Essar Ports Limited ("the Company") is a public limited company domiciled in India and incorporated under the Companies Act, 1956. The Company is engaged in business of providing fleet operating and chartering services. The Company is listed on BSE Limited and the National Stock Exchange of India Limited (NSE). The Company through its subsidiaries develops and operates ports and terminals for handling liquid, dry bulk, break bulk and general cargo, with an existing aggregate capacity of 120 MTPA across facilities located at Vadinar and Hazira in the State of Gujarat on the west coast of India, Paradip in the State of Odisha and Visakhapatnam in the State of Andhra Pradesh on the east coast of India. The facilities at Vadinar, Hazira, Paradip and Visakhapatnam are used primarily by affiliated customers for the receipt of raw materials such as crude oil, iron ore / pellets, limestone, dolomite and coal and for the dispatch of finished goods such as petroleum products and steel products. The Company through its subsidiaries is in the process of increasing its aggregate ports capacity to 194 MTPA with expansion projects at Hazira, a new port at Salaya in Gujarat, one terminal at Paradip and one iron ore berth at Visakhapatnam. The ports expansion projects have been undertaken, in part, to accommodate the increase in traffic expected to arise from plant expansions planned to be carried out by the Company's affiliated customers, and in part to support the increase in business from non-affiliated customers.

2. SHARE CAPITAL

(a) Terms of / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each share holder of equity share is eligible to one vote per share held. In the event of liquidation, the holder of equity share is entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

(b) Stock options :

In the annual general meeting held on September 9, 2011, the shareholders have approved the issue of upto 1% options under the "Essar Ports Employee Stock Options Scheme 2011" to be issued in one or more tranches.

Out of above, 740,334 and 1,292,746 options (convertible into equivalent number of equity shares of Rs. 10/- each of the Company, in three equal installments i.e. at the end of 3rd / 4th / 5th years from the grant date have been granted to the eligible employees and executive directors of the Company pursuant to Essar Ports Employee Stock Option Scheme 2011 on 28 November 2011 and 22 January 2014 respectively. The exercise period for the options is 7 years from the date of vesting.

These stock options have been granted at an option value of Rs. 71.10 and Rs. 57.75 respectively per equity share of the face value of Rs. 10/- each (i.e. the closing price of the equity shares of the Company on 1 December 2011 and 21 January 2014 at the National Stock Exchange of India Limited, being the exchange having the higher quantity of trading of Company's shares). Out of above, 2,033,080 options were outstanding as on 31 March 2015.

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

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

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

Total                                      264,686.00        207,686.00

4. COMMITMENTS

As per the borrowing agreements of subsidiaries with banks and financial institutions, the Company has commitment to invest Rs. 20,970.08/- lakhs (previous year Rs. 12,108.94/- lakhs) into the projects of subsidiaries. Under the agreements with lenders, the Company has committed not to dilute its investments in any of the port and terminal project developed by its subsidiaries below 51% till maturity of the loan.

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

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

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

7. Dues to micro, small and medium enterprises

The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 and hence disclosure relating to amount unpaid at the year end together with interest paid / payable under this Act have not been given.

8. EMPLOYEE BENEFITS :

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

II. Defined benefit plans

a. Provident fund

b. Gratuity

c. Compensated absences (CA)

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

9. Actuarial assumptions

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

ii) Leave policy:

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

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

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

iv) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

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

vi) The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method.

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

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

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

10. RELATED PARTY RELATIONSHIPS, TRANSACTIONS AND BALANCES

a) Holding companies :

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

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

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

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

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

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

b) Subsidiaries:

i) Essar Bulk Terminal Limited

ii) Vadinar Oil Terminal Limited

iii) Vadinar Ports & Terminals Limited

iv) Essar Bulk Terminal (Salaya) Limited

v) Essar Bulk Terminal Paradip Limited

vi) Essar Paradip Terminals Limited

vii) Essar Dredging Limited

viii) Essar Vizag Terminals Limited

ix) Petro Tankages India Limited

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

c) Key management personnel :

(i) Rajiv Agarwal, CEO & Managing Director

(ii) Kamala Kant Sinha, CEO

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

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

d) Fellow subsidiaries where there have been transactions:

(i) Aegis Limited

(ii) Essar Africa Holdings Limited

(iii) Essar Logistics Limited

(iv) Essar Shipping Limited

(v) Essar Oil Limited

(vi) Essar Power Gujarat Limited

(vii) Essar Offshore Subsea Limited

(viii) Equinox Business Parks Private Limited

(ix) New Coal Terminal Beira, S.A

11. GOING CONCERN

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

12. EMPLOYEE STOCK OPTION SCHEME

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

13. During the year 2013-14, the Company has sold 100,000,000, 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal (Salaya) Limited and 17,200,000, 0.01% optionally convertible redeemable cumulative preference share of Rs. 10/- each of Essar Bulk Terminal Limited for a consideration of Rs. 30,134.40 lakhs and recognised gain of Rs. 149.33 lakhs in Statement of profit and loss.

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