.

Export Benefits Export benefits are accounted for in the year of exports based on eligibility and where there is certainty of realising

the same.

Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate

applicable.

Dividends Revenue is recognised when the shareholders’ right to receive payment is established by the balance sheet

date.

(i) Taxes on Income Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected

to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets and Deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relates to the taxes on income levied by same governing taxation laws. Deferred tax assets other than those arising from carry forward losses and unabsorbed depreciations, are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred Tax Assets arising from unabsorbed depreciation and/or carried forward tax losses, are recognised only if



105

Notes to Consolidated Financial Statements for the year ended 31st March, 2015there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises, unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realised.

(j) Inventories

Raw Materials, Production Consumables, Stores & Spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold above cost. Cost is determined on a Weighted Average basis. Work-in-progress and finished goods is valued at lower of cost and net realisable value. Cost includes direct material, labour and a proportion of manufacturing and administrative overheads based on normal capacity. Value of finished goods also includes excise duty. Net realisable value is the estimated selling price in the ordinary course of business less estimated cost of completion and cost to make the sale.

(k) Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non current investments are carried at cost. However, provision for diminution in value, if any, is made to recognise a decline other than temporary in the value of such investments.

(l) Foreign Currency Transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Measurement of foreign currency monetary items at Balance Sheet Date

Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Treatment of Exchange Differences

Exchange differences, in respect of accounting periods commencing on or after 7th December, 2006, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous Financial Statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” in the Financial Statements and are amortised over the balance period of such long-term asset/liability.

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous Financial Statements, are recognised as income or as expenses in the statement of profit and loss in the year in which they arise.

(iv) Forward Exchange Contracts not intended for Trading or Speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.



Notes to Consolidated Financial Statements for the year ended 31st March, 2015 (m) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(n) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when there is a present obligation in respect of which a reliable estimate can be made as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Contingent liabilities are not recognised but disclosed in the notes to the Financial Statements. Contingent assets are neither recognised nor disclosed.

(o) Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprise cash in hand and at bank in current accounts. Margin deposits and term deposits, which are not pledged, with an original maturity of three months or less are considered as cash equivalent.

(p) Derivative Instruments

The Company uses principal only swap (POS) contracts to hedge risks associated with foreign currency fluctuations relating to highly probable forecasted transactions. The Company designates certain POS contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in Accounting Standard 30 – Financial Instruments: Recognition and Measurement. These POS contracts are stated at fair value at each reporting date. Changes in the fair value of these POS contracts that are designated and effective as hedges of future cash flows are recognised directly in Hedging Reserve Account under Reserves and Surplus (net of applicable deferred income taxes) and the ineffective portion is recognised immediately in the Statement of Profit and Loss. Amounts accumulated in Hedging Reserve Account are reclassified to Statement of Profit and Loss in the same periods during which the forecasted transaction affects Statement of Profit and Loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognised in Hedging Reserve Account is retained there until the forecasted transactions occur. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in Hedging Reserve Account is immediately transferred to the Statement of Profit and Loss. Mark to market losses on all other derivative contracts, other than forward contracts accounted under Accounting Standard 11‘‘Effects of changes in foreign exchange rates’’ as per (l) (iv) above, outstanding at the balance sheet date are recognised in the Statement of Profit and Loss based on the principle of prudence as provided in AS1-‘‘Disclosure of accounting policies’’.

(q) Employee Benefits

(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

(ii) Gratuity liability are defined benefit obligations and are provided for on the basis of an independent actuarial valuation on projected unit credit method made at the end of each financial year.

(iii) Provision for compensated absences and their classifications between current and non current liabilities are based on independent actuarial valuation. The actuarial valuation is done as per projected unit credit method.

(iv) Actuarial gains/losses are immediately taken to Statement of Profit and Loss.



107

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 (r) Central Value Added Tax (CENVAT) CENVAT claimed on capital goods is reduced from the cost of plant and machinery/capital work-in-progress.

CENVAT claimed on purchases of raw material and other materials is reduced from the cost of such materials.

(s) Borrowing Costs Borrowing cost in ordinary course of business is recognised as an expense in the period in which these are

incurred. Borrowing costs that are attributable to the acquisition/ construction of qualifying assets are capitalised as part of cost of such asset up to the date the assets are ready for their intended use. However borrowing cost is not capitalised for projects which are completed individually but not as part of an intended integrated facility.

(t) Leases (i) Where the Company is the Lessee Lease rentals in respect of finance lease arrangements entered up to 31st March, 2001 are segregated into

cost of the asset and interest components by applying an implicit internal rate of return. The cost component is amortised over the useful life of the asset and the interest component is recognised in the Statement of Profit and Loss. Lease payments in excess of the charge for the year are treated as prepaid lease rentals wherever agreement is existing and in other cases it has been added to the carrying cost of the fixed assets.

Finance leases entered on or after 1st April, 2001, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

(ii) Where the Company is the Lessor Assets subject to operating lease are included in fixed assets. Lease income is recognised in the Statement

of Profit and Loss on a straight line basis over the lease term. Costs including depreciation are recognised as an expense in the Statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Statement of Profit and Loss.

(u) Mining, Exploration and Development Expenditure Expenditure in respect of mineral, exploration and evaluation is charged to the Statement of profit and loss as

incurred except in following cases where it is capitalised: • it is expected that the expenditure will be recouped by future exploitation or sale; or • substantial exploration and evaluation activities have identified a mineral resource but these activities have

not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves.

(v) Employee Stock Compensation Cost Measurement and disclosure of the employee share-based payment plans is done in accordance with the Guidance Note on Accounting for Employee Share-based Payments, issued by ICAI.The Company measures compensation cost relating to employee stock appreciation rights as Cash Settled Scheme using the fair value method. Compensation expense is amortised over the vesting period of the option on a straight line basis. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured if there are material changes in assumption, with any changes in fair value recognised in Statement of Profit and Loss for the year.

(w) Measurement of EBIDTA The company has elected to present earnings before finance costs, exchange variation and derivative losses,

depreciation and amortisation expenses and taxes (EBIDTA) as a separate line item on the face of the Statement of Profit and Loss. The company measures EBIDTA on the basis of Profit /(Loss) from the continuous operations and does not include finance costs, exchange variation and derivative losses, depreciation and amortisation expenses, exceptional and extra ordinary items and taxes.



Notes to Consolidated Financial Statements for the year ended 31st March, 2015 (x) Assets Retirement Obligation

Assets Retirement Obligation primarily consists of estimates of future costs necessary to reclaim surface land in accordance with federal and state reclamation regulations. Such requirement are described in mining permits obtained from the regulatory agencies prior to initiating mining or mining related activity. Management utilizes in house engineers and third party engineering consultants to develop detailed engineering calculations of the amount and expected timing of the future cash requirements required to complete reclamation of its mining areas. Such cost estimates include provisions for structure removal, pond removal, earthwork, hydrology, water monitoring and other related costs. Spending estimate which include the assumption that an independent third party will perform the work required are escalated to consider the impact of inflation in future periods.

Upon initial recognition the company records an assets equal to estimated liability. The assets is included in Fixed Assets and depreciated using the units of production methods over its estimated life. Reclamation performed as part of the ongoing mining process is expensed in the period incurred.

3. List of Direct and Indirect Subsidiaries considered for consolidation is as under :

Sr. No.

Name of the Company Country of Incorporation

Proportion of Ownership Interest (%)

As at 31st March 2015


A. Direct Subsidiaries1 Essar Steel Middle East FZE Dubai 100 1002 Essar Steel Trading FZE, Dubai Dubai 100 1003 Essar Steel Offshore Limited Mauritius 100 1004 Paradeep Steel Company Limited India 100 100B. Step Down Subsidiaries5 Essar Minerals Limited Mauritius 100 1006 Essar Mineral Cooperatief U.A. Netherlands 100 1007 Essar Minerals Canada Limited Canada 100 1008 New Trinity Holdings LLC USA 100 1009 New Trinity Coal Inc. USA 100 10010 New Resources Inc. USA 100 10011 Essar Minerals INC USA 100 10012 Trinity Parent Corporation USA 100 10013 Trinity Coal Corporation USA 100 10014 Trinity Coal Partners LLC USA 100 10015 Bear Fork Resources LLC USA 100 10016 Deep Water Resources LLC USA 100 10017 Levisa Fork Resources LLC USA 100 10018 North Springs Resources LLC USA 100 10019 Little Elk Mining Company LLC USA 100 10020 Banner Coal Terminal LLC USA 100 10021 Hughes Creek Terminal LLC USA 100 10022 Trinity Coal Marketing LLC USA 100 10023 Frasure Creek Mining LLC USA 100 10024 Falcon Resources LLC USA 100 10025 Prater Branch Resources LLC USA 100 10026 Trinity RMG Holdings LLC USA 100 10027 RMG INC USA 100 10028 Hazira Coke Limited India 100 100

Note- One of the Subsidiary Odisha Slurry Pipe Line Limited (OSPIL) has been excluded from consolidation due to the reason that control as defined under Accounting Standard 21 [issued by the Institute of Chartered Accountants of India.] is intended to be temporary as on 31st March, 2015.



109

Notes to Consolidated Financial Statements for the year ended 31st March, 20154. List of Associates considered for consolidation is as under :

Sr. No.

Name of the Company Proportion of Ownership in Equity share capital(%)



1 Essar Power Limited (EPOL) - 26.00

2 Bhander Power Limited (BPOL) 26.00 26.00

3 Essar Bulk Terminal Limited (EBTL)* 26.00 26.00

4 Essar Power Hazira Limited (EPHL)# 26.00 26.00

5 Essar Power Orissa Limited (EPOOL)@ 26.00 26.00

6 Essar Steel Chhattisgarh Limited 47.38 47.38

7 Essar Power MP Limited$ 26.00 NA

8 Essar Steel Processing FZCO (ESP FZCO) 40.00 40.00

* The effective holding of the Group in this entity for net equity accounting is 0.50% which is calculated after considering Cumulative Convertible Participating Preference shares (CCPPS) issued by this entity and held outside the group.

# The effective holding of the Group in this entity for net equity accounting is 0.51% which is calculated after considering Cumulative Convertible Participating Preference shares (CCPPS) issued by this entity and held outside the group.

@ The effective holding of the Group in this entity for net equity accounting is 0.72% which is calculated after considering Cumulative Convertible Participating Preference shares (CCPPS) issued by this entity and held outside the group.

$ The effective holding of the Group in this entity for net equity accounting is 4.20% which is calculated after considering Cumulative Convertible Participating Preference shares (CCPPS) issued by this entity and held outside the group.

5 Share Capital (` in Crore)



Authorised7,175,000,000 (Previous Year 7,175,000,000) Equity Shares of ` 10 each 7,175.00 7,175.00 100,000,000 (Previous Year 100,000,000) 10% Cumulative Redeemable Preference Shares of ` 10 each

100.00 100.00

7,275.00 7,275.00 Issued, subscribed and fully paid-up3,108,957,660 (Previous Year 2,824,951,352) Equity Shares of ` 10 each 3,108.96 2,824.95 Add: 4,520,703 (Previous Year 4,520,703) Equity Shares Forfeited 0.67 0.67

3,109.63 2,825.62 43,598,951 (Previous Year 43,598,951) 10% Cumulative Redeemable Preference Shares of ` 10 each

43.60 43.60

3,153.23 2,869.22



Notes to Consolidated Financial Statements for the year ended 31st March, 2015 a Reconciliation of number of shares and amount outstanding at the beginning and at the end of the

reporting period:

31st March, 2015 31st March, 2014 Number ` in Crore Number ` in Crore

Equity SharesAt the beginning of the year 2,824,951,352 2,824.95 2,797,534,656 2,797.53Issued during the year 284,006,308 284.01 27,416,696 27.42Outstanding at the end of the year 3,108,957,660 3,108.96 2,824,951,352 2,824.95Preference SharesAt the beginning of the year 43,598,951 43.60 43,598,951 43.60Outstanding at the end of the year 43,598,951 43.60 43,598,951 43.60

b Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of Equity Shares having face value of ` 10 per share. Every shareholder is entitled to one vote for every one share held. In the event of liquidation, the equity share holders shall be entitled to receive remaining assets of the Company after distribution of all dues in proportion to their shareholdings.

Cumulative Redeemable Preference Shares (CRPS)The Company has issued 4,35,98,951 10% CRPS of ` 10 each. Each CRPS is redeemable at par in 12 equal monthly installments commencing from 1st October, 2017 to 1st September, 2018. The Company shall have option to redeem the CRPS at par in one or more tranches from any or all of the existing holders, anytime after the date of allotment together with arrears of dividend if any and the Board shall give one month’s notice for any such redemption to the registered holders of the CRPS.

Arrears of fixed dividend on Cumulative Redeemable Preference Shares as at 31st March 2015 is ` 20.40 Crore (Previous Year 15.30 Crore).

c Shares held by Holding Company Out of above equity shares, 2,153,587,448 equity shares (Previous year 2,108,864,699) are held by Essar Steel

Asia Holdings Limited, Mauritius the holding Company.

d Details of shareholders holding more than 5% shares in the Company

As at 31st March, 2015 As at 31st March, 2014 Number % of Holding Number % of Holding

Equity SharesEssar Steel Asia Holdings Limited1 2,153,587,448 69.27 2,108,864,699 74.65Imperial Consultants & Securities Private Limited

629,656,758 20.25 434,452,284 15.38

Shares under Trust (Venkatraman Govind Raghavan) 191,517,500 6.16 191,517,500 6.78

2,974,761,706 95.68 2,734,834,483 96.81

1. Number of shares includes 492,485,501 shares acquired from Essar Steel Limited, Mauritius for which transfer of shares in demat account is pending and in respect of such shares Essar Steel Asia Holdings Limited (ESAHL) has made necessary declaration under Section 187C of erstwhile Companies Act, 1956 (Now Section 89 of Companies Act, 2013) regarding beneficial ownership of such shares.

Preference Shares As at 31st March, 2015 As at 31st March, 2014

Number % of Holding Number % of Holding IFCI Limited 22,116,599 50.73 22,116,599 50.73Imperial Consultants & Securities Pvt Limited 16,940,180 38.85 16,940,180 38.85

39,056,779 89.58 39,056,779 89.58



111

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 e Aggregate number of Bonus Shares issued, shares issued for consideration other than cash and shares

bought back during the period of five years :



Number Number

Equity shares allotted as fully paid up pursuant to scheme of Amalgamation 1,073,249,784 1,073,249,784

6 Reserves and Surplus (` in Crore) As at 31st March, 2015 As at 31st March, 2014

Capital Reserve 12.73 12.73 Capital Redemption Reserve 202.92 202.92 Securities Premium Account Balance as per last Balance Sheet 6,814.91 6,718.24 Add: Premium on shares issued during the

year 999.70 96.67 Closing Balance 7,814.61 6,814.91 Revaluation Reserve Opening Balance 3,080.06 - Addition during the year 3,519.29 3,080.06 Less: Additional depreciation transferred to

retained earnings 161.54 - Closing Balance 6,437.81 3,080.06 Share in Reserve of Associates

Securities Premium 1.10 404.07 Capital Reserve on Consolidation - 16.28

Hedging Reserve (Net of deferred tax) Balance as per last Balance Sheet (590.86) (418.39) Add : Effect of foreign exchange rate

variations on Hedging Instruments outstanding at the end of the year

(11.06) (206.63)

Less : Transferred to Statement of Profit and Loss 240.90 34.16

Closing Balance (361.02) (590.86)General Reserve 77.51 77.51 Foreign Currency Translation Reserve (713.05) (589.53)Foreign Currency Monetary Item Translation Difference Account Balance as per last Balance Sheet (57.21) (3.16) Add:Effect of foreign exchange rate

variations during the year (29.41) (65.95)

Less:Transferred to Statement of Profit and Loss during the year 11.77 11.90

Closing Balance (74.85) (57.21)Surplus/ (Deficit) in statement of Profit and Loss Balance as per last Balance Sheet (6,838.43) (5,783.76) Add : Net Profit/ (Loss) for the Year 466.53 (1,054.67) Add : Written down value of Fixed Assets

(Net of deferred tax)* (34.60) -

Add: Transfer from Revaluation Reserve 161.54 - Closing Balance (6,244.96) (6,838.43)

7,152.80 2,532.46

* Assets whose useful life has expired as on 1st April, 2014 has been transferred to opening retained earnings as per Companies Act 2013.



Notes to Consolidated Financial Statements for the year ended 31st March, 20157 Long Term Borrowings (Refer note 51) (` in Crore)

As at 31st March, 2015 As at 31st March, 2014

Secured

3,120 (Previous Year 3,200) Non Convertible Debentures of ` 1,000,000 each

312.00 320.00

Term Loans*

From Banks 22,168.82 27,567.13

From Others 1,470.96 1,623.39

Buyers Credit for Capital Expenditure 51.12 474.74

24,002.90 29,985.26

Unsecured

Dollar / Rupee Notes

From Banks 208.65 245.91

From Others 1.28 2.13

Sales Tax Deferral Loan 33.32 33.88

Long term maturities of Finance Lease obligations

- 0.63

Inter Corporate Deposits

From Related Parties 2,421.41 2,095.40

From Others 310.00 162.28

2,974.66 2,540.23

26,977.56 32,525.49

* Including ` 1417.72 Crore from out of current maturities considered as non current, on the basis, that the company proposes to repay aforesaid amount by utilising expected long term export advances under EPBG (Export Performance Bank Guarantees) as per limits sanctioned by RBI and Banks. The Company has sought clarification from Reserve Bank of India (RBI) on the applicability of its circular dated 6th April, 2015, which restricts banks from issuing EPBG, as it had obtained specific approval dated 23rd May, 2013 from RBI up to USD 2 Billion under EPBG scheme to repay Rupee loans. Simultaneously, the Company is in discussion with its banks to structure its project loans under the “5/25 scheme ” of RBI extended to existing project loans of core industries vide its circular dated 15th December, 2014 which would extend the loan repayment period upto 20 years and thus substantially reduce the repayment obligation in year 2015-16 from the present level.

8 Other Long Term Liabilities (` in Crore)

As at 31st March, 2015 As at 31st March, 2014 Acceptances for Capital Goods - 80.35 Advance against Sale of Business Undertaking 750.00 750.00 Advances from Customers Secured against Export Performance Bank

Guarantee* 7,063.93 1,105.75 Others - 2,478.02

7,063.93 3,583.77Security Deposit Received - 53.12 Interest Accrued 26.92 88.00

7,840.85 4,555.24



113

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 * Advance against Export Performance Bank Guarantee (including Advance against Export Performance Bank

Guarantee in Other Current Liabilities) are secured by Bank Guarantee issued from Banks/Financial Institutions which has a charge on the Company’s assets.

9 Long Term Provisions (` in Crore)


Provision for employee benefits

Gratuity (Refer note 41) 24.40 15.81

Compensated absences 20.65 33.36

Provision on Derivative Contracts 219.86 555.20

Provision for Assets Retirement Obligation 315.68 303.12

580.59 907.49

10 Short-Term Borrowings (` in Crore)


Secured (Refer note 51) Short Term Loans from Banks 100.00 -

Short Term Loans From Others 100.00 -

Working Capital Loans - From Banks 2,026.02 432.81

Buyers’ Credit for Operational Expenditure 1,084.16 683.40

Buyers Credit for Capital Expenditure - 28.37

3,310.18 1,144.58

UnsecuredInter corporate Deposits from related parties 1,664.15 507.32

from Others 97.76 -

5,072.09 1,651.90

11 Trade Payables (` in Crore)


Trade Payables for Goods and Expenses 3,700.25 3,683.72

Acceptance for Goods and Expenses 3,169.95 4,029.51

6,870.20 7,713.23



Notes to Consolidated Financial Statements for the year ended 31st March, 201512 Other Current Liabilities (` in Crore)

As at 31st March, 2015 As at 31st March, 2014 Current maturities of Long-Term debt (Refer Note 51)

2,237.46 2,161.32

Current Maturity of Purchase Price Note 640.93 1,220.03

Current maturities of Finance Lease Obligations 0.63 1.20

Creditors for Capital Expenditures 263.24 333.55

Acceptance for Capital Expenditures 36.14 250.63

Interest accrued and due on borrowings 1,375.11 775.82

Interest accrued but not due on borrowings 290.93 490.04

Interest accrued on Other Liabilities 92.75 17.06

Advances from Customers 4,008.83 531.62

Advance against Export Performance Bank Guarantee (Refer note 8)

259.14 43.08

Security Deposits Received 5.42 25.00

Statutory Liabilities 151.87 184.97

Credit Balance of Current Account 26.26 121.19

Other Liabilities 131.89 43.75

9,520.60 6,199.26

13 Short Term Provisions (` in Crore) As at 31st March, 2015 As at 31st March, 2014

Provision for Compensated absences 5.28 7.09

Provision for Indirect Taxes (Refer Note 48) 19.73 19.73

Provision for Taxation - 13.69

Provision on Derivatives contracts 350.55 374.38

Provision for Assets Retirement Obligation 57.41 55.12

432.97 470.01

14 Fixed Assets (` in Crore)

As at 31st March, 2015 As at 31st March, 2014 Tangible Assets (net of depreciation) 45,125.83 17,240.98

Intangible Assets (net of amortisation) 24.31 23.91

Capital Work-in-Progress (Refer Note 45) 4,582.34 27,294.77

49,732.48 44,559.66



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5



Notes to Consolidated Financial Statements for the year ended 31st March, 201515 Non-Current Investments (valued at cost unless stated otherwise)

(` in Crore) As at 31st March, 2015 As at 31st March, 2014

(a) Trade investments - Unquoted (a.1) Equity Instruments

Investment in Subsidiary1

2,595,000 (Previous Year Nil) fully paid Equity Shares of `10 (Previous Year Nil) of Odisha Slurry Pipe Line Infrastructure Limited 25.50 -

Investment in AssociatesNil (Previous Year 219,000,000) fully paid Equity Shares of ` 4 each of Essar Power Limited - 164.56

Add: Share of Accumulated Reserves of Associates - 615.03

Add: Share on Share premium of Associates - 27.31

Add: Share on Capital Reserve of Associates - 5.15

Add: Share of Profits/(Loss) from Associates for the current year - (291.49)

Less: Diminution in the value of Investment - (234.56)

- 286.00

96,905,000 (Previous Year 96,905,000) fully paid Equity Shares of ` 10 each of Bhander Power Limited2 104.77 104.77

Add: Share of Accumulated Reserves of Associates 148.48 109.62

Add: Share of Profits/(Loss) from Associates for the current year 0.37 37.76

Add: Share on Share premium of Associates - 1.10

253.62 253.25

5,781,944 (Previous Year 5,781,944 ) fully paid Equity Share of ` 10 each of Essar Steel Chattisgarh Limited 5.78 5.78

Add: Share of Accumulated Reserves of Associates (0.08) -

Add: Share of Profits/(Loss) from Associates for the current year 0.19 (0.08)

5.89 5.70

68,900,000 (Previous Year 208,000) fully paid Equity Shares of ` 10 each of Essar Power MP Limited 68.90 5.20

Add: Share of Profits/(Loss) from Associates for the current year (6.72) -

62.18 5.20

2 (Previous Year 2) fully paid Equity Shares of AED 0.2 million (Previous Year AED 0.2 million) of Essar Steel Processing FZCO Dubai 0.25 0.25

Add: Share of Accumulated Reserves of Associates (0.25) (0.25)

- -



117

Notes to Consolidated Financial Statements for the year ended 31st March, 2015(` in Crore)


1,300,000 (Previous Year 1,300,000) fully Paid Equity Shares of ` 10 each of Essar Bulk Terminal Limited 1.30 1.30

Add: Share of Accumulated Reserves of Associates 7.72 4.45

Add: Share of Profits/(Loss) from Associates for the current year (2.37) 3.27

6.65 9.02

2,600,000 (Previous year 2,600,000) fully paid Equity shares of ` 10 each of Essar Power Hazira Limited 2.60 2.60


Add: Share of Profits/(Loss) from Associates for the current year - -

2.59 2.59

2,600,000 (Previous year 1,631,843) fully paid Equity shares of ` 10 each of Essar Power Orissa Limited 2.60 1.63


Add: Share of Profits/(Loss) from Associates for the current year (0.02) 0.61

2.54 1.59

Total Investment in Associates 333.47 563.35

Others2,000 (Previous Year 2,000) fully paid Equity Shares of ` 10 each of Essar Bulk Terminal Paradip Limited (*** ` 20,000)2 *** ***

250,000 (Previous Year 250,000) fully paid Equity Shares of ` 10 each of Frontline Roll Forms Private Limited 0.25 0.25

95,000 (Previous Year 95,000) fully paid Equity Shares of ` 10 each of Essar Steel Jharkhand Limited 0.10 0.10

20 (Previous Year 20) fully paid Equity Shares of ` 10 each of Essar Commvision Limited (# ` 200 ) # #

0.35 0.35

(a.2) Convertible Debentures (Others)1,065,585 (Previous Year 1,065,585) fully paid Compulsory Convertible Cumulative Debenture of ` 1000 each of Asia Motor Works Limited 106.56 106.56

(b) Trade investment - Quoted (b.1) Equity Instruments (Others)

25,47,223 (Previous Year 25,47,223) fully paid Equity Shares of ` 10 each of Essar Ports Limited2 23.14 23.14

12,73,611 (Previous Year 12,73,611) fully paid Equity Shares of ` 10 each of Essar Shipping Limited2 11.57 11.57

34.71 34.71





(c) Other than Trade investment - Unquoted

(c.1) Non Convertible Debentures (Others)

1,226,300 (Previous Year 1,226,300) fully paid 12.5 % Secured Redeemable Non Convertible Debentures of ` 98.70 each (Previous Year ` 105 each) of Essar Oil Limited 12.10 12.88

(d) Other than Trade investment - Quoted

(d.1) Investments in Mutual Fund

190,931 (Previous Year Nil) fully paid Units of Unit Linked Insurance Policy Scheme of Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited 0.30 -

512.99 717.85

Aggregate amount of Quoted Investments [(Aggregate Market Value ` 36.63 Crore (Previous Year `17.17 Crore)] 35.01 34.71

Aggregate amount of Unquoted Investments 477.98 683.14

512.99 717.85

1 Investment in Odisha Slurry Pipe Line Limited (OSPIL), one of the subsidiaries, is not eliminated in consolidation process due to the reason that control as defined under Accounting Standard 21 [issued by Institute of Chartered Accountants of India] is intended to be temporary as on 31st March, 2015.

2 Investment in 96,905,000 shares of Bhander Power Limited, 2,000 shares of Essar Bulk Terminal Paradip Limited, 2,547,223 shares of Essar Ports Limited and 1,273,611 shares of Essar Shipping Limited have been pledged with Banks as security against loans taken.

16 Deferred Tax Assets (Net) (` in Crore)

As at 31st March, 2015 As at 31st March, 2014 Deferred Tax Assets on Unabsorbed depreciation and carry forward losses 7,212.29 6,320.61 Less : Deferred Tax Liabilities on Fixed Assets (excess of net book value over written down value as per the provisions of the Income Tax Act, 1961) 5,333.22 4,122.73

1,879.07 2,197.88 Other Deferred Tax Assets:

Mark to Market Valuation of hedging instruments 191.06 304.24 Provision for doubtful debts 2.48 3.45 Provision for doubtful advances 2.18 2.11 Amalgamation Expenses - 0.68 Deferred power charges 8.26 12.18 Other timing differences (disallowances under section 43B of the Income Tax Act, 1961) 3.35 38.50

207.33 361.16 2,086.40 2,559.04



119

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 The Company has recognized deferred tax assets of ` 1879.07 Crore on unabsorbed depreciation and carry forward

losses as on 31st March 2015 in view of the following:

a) Operations have commenced from integrated facilities at Hazira and Odisha after commissioning of Slurry Pipe Line from Dabuna to Paradeep and Pellet Plant 1 (6 MTPA) at Paradeep.

b) The Company has confirmed orders/MOUs amounting to ` 29,364 Crore in hand, which are to be executed over a period of one to ten years. The Company has received advances amounting to ` 9,621 Crore against the aforesaid confirmed orders/MOUs. The Company has ascertained profit before tax amounting to ` 1,974 Crore which will arise from the execution of these orders/MOUs and the same will absorb deferred tax assets amounting to ` 683 Crore.

c) Based on significantly improved operating margins, Company’s monetisation plan of identified assets (in addition to the sale of Odisha Slurry Pipeline, already completed in current year), substantial orders in hand, sanction of enhanced working capital limits by the banks, dollarisation of substantial rupee term liabilities and consequent reduction in interest outgo and further disbursement of term loans by banks pursuant to information memorandum prepared by an eminent merchant banker for submission to a consortium of 25 banks after appraising the earning potential of the company in next 10 years for debt syndication, the Company is virtually certain that sufficient future taxable income will be available against which deferred tax assets of ` 1,879.07 Crore recognized as on 31st March, 2015 on unabsorbed depreciation and carried forward business losses can be realized.

17 Long Term Loans and Advances (Unsecured and considered good unless otherwise stated) (` in Crore)


Capital Advances 461.96 465.44

Prepaid Expenses 294.93 299.98

Inter Corporate Deposits to Related Parties 111.11 -

868.00 765.42

18 Other Non Current Assets (` in Crore)


Interest Accrued on Investments 34.63 -

Shares under irrevocable trust* 766.07 766.07

Long Term Security Deposit 167.68 125.34

Long Term Deposits with Banks - remaining maturity > 12 months (Refer note 21)

4.92 12.89

Advance towards Equity to Related Parties 6.23 9.55

979.53 913.85

* Represents 191,517,500 equity shares allotted to a Trust created by the Company, against the Company’s investment in the erstwhile companies namely Essar Steel (Hazira) Limited and Essar Steel Orissa Limited, in pursuant to the scheme of amalgamation. The Company is the sole beneficiary of this trust. All of the 191,517,500 equity shares (Previous Year 191,517,500 equity shares) have been pledged against facility availed by Imperial Consultants & Securities Private Limited.



Notes to Consolidated Financial Statements for the year ended 31st March, 201519 Inventories (` in Crore)


Raw Materials and Components 225.55 261.02

Goods-in Transit 350.70 491.49

Stores and Spares 391.06 408.63


Production Consumables 129.81 109.91


Fuel 8.31 20.38

Work-in-Progress 1,275.55 1,264.71

Finished Goods 285.05 696.04

Traded Goods - 9.52

2,709.56 3,295.94

20 Trade Receivables (` in Crore)


Debts outstanding for a period exceeding six months from the date they are due for payment

Considered Good 279.70 196.41

Considered Doubtful 7.15 10.14

286.85 206.55

Less : Provision for Doubtful Debts 7.15 10.14

279.70 196.41

Other Debts 780.56 800.62

1,060.26 997.03

21 Cash and Bank Balances (` in Crore)

As at 31st March, 2015 As at 31st March, 2014 (A) Cash and cash equivalents

Cash on hand 0.11 33.56

Balances with banks in Current Accounts 281.90 282.01 219.17 252.73

(B) Other Bank Balances Deposits with original maturity of less than three months *

11.89 8.72

Deposits with original maturity for more than 12 months *

673.28 715.53

Deposits with original maturity for more than 3 months but less than 12 months * 129.79 123.83

814.96 848.08

1,096.97 1,100.81



121

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 * Deposits (including long term deposits in Other Non Current Assets with balance maturity period of more than

12 months) of ` 819.88 Crore (Previous Year ` ` 545.49 Crore), have been pledged with banks as a security for opening Letters of Credit, Buyer’s Credit, Short Term Loans and against Bank Guarantee.

22 Short Term Loans and Advances (Unsecured and considered good unless otherwise stated) (` in Crore)


Loans and advances to Related Parties 1,973.09 1,831.34

Inter Corporate Deposits (ICD) to related parties 177.43 220.37

Deposits with Government & Semi Government Authorities

357.64 317.20

Loans and Advances to Suppliers 701.11 628.34

Prepaid Expenses 152.98 181.60

Claims Receivables 1,067.40 1,086.83

Security Deposits 79.13 85.05

Loans and Advances to Staff 2.48 2.45

4,511.26 4,353.18

23 Other Current Assets (` in Crore) As at 31st March, 2015 As at 31st March, 2014

Interest accrued on ICDs, Loans & Deposits 34.21 24.10

Interest accrued on Investments - 0.14

Export Benefits Accrued 98.38 114.25

Other Receivables (Net of Provision) 3,910.85 23.03

4,043.44 161.52

24 Revenue from Operations (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014

Sale of Products (Net of Excise) 16,627.57 15,391.37

Sale of Services 39.27 107.97

Other Operating Revenues (Net of Excise) 119.77 130.15

Excise Duty Recovered (including duty on trial run sales) 1,279.44 1,203.29

Total Gross Revenue from operation 18,066.05 16,832.78

Less: Trial Run Sales (including Excise Duty) (2,322.59) (2,098.54)

Revenue from operation 15,743.46 14,734.24

25 During the year, the Company has sold, on slump sale basis, a Business Undertaking, (pending commercial production) comprising of Slurry Pipeline at Odisha and associated facilities, and has also entered into a long term Right to Use Agreement for obtaining right to use the said pipeline for its pellets manufacturing operations. The sales consideration of ` 4,000 Crore is based on valuation of the business undertaking based on the above two contracts and carried out by independent valuation expert. The company has earned a profit of ` 2,793.04 Crore on the same.



Notes to Consolidated Financial Statements for the year ended 31st March, 201525(a) Other Income (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Interest on deposits with Banks and Others

Inter Corporate Deposits 83.92 112.99 Bank Deposits 40.80 36.14 Others 80.42 205.14 46.79 195.92

Rent 25.18 20.87 Profit on sale of Long Term Investments 419.26 - Dividend Income from Long Term Investments 0.34 0.34 Income from Management Services 0.21 17.45 Net Gain on foreign currency transactions and translation (other than considered as exchange variation on borrowings)

29.14 60.56

Interest on Swap Contracts 91.33 73.50 Liabilities no longer required written back:

- consequent to termination of contract & others

9.32 131.84

- consequent to assignment of profit/loss sharing arrangement

- 575.00

- consequent to settlement of restructure dues of subsidiaries

- 1,542.97

Miscellaneous Income 6.88 30.08 786.80 2,648.53

26 Cost of Materials Consumed (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Opening Stock 133.65 920.30 Add: Purchases during the year 7,253.77 5,851.08 Less: Closing Stock 279.61 133.65 Raw Materials Consumed 7,107.81 6,637.73 Production Consumables, Stores and Spares 1,241.89 1,102.29 Excise Duty* (1.37) (2.34)

8,348.33 7,737.68

* Represents differential Excise Duty in respect of Closing Stock and Opening Stock.

27 Purchase of Traded Goods (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Gases 47.85 487.94 TMT Bars and Others 249.95 180.11

297.80 668.05

28 Energy Cost (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Petroleum Products - Fuel 529.32 921.24 Power and Water Charges 1,284.86 1,611.36

1,814.18 2,532.60



123

Notes to Consolidated Financial Statements for the year ended 31st March, 201529 Decrease in Inventories of Finished Goods, Work in Progress and Stock in trade (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Opening Stock

Finished Goods 647.00 900.31 Work-in-Progress 1,114.97 1,147.09 Traded Goods 2.27 -

1,764.24 1,764.24 2,047.40 Closing Stock

Finished Goods 268.03 647.00 Work-in-Progress 1,053.24 1,114.97 Traded Goods - 2.27

1,321.27 1,764.24 442.97 283.16

30 Employee Benefits Expense (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Salaries 318.94 394.12 Contribution to Provident and Other Funds 28.06 18.80 Staff Welfare Expenses 58.50 57.83 Provision for Employees Stock Appreciation Rights - 0.52

405.50 471.27

31 Manufacturing and Asset Maintenance (` in Crore)

Year Ended 31st March, 2015 Year Ended 31st March, 2014Repairs, Maintenance and Equipment Hire Charges

333.29 358.97

Labour and Sub-Contracting Charges 142.65 139.66 Plant Insurance 15.88 18.16 Royalty on Input 27.06 8.60

518.88 525.39

32 Administrative Expenses (` in Crore) Year Ended 31st March, 2015 Year Ended 31st March, 2014

Traveling, Conveyance and Vehicle Hire & Maintenance Charges

33.42 16.95

Printing, Stationery,Postage and Telephone 10.70 4.59 Professional Fees 125.90 291.27 Operating Lease Rent 30.69 27.31 Repairs and Maintenance - Other than Plant 7.19 4.18 Insurance - Other than Plant 0.91 0.61 Rates and Taxes 7.61 10.81 Auditor's Remuneration* 2.02 1.75 Loss on sale/disposal/write off of Fixed Assets (net)

1.93 0.73

Miscellaneous Expenses 36.78 37.80 257.15 396.00

* Auditor’s Remuneration (excluding service tax)Audit Fees 1.90 1.75 Other Services 0.12 -

2.02 1.75



33 Selling and Distribution Expenses (` in Crore)


Sales Commission 132.36 113.78

Freight Outward (net), Intercarting and Packing Charges

325.78 393.74

Other Selling Expenses 33.75 39.67

491.89 547.19

34 Finance Cost (` in Crore)


Guarantee and Other Bank Charges 610.22 503.96

Interest

on Term Loans 2,276.19 2,906.50

on Debentures 54.07 82.35

on Advance from Customer 83.02 -

on Inter Corporate Deposits 368.56 245.77

to Banks and Others 865.23 841.53

3,647.07 4,076.15

4,257.29 4,580.11

35 Exchange Variation and Derivative (Gain)/Loss (net) (` in Crore)


Mark to Market on Derivative Contract (22.04) (12.52)

Exchange Variation (net) 39.49 233.40

Amortisation of Foreign Currency Monetary Item Translation Difference

11.77 11.90

Loss on cancellation/settlement of Derivative and Forward Exchange Contracts (Net of Premium paid / Amortised)

336.46 278.09

365.68 510.87

36 Contingent Liabilities not provided for (` in Crore) As at 31st March, 2015 As at 31st March, 2014

(a) Bills Discounted 430.94 567.65 (b) Claims against the Company not

acknowledged as debt in respect of:(i) Disputed Sales Tax/VAT/ Entry

Tax matters in respect which the Company has gone in appeal

18.68 20.50

(ii) Disputed Excise Duty matters in respect which the Company has gone in appeal

0.17 1.14

(iii) Disputed Custom Duty / Export Duty matters in respect which the Company has gone in appeal

134.11 200.92

Notes to Consolidated Financial Statements for the year ended 31st March, 2015



125

As at 31st March, 2015 As at 31st March, 2014 (iv) Tax on sale of Electricity demanded

by collector of electricity duty on Essar Power Limited

45.91 45.91

(v) Electricity Duty demand1 [including amount paid ` 589.24 Crore (Previous year ` 589.24 Crore)]

609.01 609.01

(vi) Wheeling Charges demanded by GETCO2 [including amount paid ` 27.23 Crore (Previous year ` 27.23 Crore)]

393.01 393.01

(vii) Freight Claim by South East Railway [including amount paid ` 14.48 Crore (Previous year ` 14.48 Crore)]

100.53 100.53

(viii) Disputed Differential Electricity Duty [including amount paid ` 49.39 Crore (Previous year ` 49.39 Crore)]

49.39 49.39

(ix) Others 26.42 26.37

(c) Guarantees given to various Banks, Financial Institutions, Finance Companies, etc. on behalf of others to the extent of outstanding balance of principal liabilities as at the year-end against the said guarantees

1,104.49 733.57

(d) Share in Contingent Liability of Associates 11.94 112.98 Future cash outflows in respect of above matters are determinable only on receipt of judgments/decisions pending at

various forums/authorities. 1. A Show Cause Notice (SCN) dated 10th March, 2010 was issued by the Collector Electricity Duty, Gandhinagar,

demanding Electricity Duty ` 585.31 Crore and Interest ` 528.48 Crore for the period April 2000 to February 2010. The Company has claimed that it is exempt from paying the Electricity Duty for a period of 15 years from the date of commissioning of the captive power project i.e. from 8th August, 1995 to 7th August, 2010.

The Company filed an appeal to the Division Bench of Gujarat High Court against the same which was admitted by the Court and a stay was granted vide order dated 5th April, 2010. As per the conditions of stay, the Company has paid under protest ` 589.24 Crore (Previous year ` 589.24 Crore) towards the arrears of the principal amount of electricity duty.

As per the management view and based on the legal opinion from a reputed counsel, the Company is eligible for exemption of Electricity Duty for the period of 15 years i.e. from 8th August, 1995 to 7th August, 2010 and accordingly no provision is required to be made in the books. However the Company has disclosed ` 609.01 Crore towards electricity duty on account of above matter as contingent liability as at 31st March, 2015 and has considered demand of interest as a remote liability.

2. In January 2006, the Dakshin Gujarat Vij Company Limited (“DGVCL”) claimed from Essar Steel India Limited (“ESIL”) for payment of wheeling charges on the ground that ESIL is using its distribution system for conveyance of electricity generated by its two captive power plants to the manufacturing units. In so claiming, the contention of DGVCL was that Bus Bars engineered, procured and constructed by ESIL at its own cost is a part of its service line and since the electricity of ESIL is conveyed through the service line, ESIL is liable to pay wheeling charges. ESIL denied the said claim by contending that Bus Bars are an integral part of its switchyard, which is constructed, operated and maintained by ESIL and the same cannot be a service line or extension thereof laid down by the Gujarat Electricity Board (“GEB”). Thereafter, in June 2006, DGVCL served a further demand-cum-disconnection notice on ESIL, which ESIL challenged before the Gujarat High Court by filing a writ petition. The petition was dismissed by the Ld. Single Judge of the Hon’ble High Court on 15th January 2007. After the said judgment, DGVCL abandoned its said claim for payment of wheeling charges and in lieu thereof, the Gujarat Electricity Transmission Corporation Limited (“GETCO”) raised a demand on ESIL for payment of transmission charges on the ground that ESIL is, inter alia, is using its transmission system for conveyance of its electricity. GETCO claimed that the Bus Bars are a part of its transmission line and since the same are used, inter alia, by ESIL for conveyance of its electricity, it is liable to pay transmission charges to GETCO.




ESIL denied the said claim of GETCO and further filed an appeal before the Division Bench of the Gujarat High Court, which rejected ESIL’s application for interim stay of recovery of the transmission charges pending hearing and final disposal of the appeal. Consequently, ESIL approached the Supreme Court, which stayed the recovery of transmission charges by GETCO subject to ESIL paying 30% of the transmission charges demanded in February 2007, which was complied with by ESIL. Finally, the Division Bench dismissed the appeal filed by ESIL by Judgment dated 30th August 2011. ESIL has preferred a Special Leave Petition (Civil) No.27540 of 2011 before the Hon’ble Supreme Court, which has stayed recovery of the transmission charges and the matter is pending for final hearing.

Bus Bars are, inter alia, ESIL’s installation situated within its own premises beyond the Delivery Point. The same are thus, not a part of transmission line or an extension thereof of GETCO. There is no provision in law providing for vesting of any transmission line constructed by one person in another. GETCO, being the transmission licensee has not granted any open access to its transmission system to ESIL and thereby one of the conditions of the charging Section 40 of the Electricity Act, 2003 has not been fulfilled and GETCO is, therefore, not entitled to receive payment of any transmission charges from ESIL.

As per the Memorandum of Minutes dated 1st February 2010, ESIL has shifted the Ichhapore service line to another location. Thereafter, GETCO has stopped billing transmission charges to ESIL. As per the view of the management of ESIL as well as of its reputed Counsel, ESIL is not liable to pay any transmission charges to GETCO and hence no provision is required to be made in the books for the same. However, ESIL has disclosed ` 393.01 Crore (Previous Year `393.01 Crore) as contingent liability as on 31st March 2015 towards demand of transmission charges and has considered demand for interest as a remote liability.

36(A) Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to Schedule III to the Companies Act 2013:

Company

Net Assets, i.e. total assets minus total liabilities

Share in profit or loss

As % of consolidated

net assets

Amount (` in Crore)

As % of consolidated profit or loss

Amount (` in Crore)

Parent Essar Steel India Limited 133.70% 13,779.19 138.91% 648.05

Indian Subsidiary

Paradeep Steel Company Limited -0.10% (10.15) -2.22% (10.35)

Foreign Subsidiaries

Essar Steel Trading FZE 0.47% 48.30 0.56% 2.62

Essar Steel Middle East FZE 3.71% 382.26 7.17% 33.45

Essar Steel Offshore Limited -2.24% (231.20) -32.96% (153.75)

Essar Minerals Limited 9.57% 985.96 -3.34% (15.57)

Essar Mineral Cooperatief U.A. 15.39% 1,586.53 -9.27% (43.27)

Essar Minerals Canada Limited 12.92% 1,331.78 -1.31% (6.10)

Essar Minerals INC -10.71% (1,103.40) -23.12% (107.86)

New Trinity Holdings LLC and Subsidiaries

28.37% 2,923.55 -34.69% (161.82)

Elimination/ Adjustment due to consolidation

-94.32% (9,720.25) 62.09% 289.69

Indian Associates (Investment as per the equity method)

Essar Bulk Terminal Limited 0.06% 6.65 -0.51% (2.38)

Essar Power MP Limited 0.60% 62.18 -1.44% (6.72)

Bhander Power Limited 2.46% 253.62 0.08% 0.37

Essar Power Orissa Limited 0.02% 2.54 0.00% (0.02)

Essar Power Hazira Limited 0.03% 2.59 0.00% -

Essar Steel Chhattisgarh Limited 0.06% 5.89 0.04% 0.19

Total 100.00% 10,306.03 100.00% 466.53



127

(` in Crore) As at

31st March, 2015 As at

31st March, 2014 37 (a) Estimated amount of contracts remaining to be executed on capital

account and not provided for 531.39 842.19

(b) Share in Capital Commitments of Associates 62.42 179.23

(c) Custom Duty on pending export obligation under EPCG scheme 4,500.95 4,180.97

38 Segment Information Primary Business Segment The Group has disclosed business Segment as Primary Segment. The Segment have been identified taking into

account the nature of Product. The Company’s operation predominantly relate to manufacture of Steel and extraction of Minerals. Segment Result Segment Revenue, Segment Assets & Segment Liabilities include the respective amount identifiable to each of the segment.

(` in Crore)

Particular Year Ended 31st March, 2015 Year Ended 31st March, 2014 Steel Mineral Unallocated Total Steel Mineral Unallocated Total

Segment Revenue 15,571.47 171.99 - 15,743.46 14,511.57 222.67 - 14,734.24Segment Results [Profit/ (Loss)]

5,525.62 (150.57) - 5,375.05 2,345.08 1,139.40 - 3,484.48

Less: Finance Cost, Exchange Variation and Derivative

- - 4,622.97 4,622.97 - - 5,090.98 5,090.98

Losses (net)Add: Interest Income - - 83.92 83.92 - - 112.99 112.99Profit/(Loss) before Taxation

- - - 836.00 - - - (1,493.51)

Tax Expense - - 360.91 360.91 - - (688.76) (688.76)Profit/(Loss) after Taxation

- - - 475.09 - - - (804.75)

Segment Assets 61,070.81 3,453.60 990.08 65,514.49 52,371.59 3,447.09 1,046.58 56,865.26Segment Liability 19,589.38 421.34 37,284.14 57,294.86 13,773.38 389.99 39,859.25 54,022.62Addition to Fixed Assets

28,164.05 - - 28,164.05 3,236.94 310.53 - 3,547.47

Depreciation 814.34 97.23 - 911.57 1,076.08 125.23 - 1,201.31

Geographical Segments Secondary segment reporting is based on the geographical location of customers. The geographical segments have

been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.

Information about Geographical Segments(` in Crore)

Segment Information Year ended 31st March, 2015 Year ended 31st March, 2014India Outside

IndiaTotal India Outside

IndiaTotal

Revenue (Income from operation)

11,899.71 3,843.75 15,743.46 10,606.92 4,127.32 14,734.24

Carrying amount of segment assets

59,513.29 6,001.21 65,514.49 50,932.11 5,933.15 56,865.26

Carrying amount of segment liabilities

31,829.64 25,465.22 57,294.86 36,689.60 17,333.02 54,022.62

Additions to fixed assets (excluding capital work-in- progress)

28,164.05 - 28,164.05 3,236.94 310.53 3,547.47



39 Disclosure of related party transactions as required by Accounting Standard - 18 Related Party Disclosures:

(a) Holding Company 1 Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Ltd) Immediate Holding Company-

(ESAHL) 2 Essar Steel Mauritius Limited – Holding Company of Essar Steel Asia Holdings Limited - (ESML) 3 Essar Global Fund Limited (FKA Essar Global Limited), Cayman Islands – Holding Company of Essar

Steel Mauritius Limited (EGFL) (b) Subsidiary (refer Note 3) 1 Odisha Slurry Pipeline Limited (OSPIL) (c) Fellow Subsidiaries

1 Essar Steel Logistics Limited (ESLL) 20 Essar Shipping Limited (ESL) 2 Essar Steel Limited (FKA Essar Steel

Holdings Limited) (ESTLM) 21 Essar Oilfields Services India Limited (EOSPL)

3 Essar Steel Algoma Inc (ESA-INC) 22 Essar Logistics Limited (ELL) 4 PT Essar Indonesia (PTEI) 23 Essar Ports Limited (EPL) 5 Essar Pellets Marketing Ltd, India (EPML) 24 Vadinar Oil Terminal Limited (VOTL) 6 Essar Energy Limited (FKA Essar Energy Plc)

(EEPLC) 25 Vadinar Ports & Terminal Limited (VPTL)

7 Essar Oil Limited (EOL) 26 Essar Bulk Terminal Paradip Limited (EBTPL) 8 Essar Oil (UK) Limited (EOUKL) 27 Essar Bulk Terminal (Salaya) Limited (EBTSL) 9 Essar Power (Jharkhand) Limited (EPJL) 28 Essar Telecom Kenya Limited (ETKL)

10 Essar Power Gujarat Limited (EPGL) 29 AGC Networks Limited (AGCNL) 11 Essar Power Transmission Company Limited

(EPTCL) 30 Aegis Limited (AEGIS)

12 Essar Electric Power Development Corporation Limited (EEPDCL)

31 Equinox Business Parks Pvt Limited (EBPPL)

13 Vadinar Power Company Limited (VPOCL) 32 Essar Africa Holdings Limited (EAHL) 14 Navbharat Power Private Limited (NPPL) 33 Essar Mineral Resources Limited (EMRL) 15 Essar Project (India) Limited (EPIL) 34 Essar Global Services FZE, UAE (EGSF) 16 Essar Constructions Overseas Limited (ECOL) 35 Peak Trading Overseas Limited (PTOL) 17 Essar Offshore Subsea Limited (EOSL) 36 Essar Power Limited. (EPOL) ( w.e.f. 26.09.2014) 18 Essar Refinery Projects Limited, India (FKA

Essar Road Projects Limited) (ERPL)37 Tirunelweli Wind Farms Limited (TWFL)

19 Essar Shipping & Logistics Limited (ESALL) 38 Vadinar Properties Limited ( VPRL) (d) Associates

1 Bhander Power Limited. (BPOL) 5 Essar Power Hazira Limited (EPHL) 2 Essar Bulk Terminal Limited. (EBTL) 6 Essar Power Limited. (EPOL) ** 3 Essar Power ( Orissa) Limited. (EPOOL) 7 Essar Steel Processing FZCO (ESP-FZCO) 4 Essar Steel Chhattisgarh Limited. (ESCL) 8 Essar Power MP Limited(EPMPL)

** Ceased to be an associate w.e.f. 26.09.2014 (e) Key Management Personnel 1 Mr. Firdose A. Vandrevala, Executive Vice Chairman (FV) 2 Mr. Dilip Oommen, Managing Director & CEO (DO) 3 Mr. Mahadev Iyer, Director (Finance) & CFO (MI) 4 Mr. Alok Gupta, Director (Marketing) (AG) (Ceased whole-time director w.e.f. 16.11.2013 ) 5 Mr. Ashutosh Agarwala, Director (Finance) (AA)(Ceased to be whole-time director w.e.f. 16.11.2013)




129

During the year, following transactions were carried out with some of the related parties in the ordinary course of business: (excluding reimbursement)

(` in Crore)

Sr. No.


Subsidiary Fellow Subsidiaries


Personnel

(a) Sales / Sales Return of Goods (Net) - - 222.14 2.05 -

- - (543.64) (5.20) -

(b) Income-Lease Rentals/Rent building - - 6.71 13.99 -

- - (5.89) (8.18) -

(c) Interest Income-Others 3.05 - 84.09 - -

(3.00) - (79.42) - -

(d) Sale of Business Undertaking - 4,000.00 - - -

- - - - -

(e) Sales of Fixed assets - - - 20.46 -

- - - - -

(f) Management Fees - Income - - 0.21 - -

- - (17.45) - -

(g) Purchase of Raw Materials,Stores and Spares, Production Consumables and Freight

- - 792.22 419.37 -

- - (929.48) (560.27) -

(h) Purchase of Petroleum Products (Fuel)

- - 0.88 - -

- - (0.17) - -

(i) Power Processing Charges / Recovery

- - 63.81 165.79 -

- - (452.38) (597.10) -

(j) Water Charges - - 0.34 -0.22 -

- - (0.04) - -

(k) Repairs and Maintenance - - 6.58 - -

- - (43.24) (3.72) -

(l) Plant and Equipment Hire Charges - - 24.92 - -

- - (63.94) - -





(` in Crore)

Sr. No.




Personnel

(m) Labour Sub Contract Charges - - 0.58 - -

- - (1.93) - -

(n) Traveling and Conveyance - - -0.21 - -

- - (0.36) - -

(o) Professional Fees - - 36.11 - -

- - (25.88) - -

(p) Office Rent - - 7.29 - -

- - (7.29) - -

(q) Miscellaneous Expenses - - 0.04 - -

- - (0.20) - -

(r) Freight Outwards Expenses - - 196.54 139.54 -

- - (545.07) (16.87) -

(s) Sales Commission - - 31.30 - -

- - (47.39) - -

(t) Interest Expenses 58.87 - 327.09 75.96 -

- - (293.27) (82.95) -

(v) Capital Contract - - 103.91 0.00 -

- - (156.05) - -

(w) Sale of stores & Spares - - 0.17 0.03 -

- - (0.88) - -

(x) Directors’ Remuneration - - - - 11.57

- - - - (7.73)

(aa) ICD taken 655.26 - 2,756.47 175.00 -

- - (2,832.37) (100.00) -

(ab) Repayment of ICD taken - - 2,274.06 - -

- - (2,716.76) - -

(ac) Purchase of Investment - 25.50 - 64.67 -

- - - - -

(ad) Purchase of Fixed Assets - - 42.76 - -

- - (95.83) - -

(ae) Issue of Share Capital 99.71 - 200.00 - -

(16.16) - (10.93) - -



131

Notes to Consolidated Financial Statements for the year ended 31st March, 2015 Balance outstanding at year end

(` in Crore)

Sr. No.




Personnel

(a) Long Term Investments - 25.50 46.82 186.20 -

- - (52.79) (280.90) -

(b) Debtors - - 17.31 - -

- - (21.66) (0.10) -

(c) Other Current Advance - 3,868.50 0.32 0.46 -

- - (15.55) (0.39) -

(d) Deposits - - 4.37 - -

- - (4.78) - -

(e) Other Advance( Including Advance Towards Equity)

0.50 6.26 1,972.16 0.28 -

(0.50) - (1,841.09) - -

(f) Sundry Creditors Payable - - 966.90 628.44 -

- - (790.78) (730.17) -

(g) Capital Advances (CWIP) - - 14.59 -1.21 -

- - (63.02) (-21.67) -

(h) Advance From Customer - - 494.32 0.15 -

- - (857.00) (0.16) -

(i) Inter Corporate Deposits Given 111.11 - 77.43 - -

(103.88) - (116.49) - -

(j) Inter Corporate Deposits Taken 1,748.57 - 2,062.00 275.00 -

(956.70) - (1,546.01) (100.00) -

(k) Security Deposits Received - - 4.22 - -

- - (19.78) - -

(l) Guarantees Given - - 49.23 182.99 -

- - (162.24) (69.98) -

(m) Guarantees Received 14,301.82 - 5,787.71 - -

(17,631.03) - (5,097.00) - -



Details of Party wise transactions : (` in Crore)

Name of Related Party Nature of Transaction BPOL EBTL EPOL EPHL EOL EPGL EPMPL AEGIS ELL EPIL

(a) Sales / Sales Return of Goods (Net) 0.07 1.98 - - 35.05 - - - 3.28 130.58 (3.74) (1.46) - - (262.60) - (0.07) - - (62.93)

(b) Income - Lease Rentals/Rent building 11.38 0.28 0.18 2.33 0.21 - - 0.29 0.28 5.67 (7.62) (0.28) (0.28) - (0.10) - - (0.83) (0.07) (4.56)

(c) Interest Income-Others - - - - 4.47 - - - - - - - - - - - - - - -

(d) Sale of Business Undertaking - - - - - - - - - - - - - - - - - - - -

(e) Sale Of Fixed Assets - - - - - - - - - - - - - - - - - - - -

(f) Management Fees -Income - - - - - - - - - - - - - - - - - - - -


- 419.37 -0.00 - 74.15 - - - 205.04 2.31 - (560.27) (0.02) - (22.64) - - - (11.51) (23.17)

(h) Purchase of Petroleum Products (Fuel) - - - - 0.89 - - - -0.02 - - - - - - - - - - -

(i) Power Processing Charges / Recovery 12.42 - 55.20 - 9.18 1.99 146.16 - - - (399.01) - (198.08) - (64.19) (5.45) (271.94) - - -

(j) Water Charges (Recovered) -0.22 - -0.05 - - - - - - 0.39 (-0.84) - (-0.17) - - - - - - (0.04)

(k) Repairs and Maintenance - - 1.96 - - - - - - 4.54 - - (3.72) - - - - (0.05) (0.01) (42.91)

(l) Plant and Equipment Hire Charges - - - - - - - - 14.74 10.10 - - - - - - - - (1.33) (57.56)

(m) Labour Sub Contract Charges - - - - - - - - 0.09 0.49 - - - - - - - - (0.96) (0.15)

(n) Traveling and Conveyance - - - - -0.29 - - 0.00 - - - - - - (0.36) - - - - -

(o) Professional Fees - - - - 0.11 - - 34.18 - 1.69 - - - - (0.06) - - (25.14) - (0.53)

(p) Office Rent - - - - 0.01 - - - - - - - - - (0.01) - - - - -

(q) Miscellaneous Expenses - - - - - - - -0.03 - 0.06 - - - - - - - (0.09) - (0.11)

(r) Freight Outwards Expenses - 139.54 - - - - - - 183.17 0.07 - (16.87) - - - - - - (119.69) (5.23)

(s) Sales Commission - - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses 10.03 39.34 12.13 - 92.17 - - - 21.46 0.44 (57.11) (27.17) 1.41 - (6.96) - - - (24.34) (55.11)

(v) Capital Contract - - - - - - - -0.00 0.04 103.88 - - - - - - - (1.85) (0.01) (154.17)

(w) Sale of stores & Spares - 0.03 - - - - - - - 0.17 - - - - - - - - - (0.88)

(x) Directors Remuneration (including perquisites) - - - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - - 2,058.21 - - - 258.62 - - - - - (160.00) - - - (353.17) (244.30)

(ab) Repayment of ICD taken - - - - 1,141.40 - - - 264.00 - - - - - (160.00) - - - (381.45) (450.99)

(ab) Other Deposit Given - - - - - - - - - - - - - - - - - - - -

(ac) Purchase of Investments - - - - - - 63.70 - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - - 42.76 - - - - - - - - - (95.28)

(ae) Share Application Money received - - - - - - - - - - - - - - - - - - - -

(ad) Share Application Money Refunded - - - - - - - - - - - - - - - - - - - -

(ae) Issue of Share Capital (Including Premium) - - - - - - - - - - - - - - - - - - - -




133

Name of Related Party Nature of Transaction ESL EBTPL ESTLM EPML PTEI EOSL EPOOL NPPL EEPDCL EPTCL ECOL

(a) Sales / Sales Return of Goods (Net) - - - 0.00 13.72 - - - - - 0.06 - - - - (30.91) - - - - - (0.07)

(b) Income - Lease Rentals/Rent building - - - - - - - - - 0.07 - - - - - - - - (0.05) - (0.05) -

(c) Interest Income-Others - - 20.96 - - - - - - - - - - (10.35) - - - - - - - -

(d) Sale of Business Undertaking - - - - - - - - - - - - - - - - - - - - - -

(e) Sale Of Fixed Assets - - - - - - 20.46 - - - - - - - - - - - - - - -

(f) Management Fees -Income - - 0.21 - - - - - - - - - - (17.45) - - - - - - - -


365.41 142.94 - - - - - - - - - (612.10) (147.56) - - - - - - - - -

(h) Purchase of Petroleum Products (Fuel) - - - - - - - - - - - - - - - - - - - - - -

(i) Power Processing Charges / Recovery - -3.33 - - - - 7.21 - 0.76 - - - (-3.46) - - - - - - (114.26) - -

(j) Water Charges (Recovered) - - - - - - - - - - - - - - - - - - - - - -

(k) Repairs and Maintenance 0.00 - - - - - - - - - - - - - - - - - - - - -

(l) Plant and Equipment Hire Charges - - - - - - - - - - - - - - - - - - - - - -

(m) Labour Sub Contract Charges - - - - - - - - - - - - - - - - - - - - - -

(n) Traveling and Conveyance - - - - - - - - - - - - - - - - - - - - - -

(o) Professional Fees - - - - 0.12 - - - - - - - - - - (0.16) - - - - - -

(p) Office Rent 0.02 - - - - - - - - - - (0.02) - - - - - - - - - -

(q) Miscellaneous Expenses - - - - - 0.01 - - - - - - - - - - - - - - - -

(r) Freight Outwards Expenses 14.83 5.49 - - - - - - - - - (44.77) (7.08) - - - - - - - - -

(s) Sales Commission - - 31.30 - - - - - - - - - - (47.39) - - - - - - - -

(t) Interest & Other Financial Expenses 1.46 21.03 - 26.59 - 50.67 - 0.12 - - - (11.60) (11.90) - (0.07) - (105.59) - (4.28) - - -

(v) Capital Contract - - - - - - - - - - - - - - - - - - - - - -

(w) Sale of stores & Spares - - - - - - - - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - 175.00 - - - - - - - - - - (100.00) - (697.00) - (32.00) - - -

(ab) Repayment of ICD taken - - - - - 484.15 - 32.00 - - - - - - - - (768.42) - - - - -

(ab) Other Deposit Given - - - - - - - - - - - - - - - - - - - - - -

(ac) Purchase of Investments - - - - - - 0.97 - - - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - - - - - - - - - - - - - - -

(ae) Share Application Money received - - - - - - - - - - - - - - - - - - - - - -

(ad) Share Application Money Refunded - - - - - - - - - - - - - - - - - - - - - -

(ae) Issue of Share Capital (Including Premium)

- - - - - - - - - - - - - (10.93) - - - - - - - -




Name of Related Party Nature of Transaction ESAHL ESML AGCNL EBTSL VPTL ESLL EOUKL EPJL EBPPL TWFL VPOCL

(a) Sales / Sales Return of Goods (Net) - - - 12.60 - - 2.42 - - - - - - - - (0.02) - (0.37) -

(b) Income - Lease Rentals/Rent building - - - - - 0.00 - - - - - - - - - (0.21) - - -

(c) Interest Income-Others 3.05 - - - - - - - - - - (3.00) - - - - - - -

(d) Sale of Business Undertaking - - - - - - - - - - - - - - - - - - - - - -

(e) Sale Of Fixed Assets - - - - - - - - - - - - - - - - - - -

(f) Management Fees -Income - - - - - - - - - - - - - - - - - - -


- - - - - 2.38 - - - - - - - - - (112.48) - - -

(h) Purchase of Petroleum Products (Fuel) - - - - - (0.00) - - - - - - - - - (0.17) - - -

(i) Power Processing Charges / Recovery - - - - - - - - - - - - - - - - - - -

(j) Water Charges (Recovered) - - - - - - - - - - - - - - - - - - -

(k) Repairs and Maintenance - - - - - 0.08 - - - - - - - (0.23) - (0.04) - - -

(l) Plant and Equipment Hire Charges - - - - - 0.08 - - - - - - - - - (5.04) - - -

(m) Labour Sub Contract Charges - - - - - - - - - - - - - - - (0.82) - - -

(n) Traveling and Conveyance - - - - - - - 0.07 - - - - - - - - - - -

(o) Professional Fees - - - - - - - - - - - - - - - - - - -

(p) Office Rent - - - - - - - - 7.26 - - - - - - - (7.26) - -

(q) Miscellaneous Expenses - - - - - - - 0.00 - - - - - - - - - - -

(r) Freight Outwards Expenses - - - - - (7.02) - - - - - - - - - (368.30) - - -

(s) Sales Commission - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses 43.20 - - - 33.21 - - - 0.63 32.35 28.66 - - - (33.56) - - (32.70) -

(v) Capital Contract - - - - - (0.00) - - - - - - - - - (0.02) - - -

(w) Sale of stores & Spares - - - - - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - - - - - -

(aa) ICD taken - - - - - - - - - - 264.64 - - - (445.00) - - (280.00) (520.90)

(ab) Repayment of ICD taken - - - - - - - - - 239.34 71.70 - - - (435.00) - - - (520.90)


(ac) Purchase of Investments - - - - - - - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - 0.00 - - - - - - - - - (0.56) - - -




99.71 - - - - - - - - 200.00 - (16.16) - - - - - - -




135

Name of Related Party Nature of Transaction OSPIL VPRL ESCL PTOL ESA-INC EGFL DO AG MI AA FV

(a) Sales / Sales Return of Goods (Net) - - - 24.43 - - - - - - - - - (186.74) - - - - -

(b) Income - Lease Rentals/Rent building - - - - - - - - - - - - - - - - - - -

(c) Interest Income-Others - - - 58.67 - - - - - - - - (69.07) - - - - - -

(d) Sale of Business Undertaking 4,000.00 - - - - - - - - - - - - - - - - - - - - -

(e) Sale Of Fixed Assets - - - - - - - - - - - - - - - - - - -

(f) Management Fees -Income - - - - - - - - - - - - - - - - - - -


- - - - - - - - - - - - - - - - - - -

(h) Purchase of Petroleum Products (Fuel) - - - - - - - - - - - - - - - - - - -

(i) Power Processing Charges / Recovery - - - - - - - - - - - - - - - - - - -

(j) Water Charges (Recovered) - - - - - - - - - - - - - - - - - - -

(k) Repairs and Maintenance - - - - - - - - - - - - - - - - - - -

(l) Plant and Equipment Hire Charges - - - - - - - - - - - - - - - - - - -

(m) Labour Sub Contract Charges - - - - - - - - - - - - - - - - - - -

(n) Traveling and Conveyance - - - - - - - - - - - - - - - - - - -

(o) Professional Fees - - - - - - - - - - - - - - - - - - -

(p) Office Rent - - - - - - - - - - - - - - - - - - -

(q) Miscellaneous Expenses - - - - - - - - - - - - - - - - - - -

(r) Freight Outwards Expenses - - - - - - - - - - - - - - - - - - -

(s) Sales Commission - - - - - - - - - - - - - - - - - - -

(t) Interest & Other Financial Expenses - - 26.59 - 6.17 15.67 - - - - - (0.07) - (7.15) - - - - -

(v) Capital Contract - - - - - - - - - - - - - - - - - - -

(w) Sale of stores & Spares - - - - - - - - - - - - - - - - - - -


- - - - - - 2.83 - 2.17 - 6.56 - - - (2.57) (1.13) (0.89) (1.04) (2.09)

(aa) ICD taken - - 175.00 - - 655.26 - - - - - (100.00) - - - - - - -

(ab) Repayment of ICD taken - 41.48 - - - - - - - - - - - - - - - - -


(ac) Purchase of Investments 25.50 - - - - - - - - - - - - - - - - - -

(ad) Purchase of Fixed Assets - - - - - - - - - - - - - - - - - - -




- - - - - - - - - - - - - - - - - - -




Bal

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23.14

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- (1

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(0.04

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(1.72

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- (0

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- 0.

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Othe

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0.54

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4.25

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0.50

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2.75

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0.11

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dry C

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2.83

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22.81

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84.96

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111.1

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- (0

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(0.16

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- -

- -

14.59

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- -

- -

- -

- -

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- (6

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Adv

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(0.01

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(0.02

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Inter

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77.43

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- -

- -

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- -

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Inter

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9.55

858.7

0 -

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0 -

140.3

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889.8

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- (2

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(100

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- (1

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(174

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- -

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Sec

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Rec

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-

- -

- -

- -

4.22

-

- -

- -

- -

-

- -

- -

- -

- -

- -

- -

- -

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Sha

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49.23

-

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- -

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(49.2

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787.7

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2 4,

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- -

- -

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- -

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- -

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- -

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Note

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Con

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Bal

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Inter

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0 -

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(174

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Sec

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4.22

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- -

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- -

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49.23

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(49.2

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- -

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Note

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Bal

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out

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Long

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Inve

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60

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- 11

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68.90

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Deb

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35

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(4.35

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0.18

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7.

89

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13.59

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- 0.

21

(0.16

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(0.18

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(0.35

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(0.17

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(67.9

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- (0

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Sun

dry C

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2.

32

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- -

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8.40

64

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3.04

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(58.5

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- -

- -

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(101

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(22.2

9) (1

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Cap

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CWIP

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- -1

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- -

- -

- -

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(-21

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139

40 Leases Operating lease Residential Houses for staff accommodation, offices and equipments are obtained on operating lease. Lease rent is

payable as per the lease term. The lease term is generally for 11 months and renewable for a further period at the option of the Company. There are no restrictions imposed by lease arrangements.

(` in Crore)



Finance lease

Operating lease

Finance lease

Operating lease

Assets taken on Finance Lease on or after 1 April, 2001Total minimum lease payments at the year end 0.64 - 1.91 -Less: amount representing finance charges 0.01 - 0.09 -Present value of minimum lease payments (Rate of Interest 6.00% p.a.)

0.63 - 1.83 -

Lease payments for the year 1.28 36.79 1.28 37.06Minimum Lease payments :Not later than one year 0.64 29.70 1.28 18.30Later than one year but not later than five years - 35.08 0.63 43.88Later than five years - 34.39 - 33.13

41 Employee Benefits (i) Defined Contribution Plan Company’s contribution to Provident Fund aggregating to ` 13.59 Crore (Previous year ` 14.86 Crore) are

recognised in the Statement of Profit and Loss and capital work in progress, as applicable. There is no obligation other than the contribution payable to the respective funds.

(ii) Defined Benefit Plan The Company has a defined benefit Gratuity plan. Every employee who has completed five years or more of

service gets a Gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The plan is funded through a Gratuity Scheme administered by Life Insurance Corporation of India (LIC).

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and Capital Work in Progress -

(` in Crore)



Net Employee Benefit Expense recognisedCurrent Service Cost 5.48 5.81Interest Cost 4.50 3.90Expected Return on Plan Assets (3.10) (3.00)Net Actuarial (gain)/loss recognised in the year 6.20 (4.85)Total 13.08 1.86Actual return on Plan Assets 3.41 3.21

The following tables summarise the components of the funded status and amounts recognised in the Balance Sheet for the respective plans -

Details of provision for GratuityPresent Value of Obligation (A) 64.32 52.19Fair value of Plan Assets (B) (39.92) (36.38)Liability Recognised in Balance Sheet (Refer note 9) 24.40 15.81



(` in Crore)



(A) Changes in the present value of the defined benefit obligation are as follows:

Projected Benefit Obligations (PBO) at the beginning of the year

52.19 52.34

Interest Cost 4.50 3.90

Service Cost 5.48 5.81

Benefits paid (5.36) (5.22)

Acquisition/Transfer In/(Transfer Out) 0.99 -

Actuarial (gain)/loss on obligations 6.52 (4.64)

PBO at the end of the year 64.32 52.19

(B) Changes in the fair value of plan assets are as follows:

Fair Value of Plan Assets at the beginning of the year 36.38 37.41

Acquisition Adjustment 2.90 -

Expected Return on Plan Assets 3.10 3.00

Contributions/Transfers 2.24 0.72

Benefits paid (5.02) (4.96)

Actuarial Gain / (loss) on Plan Assets 0.32 0.21

Fair Value of Plan Assets at the end of the year 39.92 36.38

Investment details of plan assets100% of the plan assets are administered by LIC.

AssumptionsDiscount Rate 7.80% 9.20%

Rate of Return on Plan Assets 8.50% 8.50%

Mortality Indian Assured Lives Mortality (2006 - 08)

Indian Assured Lives Mortality (2006 - 08)

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority,

promotion and other relevant factors such as supply and demand factors in the employment market. Experience History (` in Crore)

ParticularsAs at

31st March, 2015

As at 31st March,

2014

As at 31st March,

2013

As at 31st March,

2012

As at 31st March,

2011Defined Benefit Obligation at end of the period (64.32) (52.19) (52.34) (45.29) (37.19)Plan assets at end of the period 39.92 36.38 37.41 36.84 33.01Funded Status (24.40) (15.81) (14.93) (8.45) (4.18)Experience Gain/(Loss) adjustments on plan liabilities (1.54) 0.48 0.75 (4.22) (2.44)Experience Gain/(Loss) adjustments on plan assets 0.32 0.21 0.49 1.57 1.17Actuarial Gain/(Loss) due to change in assumptions (4.98) 4.15 (2.19) 1.71 0.73

The Company expects to contribute ` 1.00 Crore to its plan assets in Financial Year 2015 -16.



141

42 The Company has undertaken substantial expansion plans for its steel production capacities by installing new steel facilities at Hazira, Pellet plant at Odisha, and Slurry Pipeline (for transportation of slurry from Beneficiation plant to Pellet plant) to feed the pellet requirement of new steel facility. These plants constitute an integrated facility, being set up by using new technology to achieve higher output at lower cost of inputs. Although completion and commencement of steel manufacturing plants at Hazira (Hazira Units) was achieved in phases in earlier period, Slurry pipeline in Odisha was made operative during current financial year and as per relevant accounting standard the commercial production from other integrated facilities comprising of Hazira Units, Pellet Plant Phase -1 commenced at the end of the year as a result of which abnormal costs have been incurred during the year by Hazira Units due to their operation at sub-optimal level.

Abnormal costs incurred during current year of ` 1,203.14 Crore (Previous Year ` 1,227.54 Crore) related to Hazira Units have been capitalised on the basis of opinion received from eminent experts in the field of accountancy after considering relevant accounting standards read with other pronouncements by the Institute of Chartered Accountants of India. However finance cost relating to Hazira Units have been continued to be charged to Statement of Profit and Loss as per the accounting policy and Accounting Standard - 16 – “Borrowing Costs”

43 Earnings Per Share:



Net Profit/(Loss) as per statement of Profit & Loss ` Crore 466.53 ` Crore (1,054.67)

Less: Dividend on Preference Shares for the year (including dividend distribution tax)

` Crore (5.10) ` Crore (5.10)

Net Earning/(loss) for the purpose of basic and diluted earning per shares

` Crore 461.43 ` Crore (1,059.77)

Weighted average number of shares for the purpose of calculating Basic earning per share

2,842,516,501 2,809,319,278

Weighted average number of shares for the purpose of calculating Diluted earning per share

2,842,516,501 2,809,319,278

Earnings/(Loss) Per Share

Basic earning/(loss) per Equity share of ` 10 each (in Rupees) 1.62 (3.77)

Diluted earning/(loss) per Equity share of ̀ 10 each (in Rupees) 1.62 (3.77)

44 Derivative Instruments and Unhedged Foreign Currency Exposure (A) Derivative Instruments

Sr.No.

Type of Transaction Amount as at31st March, 2015

Amount as at31st March, 2014

Currency Purpose

1 Coupon Only Swaps (USD / INR)

- 1,000,000,000 INR To reduce the interest cost on Long Term Rupee Term loan

2 Rupee Indexed Interest Rate Swaps (Overnight Index Swap)

500,000,000 1,500,000,000 INR To reduce the interest cost on Long Term Rupee Term loan

3 Principal Only Swap 16,490,000,000 27,990,000,000 INR To hedge the economic exposure on future dollar linked sales

4 Cross Currency Interest Rate Swap

1,000,000,000 1,000,000,000 INR To hedge the economic exposure on future dollar linked sales

5 Forward sale contracts (USD / INR)

255,000,000 300,781,870 USD To hedge the exchange risk on export receivables


156,828,618 27,122,759 USD To hedge the exchange risk on BC Payables



Sr.No.

Type of Transaction Amount as at31st March, 2015

Amount as at31st March, 2014

Currency Purpose


33,947,020 - USD To hedge the exchange risk on Letter of Credit / Acceptance


11,730,000 - USD To hedge the exchange risk on Sundry Creditors

9 Forward purchase contracts (EURO/INR)

- 5,107,812 EURO To hedge the exchange risk on export receivables

10 Cross Currency EURO/USD Forward purchase contracts

3,950,550 - EURO To hedge the exchange risk on BC Payables

11 Cross Currency EURO/USD Forward sale contracts

3,500,000 - EURO To hedge the exchange risk on export receivables

(B) Unhedged Foreign Currency Exposure*

Sr.No.

Particulars of Transaction Foreign Currency

(FC)

As at 31st March, 2015 As at 31st March, 2014Amount in

FCAmount

(` in Crore) Amount in FC

Amount (` in Crore)

1 Sundry Creditors CHF 4,789 0.03 9,839 0.07EUR 13,310,512 89.86 15,310,713 126.43GBP 13,115 0.12 50,545 0.50JPY 33,849,808 1.76 32,073,710 1.89USD 156,545,078 979.83 310,512,482 1,866.17NOK 1,251,571 0.97 1,422,934 1.42SGD 600 0.00 600 0.00AED 16,674,991 28.37 1,134,059 1.85CAD 21,343 0.10 2,996 0.02

2 Buyers Credit EUR 3,382,418 22.83 21,261,112 175.57AED 3,381,000 5.75 - -USD 20,207,407 126.48 134,070,819 805.76

3 Term Loans USD 2,130,610,851 13,335.66 2,056,949,435 12,362.224 Sundry Debtors USD 12,399,099 77.61 31,804,413 191.14

EUR 923,515 6.23 14,707,817 121.45AED 636,261 1.08 636,261 1.04

5 Advance from Customers AED 245,146 0.42 245,146 0.40EUR 63,936 0.43 - -USD 1,328,874,814 8,317.53 273,036,935 1,640.95

6 Loans & Advances and Other Current/ Non Current Assets

USD 376,447,866 2,356.22 39,542,105 237.65

7 Cash and Bank Balances USD 52,830,257 330.67 61,969,588 1.168 Letter of Credit/ Acceptances EUR 92,872 0.63 564,528 4.66

USD 12,368,687 77.42 23,028,638 138.409 Working Capital Loans USD 63,557,075 397.81 9,171,223 55.1210 Interest Accrued on Credit Facilities USD 143,364,524 897.33 109,527,670 658.26

AED 1,659 0.00 - -EUR 6,369 0.04 62,755 0.52

* The Company consistently enjoys natural hedge in the form of substantial export volume (besides ‘import price parity’ based domestic revenue) to offset USD/INR exchange fluctuation risk that may arise out of unhedged foreign currency liability exposure as stated above.



143

45 Capital Work-in-Progress (including expenditure during construction period) (` in Crore)


Plant & Machinery and Building including supervision, technical know-how, other capital expenditure and Capital items in stock

2,890.15 21,947.80

Mining Rights and Exploration Expenses 30.82 30.82Preoperative Expenditure for the year(A) Employee Benefits Expense : Salaries 7.16 13.79 Contribution to Provident Fund, Gratuity and other

funds0.68 0.34

Staff Welfare Expenses 1.54 2.489.39 16.61

(B) Manufacturing and Asset Maintenance : Repairs & Maintenance and Insurance 0.42 1.68 Stores, Spares & Consumable - 0.59

0.42 2.27(C) Administrative Expenses : Traveling, Conveyance Expenses, Vehicle Hire and

maintenance charges1.06 1.59

Postage Telephone and Fax 1.08 0.06 Professional Fees 4.32 5.76 Rates and Taxes - 0.01 Depreciation 2.56 1.66 Operating Lease Rent - 0.44 Supervision Charges & Survey Expenses - 0.41 Miscellaneous Expenses - 10.28

9.01 20.21(D) Finance Costs : Bank Charges (including LC Charges, Management

and Processing Fees)30.73 27.75

Interest on Term Loan 804.56 640.34 Interest to Bank & others 84.15 41.49

919.44 709.58(E) Foreign Exchange Fluctuation (AS-11 notification) 227.74 542.49(F) Interest on Deposits with Banks & others (3.74) (2.17)(G) Net expenses on Trial Run for the Year (Refer Note 45

(a) given below)1,490.21 1,404.01

Preoperative Expenditure during the Year 2,652.47 2,693.01Add: Opening Preoperative Expenditure 5,316.15 2,649.52Less: Allocated/transferred/capitalised during the Year (6,307.25) (26.38)Closing Preoperative Expenditure 1,661.37 5,316.15Total Capital Work-in-Progress 4,582.34 27,294.77



45(a) Net expenses on Trial Run (` in Crore)



IncomeRevenue from Operations 2,322.59 2,098.54Less: Excise Duty Paid 228.71 177.52Revenue 2,093.88 1,921.02Other Income 2.23 17.02Total Income 2,096.11 1,938.04ExpensesCost of Materials Consumed 2,570.99 2,359.34Energy Cost 525.22 560.87Changes in Inventories of Finished Goods and Work in Progress

(40.56) 37.55

Employee Benefits Expense 160.01 105.94Manufacturing & Asset Maintenance 157.72 123.01Administrative Expenses 160.26 133.75Selling & Distribution Expenses 52.69 21.59

3,586.32 3,342.05Net expenses on Trial Run for the Year -Transfer to Capital Work in Progress

(1,490.21) (1,404.01)

46 The Company has circulated confirmation for the identification of suppliers registered under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the confirmations received by the Company from certain parties, no disclosures relating to amounts as at the year end together with interest paid / payable is required to be given.

47 The excess amount of current liabilities over current assets includes short term borrowings and current maturity of long term debt (repayable within one year). The Company is actively pursuing efforts to improve the net working capital through realization of funds of ` 11,200 Crore from monetization of identified assets.

48 Short Term Provisions Provision for Indirect Tax Matter: In respect of SEZ matter, the Company had paid custom duty (Basic duty, countervailing duty and cess) ` 180.73

Crore towards clearance made for the period 27th October, 2006 to 11th April, 2007 against Show Cause Notice (SCN) dated 7th April, 2008 issued by DGCEI pending investigation. Subsequently the Company availed CENVAT credit of ` 140.35 Crore towards countervailing duty and cess out of the said deposit paid based on a legal opinion received. A provision has been made for ` 19.73 Crore being non cenvatable portion of Custom duty paid for the period 11th January, 2007 to 20th March, 2007.

Further, the Company received a show-cause notice from the Commissioner of Central Excise and Customs for availing such credit and the Company submitted its response against the said notice received. The Company also filed a special civil application before the Honorable High Court of Gujarat seeking to quash the restriction on utilization of CENVAT Credit. The Honorable High Court granted interim stay on 11th February, 2009 on the restriction to avail the CENVAT. The Company was also advised by counsels that there is no restriction to utilize the disputed credit in wake of the High Court Order; and accordingly the Company utilized ` 124.54 Crore for discharging the excise duty liability till 31st March, 2009.

The Supreme Court vide order dated 15th April, 2009 ordered to maintain the status as on date and accordingly the balance of ` 15.81 Crore, remaining to be utilized as on the date of order has been kept un-utilized. Further vide order dated 7th March, 2011 the Supreme Court referred the matter back to Commissioner of Central Excise & Customs to take a final decision in the matter within four months with continuation of Interim Order dated 15th April, 2009.

As per the directions of the Hon’ble Supreme Court order dated 7th March, 2011, the Commissioner of Central Excise Surat –I passed an adjudication order dated 28th June, 2011 demanding the reversal of the CENVAT Credit availed along with applicable interest and imposed penalty of ` 25 lacs on the Company. The Company has preferred an appeal with Stay application to the CESTAT against the order issued. CESTAT heard the appeal and remanded the matter to Commissioner, with a direction that the notice to be adjudicated along with the main notice dated 7 April, 2008 (which relates to duty demand and deposits made by the company). As per directions of CESTAT ` 15.81 Crore



145

to be kept as balance in Cenvat credit account. Since the normal adjudication process have resumed; the Hon’ble Supreme Court disposed the Department petition as infructuous vide its order dated 8th July, 2011.

49 The Company has invested ` 569.39 Crore in the equity shares of Essar Steel Offshore Limited, Mauritius (ESOL), a wholly owned subsidiary of the Company and has also given advance against equity of ` 83.79 Crore, as at 31st March, 2015. In addition, the Company along with Essar Minerals Ltd. and Essar Minerals Cooperatief U. A. has given a guarantee of upto USD 586.35 million (outstanding loan amount against the guarantee in the books of ESOL as on 31st March, 2015 is USD 413 Million) for a loan taken by ESOL for the acquisition of Trinity Parent Corporation, USA (“Trinity”). Trinity (through its various subsidiaries) is engaged in the extraction of steam and metallurgical coal.

The steam coal operations have been facing challenges due to availability of cheap natural gas as alternate source and increase in various environmental restrictions. However, considering the coking coal reserves available and business valuation of Trinity by a third party based on future cash flow projections of Trinity business, no provision has been made for diminution in the value of investment made by the Company in ESOL.

50 The Company has issued notice to M/s Bhander Power Ltd. (BPOL) an associate of the Company, as regards frustration of the Purchase Power Agreement (PPA) entered between the companies citing non availability of fuel at affordable price and stop paying Fixed Charges as per the PPA w.e.f. 01.10.2014. BPOL has challenged this arbitrary termination of PPA and has initiated resolution of dispute mechanism as per terms of PPA and has simultaneously stopped accruing revenue in their financial statement, pending final outcome, in line with AS-9 Revenue Recognition while retaining its right to charge from the Company at future date.

Considering ongoing high gas prices and unavailability of gas, the Board of Directors of the BPOL, have approved repowering of steam turbines by adding coal fired boiler and back pressure turbine. The management of BPOL will take the necessary steps to implement this plan. BPOL has applied for Environment Clearance to state pollution control board for coal conversion project and is currently in the process of doing Environment Impact Assessment, as a part of Environment Clearance process. BPOL proposes to do financial tie up based on progress on necessary permits and approvals for implementation of the project. Additionally BPOL has been assured support from its holding company Essar Power Limited in order to meet its debt and other obligations and is also contemplating sale of its investment in order to meet its obligation.

As explained above regarding non-recognition of revenue in BPOL & mitigation plan, the BPOL is of the view, no impairment provision is required in carrying value of its assets.

51 Long Term Borrowings (` in Crore)

As at31st March,

2015

As at31st March,

2014(1) Non Convertible Debentures Secured by pari passu first charge on movable fixed assets and mortgage

of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land). 16.5% Non-Convertible Debentures redeemable on annual basis starting from June 16 (15.87% ), June 17 (42.07% ), June 18 (42.07%).

312.00 320.00

312.00 320.00(2) Term Loans From Banks and Others Secured by pari passu first charge on movable fixed assets and mortgage

of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The balance loan is repayable in quarterly installments during Financial Year 2015-16 (24.10%), 2016-17 (32.97%) and 2017-18 (42.93%)

4,909.99 10,538.19

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The Balance Loan will be converted to Rupee Loan during Financial year 2016-17 (90%) and Financial year 2017-18 (10%).

533.71 512.47

(` in Crore)



As at31st March,

2015

As at31st March,

2014 Secured by pari passu first charge on fixed assets (except assets forming

part of Nandniketan Township, Service Centers and 19 MW waste heat recovery power plant) and pari passu second charge on current assets of the Company. The balance loan is repayable in equal quarterly installments of 10% till July 2016.

30.44 114.57

First pari passu charge on all present and future fixed assets of the Borrower including all land available with the borrower (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company. The balance loan is repayable 10 half yearly installments of 5%, 5%,7.5%,7.5%,12.5%, 12.5% 12.5%12.5%, 12.5% &12.5% starting from Jan 2020

469.43 -

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company.

a) The balance loan is repayable in half yearly installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (10.53%), 2019-20 (14.74%),2020-21 (14.74%), 2021-22 (16.84%) and 2022-23 (16.84%).

124.87 126.21

b) The balance loan is repayable in 13 half-yearly installments of 2.50%, 2.50%, 2.50%, 2.50%, 5%, 5%, 10%, 10%, 10%, 12.50%, 12.50%, 12.50% and 12.50% starting December 2015.

375.54 360.60

(c) The balance loan is repayable in annual installments during Financial Year 2015-16 (10.00%), 2016-17 (10.00%), 2017-18 (10.00%), 2018-19 (14.00%), 2019-20 (14.00%), 2020-21 (14.00%), 2021-22 (14.00%), 2022-23 (14.00%).

31.30 30.05

(d) The balance loan is repayable in annual installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%), 2022-23 (14.74%).

237.85 240.40

(e) The balance loan is repayable 10 half yearly installments of 5%, 5%, 7.5%, 7.5%, 12.5%, 12.5%, 12.5%, 12.5%, 12.5% and 12.5% starting March 2018.

1,001.45 961.60

(f) The balance loan is repayable in annual installments during Financial Year 2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%), 2022-23 (14.74%).

743.27 751.25

g) The balance loan is repayable 10 half yearly installments of 5%, 5%, 7.5%, 7.5%, 12.5%, 12.5%, 12.5%, 12.5%, 12.5%, and 12.5% starting September 2018

143.96 138.23

h) The balance loan is repayable in annual installments during Financial Year 2015-16 (10.00%), 2016-17 (10.00%), 2017-18 (10.00%), 2018-19 (14.00%), 2019-20 (14.00%), 2020-21 (14.00%), 2021-22 (14.00%), 2022-23 (14.00%).

93.89 90.15

i) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting July 15

137.70 132.22

j) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting Sept 15

250.36 240.40

k) The balance loan is repayable in 9 annual installments of 5%, 5%, 10%, 10%, 14%, 14%, 14%, 14%, and 14% starting Nov’15

87.63 84.14

(l) The balance loan is repayable in 20 Quarterly installments during Financial Year 2015-16 (17.24%), 2016-17 (13.79%), 2017-18 (13.79%), 2018-19 (27.59%), 2019-20 (27.59%).

522.57 553.68

(m) The balance loan is repayable in quarterly installments during Financial Year 2015-16 (17.24%), 2016-17 (13.79%), 2017-18 (13.79%), 2018-19 (27.59%), 2019-20 (27.59%).

267.11 283.01

(` in Crore)



147

As at31st March,

2015

As at31st March,

2014

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders.a) The balance loan is repayable in yearly installments during Financial Year

2015-16 (5.26%), 2016-17 (10.53%), 2017-18 (10.53%), 2018-19 (14.74%), 2019-20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%) and 2022-23 (14.74%).

535.15 540.90

b) The balance loan is repayable in annual installments during Financial Year 2015-16 (3.09%), 2016-17 (4.12%), 2017-18 (6.19%), 2018-19 (10.31%), 2019-20 (17.53%), 2020-21 (17.53%), 2021-22 (20.62%) and 2022-23 (20.62%).

303.57 300.50

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. Balance Loan will be repaid in 11 Quarterly Installment during financial year 2015-16 (44.58%), 2016-17 (55.42%)

1,502.02 1,995.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Mauritius Limited and personal guarantee of a promoter. Loan will be repaid in Quarterly Installments during financial year 2015-16 (2.20%), 2016-17(4.40%), 2017-18(4.40%), 2018-19(11.00%), 2019-20(20.81%), 2020-21(20.98%), 2021-22(20.73%), 2022-23 (15.48%) till September 2022.

2,955.00 3,085.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Limited and personal guarantee of a promoter. Balance Loan will be repaid in Quarterly Installments during financial year 2016-17 (2.53%), 2017-18 ( 5.07%), 2018-19 (15.20%), 2019-20 (15.20%), 2020-21 (15.08%), 2021-22 (14.95%), 2022-23 (14.95%), 2023-24 (17.02%) starting from December 2016.

5,337.41 4,801.55

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held in the company by its shareholders, Corporate Guarantee of Essar Steel Asia Holding Limited & Essar Steel Limited and personal guarantee of a promoter. Balance Loan will be repaid in Quarterly Installments during financial year 2016-17 (2.50%), 2017-18 (5.00%), 2018-19 (15.00%), 2019-20 (15.00%), 2020-21 (15.00%), 2021-22 (15.00%), 2022-23 (15.00%), 2023-24 (17.50%) starting from December 2016.

154.84 -

Secured by subservient charge on moveable fixed assets and current assets.The loan will be repaid during Financial Year 2015-16.

12.75 700.00

Secured by subservient charge on all moveable fixed assets & current assets of the company, Corporate Guarantee of Essar Steel Limited and pledge of certain shares held in the company by its shareholders. Balance Loan is repayable in eight equal quarterly installment of 13.21% starting from August 2016 to February 2018 and 7.5% in May’2018

175.00 175.00

(` in Crore)



As at31st March,

2015

As at31st March,

2014

Secured by Pledge of Shares held in EPOL & BPOL held as investments by the company, subservient charge on all moveable fixed assets & current assets of the company, Corporate Guarantee of Essar Steel Limited, Essar Steel Asia Holding Limited & Essar Steel Mauritius Limited and pledge of certain shares held in the company by its shareholders. Loan is repayable in equal monthly Installments till Sept’16.

125.04 165.00

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land), second pari passu charge on the current assets of the Company and pledge over certain shares held by pledge providers in ESIL, Corporate Guarantee of Essar Steel Asia Holding limited & Essar Steel Mauritius Limited. The balance loan is repayable in 12 half yearly installments of 5%, 5%, 7.5%, 7.5%, 7.5%, 7.5%, 7.5%, 7.5%, 10%, 10%, 12.5% and 12.5% starting September 2016.

704.15 676.12

Secured by subservient charge on its fixed movable and current assets of the Company. The loan will be repaid during financial year 2015-16

100.00 100.00

Secured by subservient charge on its fixed movable and current assets of the Company. Loan will be repaid in 4 equal quarterly installments Starting from June 2015

63.00 -

Secured by subservient charge on its movable fixed assets and current assets of the company located at Hazira. The loan is repayable during January 2016

175.00 -

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company. The loan was completely repaid during financial year 2014-15

- 19.16

Secured by pari passu first charge on fixed assets (other than any immovable properties forming part of the Nandniketan Township, Service Centres and the Power Plant) of the Company. The loan was completely repaid during financial year 2014-15

- 47.22

Secured by pari passu first charge on all fixed assets and pari passu second charge on all current assets of the Company. The loan was completely repaid during financial year 2014-15

- 5.49

One of the Subsidiaries has taken loan for Construction of Service Center which is secured by Pledge of plant & machinery and other movable assets related to project, mortgage over the factory building and corporate guarantee issued by the company

6.26 21.03

Secured by unconditional and irrevocable standby letter of credit of USD 209 Mio. organised by the company against which one of the subsidiaries has taken loan from Bank and margin deposits of the said subsidiary

900.81 985.16

(` in Crore)



149

As at31st March,

2015

As at31st March,

2014

One of the Subsidiaries has taken loan which is secured by :(a) Assignment of Contracts by way of security by the said subsidiary which will

assign its rights and interest in: (i) The Advance Payment Guarantee (ii) The Advance Payment and Supply Agreement (iii) The Trade bank Mandate(b) Charge over the Collection Account(c) Charge over the DSRA account

156.48 -

One of the Subsidiaries has taken loan for purpose of funding working capital requirement and the same is secured by unconditional and irrevocable stand-by letter of credit in USD currency amounting to 102% of the facility amount

23.60 -

Secured by pledge of shares of Essar Offshore Limited and chain of share holding in step down subsidiary companies, Essar Minerals Limited, Essar Minerals Canada Limited, Essar Minerals Inc and Membership rights of Essar Mineral Cooperatief UA

2,585.00 2,482.12

Secured by First lien on Financed Mining Equipments purchased by one of its Subsidiary, New Trinity Holding LLC

64.82 60.16

25,840.94 31,316.57

(3) Buyers Credit Capital Expenditure

Secured by pari passu first charge on movable fixed assets and mortgage of immovable properties of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and second pari passu charge on the current assets of the Company. The facility shall be converted into long term loans on maturity.

51.12 503.11

51.12 503.11

(4) Dollar Notes / Rupee Notes

Rupee Notes is repayable up to 31st March, 2018 Dollar Notes is repayable on 31st March, 2018.

226.32 226.30

(5) Payment of the Deferred Sales Tax Benefit shall be made during financial year 2016-17 ( 5.17%), 2017-18 ( 10.36%), 2018-19 ( 15.85%), 2019-20 ( 20.00%), 2020-21 ( 20.00%), 2021-22 (14.83%), 2022-23 ( 9.64%), 2023-24 ( 9.15%)for each year’s collection (i.e. collection from 2005-06 to 2008-09) starting from April, 2016.

33.32 33.88

Short Term Borrowing Notes

(1) Short Term Loans

From Banks

Secured by subservient charge on all fixed assets of the company. The Loan will be repaid in March 2016

100.00 -

100.00 -

(2) Working Capital Loans - From Banks

Working Capital Loans are secured by pari passu first charge on the current assets of the Company, second charge on fixed assets of the Company (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and Corporate Guarantee of Essar Investments Limited.

2,026.02 377.69

2,026.02 377.69

(` in Crore)



As at31st March,

2015

As at31st March,

2014

(3) Buyers’ credit for Operational Expenditure

Secured by margin deposits with the banks & secured by first charge on the current assets, second charge on the fixed assets (except leasehold rights on the Visakhapatnam Port Trust land and Orissa ISP land) and Corporate Guarantee of Essar Investments Limited.

1,084.16 683.40

1,084.16 683.40

52 The figures of the previous year has been regrouped, where necessary, to conform to current year’s classification.





(` in Crore)

ESSAR STEEL INDIA LIMITEDRegistered Office: 27th KM, Surat Hazira Road,Hazira, Dist. Surat, Pin-394270, Gujarat

Tel. : 0261-668 2400 Fax : 0261-668 5731 email : [email protected] CIN: U27100GJ1976FLC013787

FORM MGT 11 Proxy Form

[Pursuant to Section 105 (6) of the Companies Act, 2013 andRule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the Member(s)

Registered Address

Email ID

Folio No. / DP ID No. & Client ID

I/We, being the Member(s), holding.................... Shares of the above named Company, hereby appoint.

1. Name.............................................................................................Address..............................................................................

..................................................................................................................................................................................................

Email id……………………………………………………..............…Signature…………………...................…............…………..

or failing him

2. Name.............................................................................................Address...............................................................................

..................................................................................................................................................................................................

Email id……………………………………………..............…………Signature…………………...................….....………….........

or failing him

3. Name.............................................................................................Address..............................................................................

..................................................................................................................................................................................................

Email id…………………………………………..............……………Signature…………………...................….....….......………..

ESSAR STEEL INDIA LIMITEDRegistered Office: 27th KM, Surat Hazira Road,Hazira, Dist. Surat, Pin-394270, Gujarat

CIN: U27100GJ1976FLC013787Attendance Slip

Member’s Folio No. : __________________

and/or

DP ID No./Client ID No.* : __________________

39th Annual General MeetingTime : 2:00 p.m.Date : Tuesday, September 29, 2015Vanue : Utsav Community Hall, Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-3942705

Member

Proxy

[NAME IN CAPITAL LETTERS]

[NAME IN CAPITAL LETTERS]

I hereby record my presence at the 39th AGM of the Company

Signature of Member/Proxy

NOTE:1. Admission restricted to Members/Proxies only.2. Shareholder / Proxy holder wishing to attend the

Meeting must bring this Attendance Slip to the meeting and hand it over at the entrance

* Applicable for Investors holding share(s) in electronic form.Please cut here and bring the above attendance slip to the meeting

STEEL

STEEL

Tuesday, September 29, 2015 at 2:00 p.m. at the Registered Office of the Company, Utsav Community Hall, Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-394270 and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution Number Resolution Type of

ResolutionOptional*

For Against1 To receive, consider and adopt -

(a) the Audited Financial Statements of the Company as at March 31, 2015(b) the Audited Consolidated Financial Statements of the Company for the

financial year ended March 31, 2015together with the Report of Board of Directors and the Auditors thereon.

Ordinary

2. To appoint a Director in the place of Shri P S Ruia (DIN 01187548) who retires by rotation and being eligible, offers himself for reappointment. Ordinary

3. To appoint a Director in the place of Shri Rana Som (DIN 00352904) who retires by rotation and being eligible, offers himself for reappointment. Ordinary

4. To ratify the appointment of Statutory Auditors of the Company and to fix their remuneration and in this regard to consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution.

Ordinary

5. Appointment of Smt Gayathri Sukumar (DIN 07115908) as Director. Ordinary6. Issue of Equity Shares on Preferential basis to promoters upto `1500 Crore Special7. Ratification of remuneration of the Cost Auditors for the financial year ending

March 31, 2016 Ordinary

8. Renewal of enabling resolution for conversion of loan into equity in case of default in repayment of loan Special

9. Power to make donation to bona fide charitable and other funds Special

Signed this …………………………… day of ……………………… 2015.

Signature of the Member ……………………………………………………

Signature of the Proxy Holder ……………………………………………...

Notes:1. * This is only optional. Please put ‘X’ in the Box in the appropriate column against the respective resolution. If you leave the ‘For’ or

‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.2. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than

48 hours before the commencement of the Meeting

Affix Re. 1 Revenue

Stamp

ESSAR STEEL INDIA LIMITED39th Annual General Meeting Venue - Route Map

Utsav Community Hall, Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-394270

Surat RailwayStation