1) Composite Scheme of arrangements
 
 The Hon''ble High Court of Gujarat at Ahmedabad vide order dated March
 1, 2011 approved the Composite Scheme of Arrangement (Scheme) between
 Essar Shipping Ports & Logistics Limited (ESPLL), Essar Ports &
 Terminals Limited (EPTL), Essar international Limited (EIL) and Essar
 Shipping Limited (ESL).
 
 The Scheme contemplates the merger of EPTL and EIL both 100%
 subsidiaries of ESPLL and incorporated in Mauritius, (the amalgamating
 companies) with ESPLL and the consequent demerger of the Shipping &
 Logistics Business and the Oilfields Services Business into ESL.
 
 Pursuant to the Scheme, all the assets (comprising of investments,
 sundry debtors, loans and advances and cash and bank balances
 aggregating to 7 3,371.92 crores) and liabilities (comprising of
 current liabilities of 7 47.19 crores) of EPTL (which is engaged in the
 ports and terminals business through its subsidiaries) and EIL (which
 is engaged in the business of ship owners, ship charterers, ship
 managers and also provides all types of logistics services and other
 incidental businesses) stood transferred to and became vested in ESPLL
 with effect from September 30, 2010 being the Amalgamation Appointed
 Date, based on the financial statements of the amalgamating companies.
 
 The amalgamation was accounted as per the pooling of interest method as
 set out in Accounting Standard (AS) 14 accounting for amalgamation
 referred to in Section 211(3C) of the Act. Accordingly all the assets,
 liabilities and retained earnings in the books of the amalgamating
 companies were recorded in the books of ESPLL at the respective book
 values thereof and in the same form as appearing in the books of the
 amalgamating companies at the Amalgamation Appointed Date. The excess
 of the value of the assets over the value of the liabilities and the
 retained earnings of the amalgamating companies after taking into
 consideration the cancellation of the value of investments in the
 amalgamating companies appearing in the books of the Company; and the
 cancellation of inter-company balances between ESPLL and amalgamating
 companies were recorded as credit to the Capital Reserve Account in the
 books of ESPLL.
 
 Further, pursuant to the Scheme
 
 (a) All the assets (comprising of fixed assets, investments, sundry
 debtors, loans and advances and cash and bank balances aggregating to Rs.
 8,556.52 crores) and liabilities (comprising of borrowings, current
 liabilities aggregating to Rs. 3,459.83 crores) pertaining to the
 shipping & logistics and oilfields drilling business stood transferred
 to and vested in ESL at the book values (ignoring revaluation)
 appearing in the books of account of Company, based on the financial
 statements of the Company on the day immediately preceding the Demerger
 Appointed Date being October 1, 2010.
 
 (b) Non Convertible Debentures aggregating to Rs. 700 crores and FCCB
 aggregating to USD 240 Million (out of FCCB of USD 280 Million raised
 by ESPLL) stood transferred to ESL.
 
 (c) The difference between the value of assets and liabilities
 transferred pursuant to the scheme was first apportioned against paid
 up value of capital cancelled of Rs. 205.23 crores and the balance
 against the following reserves of the Company, namely Capital
 Redemption Reserve; Debenture Redemption Reserve; Securities Premium;
 Capital Reserve and General Reserve.
 
 (d) The Authorised Share Capital of the Company stood reduced to Rs.
 1,010.50 crores from Rs. 1,510.50 crores prior to the Scheme. The Issued,
 Subscribed and Paid Up Share Capital also stood reduced to 7 410.59
 crores divided into 41,04,55,552 equity shares of Rs. 10/- each (includes
 Rs. 0.13 crores towards forfeited shares) from Rs. 615.81 crores prior to
 the Scheme.
 
 Upon the Scheme becoming effective, EIL, EPTL and ESL ceased to be
 subsidiaries of ESPLL.
 
 On May 21, 2011, 41,04,55,552 fully paid up equity shares of Rs. 10/-
 each were allotted to the eligible members of ESPLL in terms of the
 Scheme.
 
 The reduced shares were listed on the Bombay Stock Exchange and the
 National Stock Exchange on May 31,2011.
 
 As part of the Scheme, the name of the Company has been changed to
 Essar Ports Limited with effect from May 13,2011.
 
 2) Fixed assets
 
 (Note no. B (2) of schedule 13 of annual accounts)
 
 (a) Pursuant to notification issued by the Central Government under
 Companies (Accounting Standards) Amendment Rules, 2009 dated 31st
 March, 2009; the Company has chosen an option with effect from 1st
 April, 2007 to adjust the gains/losses arising on conversion/
 translation/settlement of long term foreign currency items into the
 corresponding costs of fixed assets to the extent it is related to
 acquisition of depreciable fixed assets and the balance gains / losses
 has been accumulated in Foreign Currency Monetary Item Translation
 Difference Account (FCMITDA).
 
 During the period, exchange difference gain on long term foreign
 currency items relating to fixed assets amounting to Rs. 7.18 (previous
 year Rs. 183.14) crore has been adjusted in costs of corresponding fixed
 assets. The compounding effect of this treatment has resulted into
 decrease in the profit for the period by an amount of Rs. 6.97 (previous
 year Rs. 170.82) crore.
 
 (b) The Company has revalued its fleet on 1st April, 2004 and on 31st
 March, 2008. The valuation was done by accredited valuers on the basis
 of expected market value in an arm''s length transactions and free of
 encumbrances on the valuation date. The net difference between book
 value and revalued value on 1st April, 2004 amounting to * 669.52 crore
 and on 31st March, 2010 amounting to * 491.31 crore (including f 38.62
 crore exchange difference, net of depreciation relating to previous
 year) had been added to the book value of the fleet and corresponding
 credit was given to the Fixed Assets Revaluation Reserve. Gross block
 as on 31st March 2011 includes Rs. 1.05 (previous year 7 435.67) crore
 being amount added on revaluation of fleet. Out of the depreciation for
 the year, a sum of Rs. 19.25 (previous year Rs. 38.28) crore relating to
 depreciation, to the extent it is charged on the increased value has
 been recouped from Fixed assets revaluation reserve and the balance of
 t 59.87(previous year f 119.51) crore has been debited to the Statement
 of Profit and Loss.
 
 (c) Gross block of plant and machinery includes Rs. nil (previous year Rs.
 38.84) crore leased out; Written down value as on 31st March 2011 is *
 nil (previous year Rs. nil).