Essar Steel India Limited
BOARD OF DIRECTORS
Shri Prashant Ruia
Shri Jatinder Mehra
Shri V. G. Raghavan
Shri Arvind Pande
Shri Parveen Kumar Malhotra
Shri Sunit V Joshi
Shri Hiranmoy Biswas
Smt Gayathri Sukumar
Shri Dilip C. Oommen
Shri Mahadev Iyer
Shri Rajiv Kumar Bhatnagar
Shri Aloke Sengupta
CHIEF FINANCIAL OFFICER
Shri Suresh Jain (w.e.f. 01-07-2017)
COMPANY SECRETARY
Shri Pankaj S Chourasia
REGISTERED OFFICE
27th KM, Surat Hazira Road,
Hazira, Dist. Surat,
Pin - 394270, Gujarat.
Tel. : 0261-668 2400
Fax : 0261-668 5731
email : estlinvestors@essar.com
CIN : U27100GJ1976FLC013787
CORPORATE OFFICE
Essar House,
11 Keshavrao Khadye Marg,
Mahalaxmi, Mumbai - 400 034.
Tel. : 022-66601100
Fax : 022-23532695
CONTENTS
Notice
Board’s Report
Auditors’ Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Notes to Financial Statements
Consolidated Financial Statements
Report of Resolution Professional
Proxy Form
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
BANKERS
Director Allahabad Bank
Axis Bank Ltd.
Director (upto 20-06-2017)
Bank of Baroda
Independent Director
Bank of India
Independent Director
Canara Bank
Director Central Bank of India
Nominee Director (SBI) Corporation Bank
Nominee Director (IDBI Bank) Export Import Bank of India
(upto 27-11-2016) HDFC Bank Ltd.
Director (upto 21-08-2017) ICICI Bank Ltd.
Managing Director & Dy. CEO IDBI Bank Ltd.
Director (Finance) & CFO Punjab National Bank
(upto 30-06-2017) State Bank of India
Director (Projects) Syndicate Bank
Nominee Director (IDBI Bank) The Jammu & Kashmir Bank Ltd.
(28-11-2016 to 27-07-2017) The Lakshmi Vilas Bank Ltd.
UCO Bank
Union Bank of India
AUDITORS
M/s. 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 Limited
19, Pycrofts Garden Road, Off Haddows Road,
Nungambakkam, Chennai - 600 006.
Tel. : (044) 2821 3738, 2821 4487
Fax : (044) 2821 4636
E-mail : essar.steel@dsrc-cid.in
Visit us at our website
http://www.essarsteel.com
02
09
42
48
49
51
53
121
201
205
1 1
 Essar Steel India Limited
NOTICE TO SHAREHOLDERS
NOTICE is hereby given that the Forty First Annual General
Meeting of the Members of Essar Steel India Limited (CIN:
U27100GJ1976FLC013787), a company under Corporate
Insolvency Resolution Process of the Insolvency and Bankruptcy
Code, 2016, will be held at Utsav Community Hall, Nandniketan
Township, Hazira, Dist.: Surat, Gujarat, Pin - 394270 on Wednesday,
December 27, 2017, at 2:00 pm to transact, the following business:
BACKGROUND:
The members are hereby informed that pursuant to the order
dated August 02, 2017 of the Hon’ble National Company Law
Tribunal - Ahmedabad Bench, at Ahmedabad (“NCLT Order”),
Corporate Insolvency Resolution Process (“CIR Process”) has been
initiated for the Company in accordance with the provisions of the
Insolvency and Bankruptcy Code, 2016 (“Code”) and the related
rules and regulations issued thereunder with effect from August
02, 2017 (CIRP Commencement Date). Mr. Satish Kumar Gupta
was appointed as Interim Resolution Professional in terms of the
NCLT Order and subsequently he was appointed as Resolution
Professional by the Committee of Creditors in its meeting held on
September 01, 2017 as per the provisions of the Code (“Resolution
Professional”).
Members are further informed that pursuant to Section 17 of the
Code, during the continuation of CIR Process the powers of the
Board of Directors of the Company (“Board of Directors”) stand
suspended effective from the CIRP Commencement Date and the
powers of the Board of Directors and the management of affairs of
the Company being vested in the Resolution Professional, viz., Mr.
Satish Kumar Gupta. In view thereof, this Meeting is being called
and convened by the Resolution Professional.
ORDINARY BUSINESS:
1. To receive, consider and adopt:
a) the Audited Financial Statements of the Company for
the financial year ended March 31, 2017, 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, 2017,
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 re-appointment;
(His re-appointment on the Board is being part of compliance
with section 152(6) of the Companies Act, 2013. However,
the Board shall continue to remain suspended during the
continuance of CIR Process.)
3. To appoint a Director in the place of Shri Parveen Kumar
Malhotra (DIN 03494232) who retires by rotation and being
eligible, offers himself for re-appointment;
(His re-appointment on the Board is being part of compliance
with section 152(6) of the Companies Act, 2013. However,
the Board shall continue to remain suspended during the
continuance of CIR Process.)
4. To ratify the appointment of M/s. M.M. Chaturvedi & Co.,
Chartered Accountants, Mumbai having Firm Registration
No.112941W, as Statutory Auditors of the Company and to
fix their remuneration and, if thought fit pass, with or without
modification(s), the following resolution as an Ordinary
Resolution:
2 2
“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 at the existing
remuneration payable to them for the financial year ending
March 31, 2018, as was paid to the Auditors in 2017.”
SPECIAL BUSINESS:
5. To re-appoint Shri Dilip Oommen (DIN: 02285794) as
Managing Director & Dy. CEO of the Company.
To consider and if thought fit, to pass with or without
modifications, the following resolution as a Special
Resolution.
“RESOLVED THAT in accordance with the provisions of
Sections 149, 152, 196, 197 and 203 read with Schedule V (as
may be or amended from time to time) and all other applicable
provisions if any, of the Companies Act, 2013, and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, subject to approval of the Central
Government, if required, approval of the members of the
Company be and is hereby accorded to the re-appointment
of Shri Dilip Oommen as Managing Director & Dy. CEO of the
Company for a period of three years with effect from July 01,
2017, to June 30, 2020, liable to retire by rotation on terms
and conditions (including remuneration payable in the event
of loss or inadequacy of profits in any financial year during
the tenure of his appointment) as set out below, with liberty to
the Board of Directors (hereinafter referred to as “the Board”
which term shall deemed to include any Committee of the
Board constituted to exercise its powers including the powers
conferred by this resolution) to determine, alter and vary
the terms and conditions of the said re-appointment and/or
remuneration.
(a) Salary:
Basic Salary in the scale of `10 Lakh to `20 Lakh per
month, as may be determined by the Board of Directors
or Remuneration Committee or such other authority as
may be delegated by the Board of Directors from time to
time.
(b) Perquisites:
i. Provident Fund, Superannuation, Gratuity, Leave
Travel Concession, Reimbursement of Medical
Expenses – As per rules of Company.
ii. Allowances, Performance Bonus and
Reimbursements not exceeding `40 Lakh per
month, subject to overall remuneration not
exceeding `500 lakh per annum.
RESOLVED FURTHER THAT even in the absence of or
inadequacy of profits in any Financial Year, subject to the
provisions of Schedule V of the Companies Act, 2013, and
such other approvals as may be required, Shri Dilip Oommen,
be paid the same remuneration as mentioned above as
minimum remuneration for the entire tenure or such period as
may be approved by the Shareholders of the Company and/or
Central Government, if required.
41 st A N N U A L R E P ORT 2016-17

RESOLVED FURTHER THAT the Board be and is hereby
authorised to do all such acts, deeds, matters and things, as in
its absolute discretion, it may consider, necessary, expedient
or desirable in order to give effect to this resolution.”
(His re-appointment shall not affect the suspension of the
Board and the Board shall continue to remain suspended
during the continuance of CIR process. His re-appointment is
subject to the provisions of the Insolvency & Bankruptcy Code,
2016.)
6. To ratify the remuneration of the Cost Auditors for the financial
year ending 31st March, 2018.
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 Section
148(3) and all other applicable provisions of the Companies
Act, 2013 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,
2017, till March 31, 2018, in terms of the Companies Act, 2013
and Rules framed thereunder, be and is hereby ratified.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and are hereby severally authorised to do all
acts and take all such steps as may be necessary, proper or
expedient to give effect to this resolution.”
By Order of the Resolution Professional
For Essar Steel India Limited
Place : Mumbai Pankaj S Chourasia
Date: November 25, 2017 Company Secretary
Registered Office
Essar House,
27 km, Surat Hazira Road,
Dist. Surat
Gujarat-394270
Website: www.essarsteel.com
Email: pankajc1@essarsteel.co.in
Tel no. 0261-6682400, 022-66601100
Fax no. 0261-6685731
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
FORTY FIRST ANNUAL GENERAL MEETING (THE
“MEETING”) IS ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF
AND THE PROXY NEED NOT BE A MEMBER OF THE
COMPANY. THE INSTRUMENT APPOINTING THE
PROXY SHOULD, HOWEVER, BE DEPOSITED AT THE
REGISTERED OFFICE OF THE COMPANY NOT LESS THAN
FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT
OF THE MEETING.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
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. The holder
of proxy shall prove his identity at the time of attending the
Meeting.
The Register of the Members and Share Transfer Books of
the Company will remain closed from December 18, 2017 to
December 26, 2017 (both days inclusive)
2. Corporate members intending to send their authorised
representative(s) to attend the Meeting are requested to send
to the Company a certified true copy of the relevant Board
Resolution together with the specimen signature(s) of the
representative(s) authorised under the said Board Resolution
to attend and vote on their behalf at the Meeting.
3. This Notice is also being sent with Annual report along with
attendance slip, proxy form and route map of the venue of the
Meeting.
4. A Statement pursuant to Section 102(1) of the Companies
Act, 2013 (“the Act”), relating to the Special Business to be
transacted at the Meeting is annexed hereto.
5. The Company is providing facility for voting by electronic
means (e-voting) through an electronic voting system which
will include remote e-voting as prescribed by the Companies
(Management and Administration) Rules, 2014 as presently in
force and the business set out in the Notice will be transacted
through such voting. Information and instructions including
details of User ID and password relating to e-voting are
provided in the Notice under Note No. 17.
6. Shri P S Ruia, Shri Parveen Kumar Malhotra and Shri Dilip
Oommen are interested in the Ordinary/Special Resolutions
set out at Item Nos. from 2, 3 and 5 respectively, of the
Notice with regard to their appointment / re-appointment.
The relatives of such interested directors may be deemed
to be interested in the said Resolutions to the extent of their
shareholding interest, if any, in the Company. Save and except
the above, none of the Directors / Key Managerial Personnel
of the Company / their relatives are, in any way, concerned or
interested, financially or otherwise, in the Ordinary / Special
Resolutions set out under remaining items of the Notice.
However, any change in the management of the corporate
debtor during the Corporate Insolvency Resolution Process
will be subject to the approval of the Committee of Creditors
in terms of Section 28 of the Insolvency & Bankruptcy Code,
2016.
7. Members / Proxies / Authorised Representatives are requested
to bring to the Meeting necessary details of their shareholding,
attendance slip(s) and copy(ies) of their Annual Report.
8. In case of joint holders attending the Meeting, only such joint
holder who is higher in the order of names will be entitled to
vote at the Meeting.
9. Relevant documents referred to in the Notice are open for
inspection by the members at the Registered Office of the
Company on all working days (i.e., except Saturdays, Sundays
and Public Holidays) during business hours up to the date of
the Meeting. The aforesaid documents will also be available
for inspection by members at the Meeting.
10. The Company’s Registrars & Transfer Agents for its share
registry (both, physical as well as electronic) is Data
Software Research Company Private Limited (“DSRC”)
having its office at 19, Pycrofts Garden Road, Off Haddows
Road, Nungambakkam, Chennai - 600006.
3 3
 Essar Steel India Limited
11. Members holding shares in electronic mode are requested to
intimate any change in their address or bank mandates to their
Depository Participants (DPs) with whom they are maintaining
their demat accounts. Members holding shares in physical
mode are requested to advise any change in their address or
bank mandates to the Company / DSRC.
12. Members holding shares in physical mode are advised to
make nomination in respect of their shareholding in the
Company. Members holding shares in electronic mode may
contact their respective DPs for availing the nomination facility.
13. The Company has transferred the unpaid or unclaimed
dividends declared up to financial years 2007-08, from time
to time, to the Investor Education and Protection Fund (IEPF)
established by the Central Government.
14. Members who hold shares in physical mode in multiple folios
in identical names or joint holding in the same order of names
are requested to send the share certificates to DSRC, for
consolidation into a single folio.
15. Members who have not registered/updated their e-mail
addresses with DSRC, if shares are held in physical
mode or with their DPs, if shares are held in electronic
mode, are requested to do so for receiving all future
communications from the Company including Annual
Reports, Notices, Circulars, etc., electronically.
16. Non-Resident Indian members are requested to inform DSRC
/ respective DPs, immediately of:
a) Change in their residential status on return to India for
permanent settlement.
b) Particulars of their bank account maintained in India with
complete name, branch, account type, account number
and address of the bank with pin code number, if not
furnished earlier.
17. Voting through electronic means
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 41st 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/Electronically.
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 voting period begins on December 22, 2017,
and ends on December 26, 2017. During this period
shareholders’ of the Company, holding shares either
in physical form or in dematerialized form, as on the
cut-off date December 15, 2017, may cast their vote
4 4
electronically. The e-voting module shall be disabled by
CDSL for voting thereafter.
v) The shareholders should log on to the e-voting website
www.evotingindia.com.
a) Click on Shareholders.
b) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. For NSDL: 8 Character DP ID followed by 8
Digits Client ID,
c. Members holding shares in Physical Form
should enter Folio Number registered with
the Company.
c) Next enter the Image Verification as displayed and
Click on Login.
d) If you are holding shares in demat form and had
logged on to www.evotingindia.com and voted
on an earlier voting of any company, then your
existing password is to be used.
e) If you are a first time user follow the steps given
below:
For Members holding shares in Demat Form and
Physical Form
PAN Enter your 10 digit alpha-numeric PAN issued by
Income Tax Department (Applicable for both demat
shareholders as well as physical shareholders)
• Members who have not updated their PAN
with the Company/Depository Participant are
requested to use the first two letters of their
name and the 8 digits of the sequence number
in the PAN field.
• In case the sequence number is less than 8
digits enter the applicable number of 0’s before
the number after the first two characters of the
name in CAPITAL letters. Eg. If your name is
Ramesh Kumar with sequence number 1 then
enter RA00000001 in the PAN field.
Dividend Enter the Dividend Bank Details or Date of Birth
Bank (in dd/mm/yyyy format) as recorded in your demat
Details account or in the company records in order to login.
OR Date • If both the details are not recorded with the
of Birth depository or company please enter the
(DOB) member id / folio number in the Dividend Bank
details field as mentioned in instruction (iv).
f) After entering these details appropriately, click on
“SUBMIT” tab.
g) Members holding shares in physical form will then
directly reach the Company selection screen.
However, members holding shares in demat form
will now reach ‘Password Creation’ menu wherein
they are required to mandatorily enter their login
password in the new password field. Kindly note
that this password is to be also used by the
demat holders for voting for resolutions of any
other company on which they are eligible to vote,
provided that company opts for e-voting through
CDSL platform. It is strongly recommended not
to share your password with any other person
and take utmost care to keep your password
confidential.
h) For Members holding shares in physical form,
41 st A N N U A L R E P ORT 2016-17

the details can be used only for e-voting on the
resolutions contained in this Notice.
i) Click on the EVSN for ESSAR STEEL INDIA
LIMITED on which you choose to vote.
j) On the voting page, you will see “RESOLUTION
DESCRIPTION” and against the same the option
“YES/NO” for voting. Select the option YES or
NO as desired. The option YES implies that you
assent to the Resolution and option NO implies
that you dissent to the Resolution.
k) Click on the “RESOLUTIONS FILE LINK” if you
wish to view the entire Resolution details.
l) After selecting the resolution you have decided
to vote on, click on “SUBMIT”. A confirmation box
will be displayed. If you wish to confirm your vote,
click on “OK”, else to change your vote, click on
“CANCEL” and accordingly modify your vote.
m) Once you “CONFIRM” your vote on the resolution,
you will not be allowed to modify your vote.
n) You can also take a print of the votes cast by
clicking on “Click here to print” option on the Voting
page.
o) If a demat account holder has forgotten the
changed password then Enter the User ID and
the image verification code and click on Forgot
Password & enter the details as prompted by the
system.
p) Shareholders can also cast their vote using
CDSL’s mobile app m-Voting available for
android based mobiles. The m-Voting app can
be downloaded from Google Play Store. Apple
and Windows phone users can download the
app from the App Store and the Windows
Phone Store respectively. Please follow the
instructions as prompted by the mobile app
while voting on your mobile.
q) Note for Non-Individual Shareholders and
Custodians
• Non-Individual shareholders (i.e. other than
Individuals, HUF, NRI etc.) and Custodian
are required to log on to www.evotingindia.
com and register themselves as Corporates.
• A scanned copy of the Registration Form
bearing the stamp and sign of the entity
should be emailed to helpdesk.evoting@
cdslindia.com.
• After receiving the login details a Compliance
User should be created using the admin
login and password. The Compliance User
would be able to link the account(s) for which
they wish to vote on.
• The list of accounts linked in the login should
be mailed to helpdesk.evoting@cdslindia.
com and on approval of the accounts they
would be able to cast their vote.
• A scanned copy of the Board Resolution and
Power of Attorney (POA) which they have
issued in favour of the Custodian, if any,
should be uploaded in PDF format in the
system for the scrutinizer to verify the same.
r) In case you have any queries or issues regarding
e-voting, you may refer the Frequently Asked
Questions (“FAQs”) and e-voting manual available
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
at www.evotingindia.com, under help section or
write an email to helpdesk.evoting@cdslindia.
com.
s) 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).
t) 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 December 15, 2017.
u) 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 of
December 15, 2017, (also follow the same
process of login mentioned above) may
obtain the login ID and password by sending
a request at helpdesk.evoting@cdsl.com or
to the Issuer at essar.steel@dsrc-cid.co.in.
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.india.com or contact CDSL at
its toll free no.:1800-200-5533.
v) 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.
w) 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.
x) Shri Dinesh Deora, Practicing Company
Secretary, has been appointed as Scrutinizer
to scrutinize the voting and remote e-voting
process in a fair & transparent manner.
y) 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/Electronically for all those Members
who are present at the AGM but have not
cast their votes by availing the “remote
e-voting” facility.
z) The Scrutinizer shall, after the conclusion
of voting at the general meeting, first count
the votes cast at the meeting and there after
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 counter sign the same
and declare the result of the voting forthwith.
aa) The Results declared along with the
report of the Scrutinizer shall be placed
on the website of the Company, viz.
www.essarsteel.com.
5 5
 Essar Steel India Limited

ANNEXURE TO NOTICE
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013:
Item no. 5
The Board of Directors of the Company at their meeting held on July 10, 2017 has re-appointed Shri Dilip Oommen as Managing Director & Dy.
CEO for a period of three years with effect from 1st July, 2017 to 30th June, 2020. However, due to initiate of CIR Process, his re-appointment
is subject to the provisions of the Insolvency & Bankruptcy Code, 2016.
Details of Director as required to be provided pursuant to the provisions of Secretarial Standard on General Meetings (“SS-2”), issued by the
Institute of Company Secretaries of India and approved by the Central Government are provided herein below:

Name of the Director Shri Dilip Oommen (02285794)

Age 59 years
Qualification He is a Metallurgical Engineer from the Indian Institute of Technology, Kharagpur.
Experience (including expertise in specific Shri Dilip Oommen joined Essar Steel India in July 2003 and has held the post of Chief
functional area)/Brief Resume Executive Officer, Essar Steel India Operations since March, 2008 and is Director Operations
of Essar Steel India Limited since July 2008. Prior to joining Essar Steel India, Shri Oommen
was Head of Hadeed Steel Plant from May 1998 to July 2003, initially with responsibility for
long products and later for flat products. Prior to taking up his post at Hadeed Steel Plant,
Shri. Oommen held the position of Vice President—Steel Making Plant, at Essar Steel India
at Hazira from January 1996 to May 1998. He has more than 33 years of experience in the
steel industry. In addition to his other responsibilities, Shri. Oommen serves on the board of
directors of Essar Steel and Essar Power.
Terms and Conditions of Re- Appointment (a) Salary:
Basic Salary in the scale of `10 lacs to `20 lacs per month, as may be determined by
the Board of Directors or Remuneration Committee or such other authority as may be
delegated by the Board of Directors from time to time.
(b) Perquisites:
i. Provident Fund, Superannuation, Gratuity, Leave Travel Concession,
Reimbursement of Medical Expenses – As per rules of Company.
ii. Allowances, Performance Bonus and Reimbursements not exceeding `40 Lakh
per month, subject to overall remuneration not exceeding `500 lakhs per annum.
Remuneration last drawn ` 350 lacs
Remuneration proposed to be paid As per the terms and conditions within the overall limits of `500 lacs p.a.
Date of first appointment on the Board 7th July, 2008.
Shareholding in the Company Nil
Relationship with other Directors/Key Not Applicable
Managerial Personnel
Number of meetings of the Board attended 4 Board Meetings.
during the financial year
Directorships of other Boards He holds directorship in 4 other public companies.
Membership/ Chairmanship of Committees Nil
of other Boards
A statement containing information required to be provided to the shareholders as per the provision of Schedule V in respect of re-appointment
of Shri Dilip Oommen is given below:
I. GENERAL INFORMATION:
(1) Nature of industry : Manufacturing and processing of Steel, Steel Hot Rolled Coils, Steel Cold Rolled Coils, Steel Plates, Steel
Pipes and other steel products.
(2) Date or expected date of commencement of commercial production: Not applicable, as the Company is an existing Company.
(3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing
in the prospectus: Not Applicable
(4) Financial performance based on given indicators

6 6 41 st A N N U A L R E P ORT 2016-17

Particulars
Total Income
Total Expenditure (Incl . Finance Cost, Exch. Variance, Depreciation and Tax)
Profit/(Loss) After tax
Earnings Per Share
Note: Please note that above figures for 2016-17 and 2015-16 are in IND AS. While Figures for 2014-15 are in IGAAP hence it is not
comparable.
(5) Foreign investments or collaborators, if any: till date
holding companies have made foreign investment
of approx. `6,800 Crores in the share capital of the
company.
II. INFORMATION ABOUT THE APPOINTEE:
(1) Background details:
Shri Dilip Oommen is a Metallurgical Engineer from the Indian
Institute of Technology, Kharagpur.
Shri Dilip Oommen joined the Company in July 2003 and has
held the post of Chief Executive Officer, Essar Steel India
Operations since March 2008 and is Director Operations of the
Company since July 2008. Prior to joining Essar he was Head
of Hadeed Steel Plant from May 1998 to July 2003 initially with
responsibility for long products and later for flat products.
Prior to taking up his post at Hadeed Steel Plant, Shri Oommen
held the position of Vice President –Steel Making Plant at
Essar Steel India at Hazira from January 1996 to May 1998.
He has more than 33 years of experience in the Steel industry.
In addition to his other responsibilities. Shri Oommen serves
on the Board of Directors of Essar Steel and Essar Power.
Shri Oommen holds various certifications in Management.
His impeccable technical acumen and excellent people
management skills are widely recognized and validated by
the fact that Essar Steel has consistently shown a marked
increase of Production, appreciable Cost reduction and quality
improvement.
(2) Past remuneration:
Remuneration received by Shri Oommen for the year FY
2015-16 is `350 lacs
(3) Recognition or awards :
Not Applicable
(4) Job profile and his suitability:
The qualifications, experience and expertise as mentioned
herein before, proves his suitability.
(5) Remuneration proposed:
As per the terms and conditions within the overall limits of
`500 lakhs p.a.
(6) Comparative remuneration profile with respect to industry, size
of the company, profile of the position and person (in case of
expatriates the relevant details would be w.r.t. the country of
his origin):
Remuneration paid is commensurate with the size of the
Company, profile of his position, experience and expertise and
is as per the industry standards for such post.
(7) Pecuniary relationship directly or indirectly with the company,
or relationship with the managerial personnel, if any:
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
(` in Crore)
IND AS IGAAP
FY 2016-17 FY 2015-16 FY 2014-15
21,959.72 15,403.09 14,369.35
(27,157.30) (19,760.05) (13,721.30)
(5,197.58) (4,356.96) 648.05
(16.72) (14.01) 2.26
Shri Dilip Oommen is not related to the Company, its Directors
or any of the managerial personnel. He is independent
qualified professional person.
III. OTHER INFORMATION:
(1) Reasons of loss or inadequate profits:
The Company had faced various extraneous challenges such
as disruption of committed natural gas supplies, disruption
in supply of raw materials, steep fall in selling price resulted
into reduction in net sales realization. The situation was
compounded by world –wide glut in steel and dumping in
Indian market predominantly by Chinese suppliers at predatory
prices, high interest cost and unwinding of OSPIL transaction.
(2) Steps taken or proposed to be taken for improvement:
The Company has taken rigorous and multifaceted efforts to
improve overall operations and functioning of the Company.
This includes scaling up production, reduction in overheads,
better capacity utilization and optimum use of resources. The
Government of India also took several measures such as
imposition of higher import duty, safeguard duty and minimum
import price etc. These will protect the steel industry from
dumping of cheap import of steel.
(3) Expected increase in productivity and profits in measurable
terms:
The Company has made substantial investment in enhancing
its steel manufacturing capacity to 10 MTPA and efforts are
being made to complete the integration with Odisha facilities.
The new facilities have commenced operations and with the
completion of integration, substantially contribution in revenue
and profitability is expected in the coming years.
IV. DISCLOSURES:
(1) All elements of remuneration package such as salary, benefits,
bonuses, stock options, pension etc. of all the directors.
Details of remuneration are mentioned in the resolution and
explanatory statement.
(2) Details of fixed component and performance linked incentives
along with the performance criteria.
The overall remuneration (inclusive of performance linked
incentives), as approved by the board, is up to maximum of
`500 Lakh per annum or as may be altered from time to time.
(3) Stock option details, if any, and whether the same has been
issued at a discount as well as the period over which accrued
and over which exercisable.
Not Applicable as no such options are provided.
(4) Service contracts, notice period, severance fees and other
disclosures
The appointment shall be governed as per the shareholders
resolution and agreement to be executed on the basis of the
7 7
 Essar Steel India Limited
terms as approved by the Board and Shareholders; notice
period is three months and there is no provision for severance
fees.
The Company has received approval from the Committee of
Creditors constituted under Insolvency and Bankruptcy Code,
2016 for payment of remuneration to Shri Dilip Oommen. The
Committee of Creditors has given its consent for payment of
remuneration of `400 lacs per annum w.e.f July 01, 2017 to
February 01, 2018. Any payment of remuneration to Shri Dilip
Oommen after 01st February, 2018, and/or in excess of ` 400
lacs per annum, shall be subject to such approval as may
be prescribed under the applicable laws and/or regulations.
However, the approval from the Members is sought for
reappointment of Shri Dilip Oommen for a period of three years
from 01st July, 2017 to 30th June, 2020, at a remuneration not
exceeding `500 lacs per annum.
It is declared that Shri Dilip Oommen is not having any interest
in the capital of the company or its holding company, directly
or indirectly or through any other subsidiary structures and
does not have any direct or indirect interest or related to the
directors or promoters of the Company or its holding company
at any time during the last two years before or on the date of
appointment and is having required qualification with expert
and specialized knowledge in the field of his profession.
This notice along with the explanatory statement should be
considered also as an abstract of the terms of the appointment
of Shri Dilip Oommen as Managing Director & Dy. CEO of
the Company and a memorandum as to nature of concern or
interest of the Directors in the said appointment.
The Board recommends the resolution for appointment of
Shri Dilip Oommen as Managing Director & Dy. CEO of
the Company as set out at Item No.5 of the Notice for your
approval.
8 8
Except for Shri Dilip Oommen, none of the Directors or Key
Managerial Personnel of the Company or their relatives are
in any way concerned or interested in the aforesaid Special
Resolution.
Item No. 6
Based on the recommendation of the Audit Committee, the Board
of Directors of the Company at their meeting held on July 10, 2017,
have 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,
2018 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, 2018.
Your Directors recommends passing of an Ordinary Resolution as
proposed at Item No.6 of the Notice.
None of the Directors, Key Management Personnel of the Company,
or their relatives are, in any way, concerned or interested, financially
or otherwise, in this resolution.
By Order of the Resolution Professional
For Essar Steel India Limited
Place : Mumbai Pankaj S Chourasia
Date: November 25, 2017 Company Secretary
41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

BOARD’S REPORT
To,
The Members of Essar Steel India Limited
Your Directors have pleasure in presenting the 41st Annual Report of your Company together with the Audited Statement of
Accounts for the year ended 31st March, 2017.
1. FINANCIAL STATEMENTS & RESULTS:
A) FINANCIAL RESULTS (` in Crore)

Standalone Consolidated
Particulars
FY 2016-17 FY 2015-16 FY 2016-17 FY 2015-16
Gross Revenue 21,959.72 15,403.09 23,332.30 16,177.88
Expenses 19,118.95 14,903.63 20,341.00 15,671.96
Profit before Finance Costs, Exchange Variation 2,840.77 499.46 2,991.30 505.92
and Derivative Losses, Depreciation /Amortisation,
Exceptional and Tax
Less: Finance Cost 5,607.79 4,851.58 5,957.60 5,134.30
Less: Exchange variation and Derivative Losses 193.49 446.47 185.39 443.37
(net)
Less: Depreciation / Amortization 1,903.06 1,949.86 2,063.43 2,060.82
Profit /(Loss) before Exceptional Items and Taxation (4,863.57) (6,748.45) (5,215.12) (7,132.57)
Add: Exceptional (1,918.40) 223.90 (1,921.28) 633.82
Profit /(Loss) before Tax (6,781.97) (6,524.55) (7,136.40) (6,498.75)
Tax Expense/ (Benefit) (1,584.39) (2,167.59) (1,552.06) (2,167.46)
Add: Share in Profit / (Loss) of Associates (Net) - - (35.87) (72.09)
Less: Non Controlling Interest - - (0.16) -
Profit /(Loss) after tax before Other (5,197.58) (4,356.96) (5,620.37) (4,403.38)
Comprehensive Income
Other Comprehensive Income (22.92) (48.97) (22.92) (48.97)
Profit /(Loss) after tax (5,220.50) (4,405.93) (5,643.29) (4,452.35)
Add: Balance brought forward from previous year (9,257.08) (5,012.77) (12,092.77) (7,802.04)
Less: Transfer to Hedging Reserve 6.53 51.88 6.53 51.88
Less: Transfer from Revaluation Reserve 133.14 109.74 133.14 109.74
Balance carried forward to next year (14,337.91) (9,257.08) (17,596.39) (12,092.77)

B. OPERATIONS investment in particular, resulted in marked improvements

GLOBAL SCENARIO
Global economy grew by 3.2% in 2016. The global
economy gained speed in the fourth quarter of 2016 and
the momentum is expected to persist in 2017. Structural
problems such as low productivity growth, high income
inequality, inward looking policies are still persistent in
advanced economies.
Activity was slow in the first half of 2016 but picked up
in the second half. A strong momentum in demand and
in manufacturing and trade, which were very weak in late
2015 and early 2016. Production of both consumer durables
and capital goods rebounded in the second half of 2016.
A number of factors contributed to these developments:
a gradual global recovery in investment, supported by
infrastructure and real estate investment in China, reduced
drag from adjustment to lower commodity prices, and the
end of an inventory cycle in United States.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 99
 Essar Steel India Limited

5 WORLD GDP % CHANGE
4
3.6
3.7
3.2
3
2.2
2
1.7
1 of the fiscal year. The Goods and Services Tax (GST)
0 economic growth in India. GST is also expected to eliminate
World Output Advanced Economies
2016 2017
Source: IMF – World Economic Outlook (October 2017)
Growth picked up in the United States as firms grew more
confident about future demand, and low inventories started
contributing positively to growth (after five quarters of drag).
Activity was on the upside in Japan thanks to strong net
exports. Positive momentum was seen in Euro area
countries, such as Germany and Spain, as a result of strong
domestic demand.
Economic performance across emerging markets and
developing economies remained mixed. China’s growth
remained strong, reflecting continued policy support. Activity
slowed in India because of the impact of the currency
exchange initiative. Brazil mired in deep recession slowing
down its economic activity. In Middle East & Turkey, activity
remained weak in fuel and non-fuel commodity exporters.
Forward-looking indicators, such as purchasing managers’
indices, suggest continued strength in manufacturing
activity into most part of 2017.
INDIAN SCENARIO
Indian economy is the sixth Largest economy by nominal
GDP and the third largest by purchasing power parity (PPP).
The economy grew at 7.1% in FY 2016-17 as against 8%
in FY 2015-16. The GDP growth has been significant on
back of dismal global conditions. The decline in growth
rate is primarily on account of slowdown in manufacturing,
investment and demonetization.
INDIA GDP % GROWTH.
9
8
7.9
7.5
7
7
The fundamentals of the Indian economy remain strong,
4.6 with robust economic growth, strong fiscal consolidation,
4.3
low current account deficit, higher agricultural output,
growing FDI, low inflation and higher wages in rural areas.
GDP in FY 2017-18 is expected to be in the range of 6.9%
(Fitch ratings) to 7% (Asian Development Bank). The drop
2.0 2.1 is primarily on account of weakness in private consumption,
manufacturing output and business investment. However
the economy is expected to accelerate in the second half
is expected to provide the much needed stimulant for
Emerging Markets and the cascading effect of taxes.
Developing Economies
2018 Some of the favourable factors in FY 2017-18 are given
below:
• Anticipated growth in consumption following reduced
spending in latter part of current fiscal due to
demonetization.
• Gross Value Add (GVA) to grow 7.3% in FY2017-18
compared to 7.0% in FY2016-17. Growth in all major
sectors i.e. agriculture, industry and services are
expected to contribute to the GVA growth.
• Normal monsoon is expected to soften food inflation,
the most volatile component of inflation. However,
firming up of crude oil prices will exert some pressure
on inflation.
• Pegging fiscal deficit at 3.2% would help government
to increase their spending on development activities.
• Government’s ‘Make in India’ initiative and thrust on
ease of doing business will support manufacturing
and economic growth momentum.
• Normal monsoon this year will also help increase
rural spending on consumption of white goods, Auto
and other consumer durables.
• Industrial growth is likely to reach 6.1% in FY2017-18
compared to 5.2% in FY2016-17. The cash crunch
faced by the sector due to demonetization will fade
over time well before FY2017-18.
• Services sector growth expected to grow from 8.8%
in FY2016-17 to 9.1% in FY2017-18.
• Landmark reform of indirect taxes through GST will
bring in the efficiency and reduce cost of logistics of
moving goods across states. This will also enable
8 huge revenue gains for the Government in long term
7.1
enabling higher Public investments across sectors.

6.1
6

3
Q1 FY 17 Q2 FY 17 Q3 FY 17 Q4 FY 17 FY 2015-16 FY 2016-17

Source: CSO

10 10 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

STEEL INDUSTRY
Global Overview
Global Crude Steel Production and Demand

Crude Steel Production (Mt) Steel Demand (Mt) Steel Demand Growth (%)
2015 2016 Growth (%) 2016 2017 2018 2017/16 (%) 2018/17 (%)
World 1599 1604 0.3% 1515 1622.1/1557.8* 1648.1/1583.4* 7.1/2.8*% 1.6%
China 804 808 0.5% 681 765.7/701.4* 765.7/701* 12.4/3.0*% 0.0%
India 90 96 6.2% 83.5 87.1 92.1 4.3% 5.7%
Japan 105 105 -0.2% 62.2 64 64.5 2.8% 0.8%
USA 79 79 -0.5% 91.8 96.2 97.3 4.8% 1.1%
S. Korea 70 69 -2.0% 57.1 56.2 56.4 -1.5% 0.4%
EU 166 162 -2.2% 158.2 162.1 164.3 2.5% 1.4%
Source: World Steel Association - October 2017
*A special note on China: China closed most of its outdated induction furnaces in 2017, a category which was generally not captured in official
statistics. With closure of the induction furnaces, the demand from this sector of the market is now satisfied by mainstream steel makers and
therefore captured in the official statistics in 2017. Consequently, the nominal growth rate for steel demand in China increased to 12.4% or
765.7 Mt. Disregarding this statistical base effect World steel expects that the underlying growth rate of China’s steel demand for 2017 will be
3%, which will make the corresponding global growth rate 2.8%

According to World Steel Association (WSA), the global
steel demand is forecaster to grow by 2.8% to 1622.1 in
2017.
The Chinese government stimuli provided a moderate
boost to the construction industry, contributing to increase
in GDP. China Steel Demand in 2018 is expected to remain
subdued with no growth over 2017 as the government
strengthens its efforts on environmental protection and
economic rebalancing.
The US economy continues to exhibit robust fundamentals
supported by strong consumer spending and rising
business confidence. EU economic recovery is broadening.
Japanese steel demand is showing better than expected
performance benefiting from the government stimulus
package, improving exports and preparations for the 2020
Olympic Games. South Korea’s steel demand is suffering
from high consumer debts, weakening construction and
a depressed shipbuilding sector, while escalated tension
around the North Korean nuclear weapons threat poses a
serious and highly unpredictable risk.
Domestic Overview
India remains the world’s 3th largest producer and consumer
of steel in 2016.
The economic activity slowed down in 2017, but accelerating
government reforms are expected to bring about a better
investment environment leading to growth in the coming
years. Investment activities are still driven by government
initiatives and private sector investment is still restrained.
According to the World Steel Association, the steel demand
in India is forecasted to be 87.1Mt in 2017 as against 83.5Mt
in 2016, a growth of 4.3% y-o-y. In FY2018-19, the steel
demand is forecaster to grow by 5.7% to 92.1Mt.
SALES AND MARKETING
The global steel markets recovered in 2016 but growth
remained slow amidst rising trade barriers, overcapacity
and price volatility. The global steel demand grew by
1% year-on-year to 1515 Mt in 2016 in contrast to -2.9%
decline witnessed in 2015. Recovery was led by China
where demand grew by 1.3% in 2016 to 681Mt (Million
Ton) compared to -5.4% decline in demand in 2015. The
crude steel production in 2016 grew by 5.9% year-on-year
to 1629.6 Mt. China, who accounts for nearly 50% of global
production grew by 0.6% to 808.4 Mt during 2016 and was
the main driver of global steel production and demand
growth.
In India, steel consumption grew at a modest pace of
2.6% year-on-year to 83.65 Mt during the financial year
2016-17. Demonetization and slowdown in construction
& infrastructure restricted consumption growth during the
year. Imports came down during the year on imposition of
trade measures by the government. The imports declined by
38% year-on-year to 7.23 Mt, at the same time, increased
production resulted in exports rising 101% to 8.24 Mt making
India a net steel exporter during 2016-17. The domestic
steel prices although supported by the regulatory measures
were highly competitive due to increased production, higher
raw material prices and stiff domestic competition.
Your company’s sales volume grew 44% year-on-year to
5.31Mt in the financial year 2016-17 as compared to 3.68Mt
in the previous financial year. Total domestic sales stood at
4.14Mt and exports at 1.17Mt. The quarterly sales of your
company grew steadily with each quarter.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 11 11
 Essar Steel India Limited

% Sales Quarter wise – FY 2016-17 as a substitute to continuous annealing line (CAL)

products and precision tubes i.e. 20MnB5, 22MnB5,
Q4 Q1 26MnB5.
28% 22%
• Your company was awarded by VE Commercial
Vehicle with Special Servicing Product Development
for import substitution of high strength steel
equivalent to abrasive resistant product DOMEX
650. This substitute is successfully used in their PRO
series of commercial vehicles. JCB, a construction
equipment manufacturer in India, appreciated your
company’s efforts in successfully developing high
Q2 strength steel as a part of import substitution.
25%
Q3 • Award from IGBC for product innovation in steel
25% sector under the Make in India campaign.
• The only private integrated steel mill in India to
Sales Trend Channel wise – FY 2012-13 to FY 2016-17 be approved for supplies of steel for warships,
submarines, battle tanks and armoured vehicles.
% SALES TURNOVER
70% • Your company is the only steel mill in the country to
65%
62% achieve the distinction of developing high strength
58%
60%
57% 58% steel up to 2000 MPa for the defence sector.
50%
• Supply of steel for the construction of prestigious
Chenab Bridge in J&K and Bogibeel bridge over river
40% Brahmaputra in Assam and Arunachal Pradesh.
Region Wise Exports Sales: % Share
30% 27% 26%
23% REGIONWISE EXPORT SALES - FY 2016
22%
20% 20%
16% 17% 18% 16% 1%
15%
3% Middle East
6%
10%
NAFTA
17%
0%
Asean
FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17
3% 66%
4% Europe
Domestic Export Retail
Africa

Source : Internal South America

Your company continued to maintain its focus on the Asia

domestic market with 77% sale in the financial year 2016-17.
Your company remained committed towards its customers.
Several far reaching initiatives were implemented REGIONWISE EXPORT SALES - FY 2017
successfully during the year which helped increase sales
volume by 54% year on year. Some of these initiatives are:
• Continued focus on geographies & key segments Middle East
and thrust on sale of value added products which 16% 21% NAFTA
helped increase sales and revenue. 1% 3%
Asean
• Long term MOUs with major customers covering 0%
nearly 70% of sales. This helped establish volume 11% Europe

consistency and retain market share. 48% Africa

• In keeping with your company’s focus on South America

understanding customers and meeting their
Asia
expectations, periodic customer meets and
engagement programs were implemented
throughout the year.
• New products were successfully developed & Source: Internal
introduced especially in the automotive sector making The global markets continued to remain challenging
your company highly competitive and a preferred and competitive during the financial year 2016-17. Your
choice amongst vehicle manufacturers. Some of
company was able to increase its export sales to Europe,
these include hot rolled high strength steel (S650MC
& S700MC) for commercial vehicle chassis, stretch ASEAN and other Asian countries despite stiff competition
flangable steel JSH 590B for passenger vehicles and and challenging environment. Low exports to NAFTA and
hot forming grade steel for automotive components Middle East region were compensated by sales to Europe
and ASEAN/Asia regions.

12 12 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Region wise Domestic Sales: these barriers. Your company has put in significant efforts
in strengthening operations to achieve higher capacity
0.9
REGIONWISE DOMESTIC SALES
utilization. In order to improve profitability, the company
0.8 0.77

0.7
0.73 0.73
focused on margin maximization by reducing fixed and
0.6
variable cost as well as increasing value added grades.
0.5 Key highlights of the year were –
0.4
 The 2nd unit of Multi fuel power plant commissioned
in November 2016. This will enable us to use the by-
0.3

0.2
0.11 0.12 0.12 0.11 0.13 0.14 products (coal fines and Corex gas) for generation of
0.1
0.01 0.01 0.01
power.
0
West North South East  Both Odisha and Vizag Pellet plants produced record
2014-15 2015-16 2016-17 annual production. Odisha pellet plant 1 volume
was 153% compared to last year. The 2nd 6 MTPA
Your company continued to maintain strong presence in Pellet plant under construction. Vizag pellet plant
Gujarat and other Western states. In North & South your production also increased by 66%.
company continued to focus on key customers to remain
 Blast Furnace, Corex, SMP2 and CSP also crossed
strategically present in these territories.
the highest annual production. Highest monthly
OPERATIONS production achieved at Blast Furnace (182KT),
During the year, your company has continued the volume SMP2 (329 KT) and CSP Mill (253 KT).
growth journey. Your company produced 47% higher crude  The finishing line production also increased
steel production over last year. We produced 5.47 million
significantly. The Cold Rolling, Galvanizing and
tons of crude steel against 3.74 million ton during the last
Pickling line produced record annual production. The
year. With affordable gas based Iron making process, the
monthly highest production by Hazira Galvanizing
production from HBI plants has increased 161% compared
line (49KT @ 0.6 million run rate) & Pickling lines
to last year. The Blast furnace also produced higher than its
(120KT @ 1.36 million run rate).
rated capacity for the third consecutive year.
 The Pune facility production has touched all time
During the month of March 2017, your company produced
high levels at pickling line, Galvanizing lines and
highest ever flat steel production – 566,000 Mt.
Color Coated line.
The introduction of MIP and Quality standards by the
 Emerged as Leading Exporter of Pellet - 1.35 Million
Government of India have resulted in better sales realization
and contained over supply situation in Indian market. The Tons Export during FY 16-17.
import at predatory prices have reduced significantly with  Cold commissioning of High Thickness Pickling Line
#3.
Awards and Accolades
Your company received the following awards during the year:
ESSAR STEEL INDIA LTD.
LIST OF AWARDS : 2016 – 17
Sr. AWARD TITLE CATEGORY AWARDED BY YEAR
1 Ispat Suraksha Puraskar No Fatal Accident during the Calendar Year – Joint Committee on Safety, 2017
2016 in Three Zones of Integrated Steel Plant. Health & Environment
1. Coal, Coke & Chemical Zone. in Steel Industry
2. Rolling Mills Zone. (JCSSI)-SAIL
3. Blast Furnaces, Slag Granulation Plant,
Sinter Plants & Raw Material Zone.
2 Safety Innovation Award Outstanding Health & Safety performance & The Institution of 2016
Safety Initiatives at Work Place. Engineers (India)
3 Greentech Safety Award Metal Mining Sector in Gold Award category. Greentech Foundation 2016
4 GSC & DISH, Govt. of Safety Honour & Appreciation. Certificates For Gujarat Safety Council 2016
Gujarat HBI & Pipe Division Essar Steel India Ltd.
5 Ispat Suraksha Puraskar No Fatal Accident during the Calendar Year – Joint Committee on Safety, 2016
2014 & 2015. Health & Environment
in Steel Industry
(JCSSI)-SAIL

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 13 13
 Essar Steel India Limited

ESSAR STEEL INDIA LTD.

LIST OF AWARDS : 2016 – 17
Sr. AWARD TITLE CATEGORY AWARDED BY YEAR
6 15th Annual Greentech Safety Management Greentech Foundation 2016
Safety Award 2016
7 31st Chapter Convention Poke Yoke Quality Council of India. 2016
CCQC – Best Poke Yoke Pune Chapter
Award
8 31st Chapter Convention Sujhav Project Quality Council of India. 2016
CCQC – Sujhav project Pune Chapter
Award
9 31st Chapter Convention Quality Control Project Quality Council of India. 2016
CCQC – Best Quality Pune Chapter
control project Award
10 31st Chapter Convention 5s Quality Council of India. 2016
CCQC Best 5 s Award Pune Chapter
11 DCCIA The best Safety The Best Safety Practices Deccan Chamber of 2016
Practices Award Commerce Industries &
Agriculture Pune)
12 DCCIA Pune Best Safety Best Safety Heroes Deccan Chamber of 2016
Heroes Award Commerce Industries &
Agriculture Pune)
13 DCCIA Pune Award for Best HR Practices Deccan Chamber of 2016
Excellence Commerce Industries &
Agriculture Pune)
14 The BEST HR Practices Best HR Practices Employer Branding 2016
AWARD Institute & World HRD
Congress with a CHRO
Asia
15 Business Excellence Award Outstanding Project on “Business Excellence”. Foundation for Accelerated 2017
Mass Empower, Delhi.
FINANCE the Insolvency and Bankruptcy Code, 2016 (“Code”). The
The company had submitted a detailed proposal to the National Company Law Tribunal (“NCLT”), vide its order
banks seeking restructuring of debts which included dated August 2, 2017, has directed initiation of Corporate
infusion of funds by the promoters, conversion of a portion Insolvency Resolution Process in respect of the Company.
of debt into share capital, segregation of sustainable & The resolution process is currently going on.
unsustainable debts, waiver of overdue/penal interest etc. C) REPORT ON PERFORMANCE OF SUBSIDIARIES,
As per advice of the lenders, Mecon conducted a techno- ASSOCIATES AND JOINT VENTURE COMPANIES:
economic viability study of the company, estimating the The performance and financial position of each of the
future level of production, sales & EBITDA.
subsidiaries, associates and joint venture companies for
The above proposal was under consideration of the lenders the year ended 31st March 2017 is attached and marked as
& company had a several round of discussion with them Annexure I and forms part of this Report.
during the financial year 2016-17. Pending decision on the
Details of companies which have become or ceased as
debt restructuring proposal, the lenders permitted “holding
on operations” arrangement to the company. The “holding subsidiary, associates and joint ventures, during the year
on operations” facility from the working capital consortium under review, are as under:
banks, enabled the company to conduct day to day banking Name of the Relationship Details of Date of
operations like availment of LC’s upon funding, issuance Company with the changes change
of bid bond & other guarantees, etc, discounting of LC Company
backed sales and purchase bills, etc. A fixed percentage
of sales collections of the company was paid to the banks Hazira Coke Step Down Ceased to be 15-04-2016
as “tagging” towards the past dues to the banks. Further, Limited Subsidiary Step Down
the lenders has appointed M/s Ernst Young as a concurrent Subsidiary of
auditor to review the cash flow of the company and all wholly owned
subsidiary
payments exceeding ` 10 lakhs.
However, during the financial year 2017-18, secured Essar Steel Step Down Became Step 30-09-2016
lenders of the Company, under the direction of Reserve UAE Limited Subsidiary Down Subsidiary
of wholly owned
Bank of India, had approached the National Company
subsidiary
Law Tribunal and invoked insolvency proceedings under

14 14 41 st A N N U A L R E P ORT 2016-17

Name of the Relationship Details of Date of
Company with the changes change
Company
P T Essar Step Down Became Step 30-09-2016
Indonesia Subsidiary Down Subsidiary
of wholly owned
subsidiary
D) DIVIDEND
Your Directors do not recommend any dividend for the year.
E) TRANSFER TO RESERVES:
The Board of Directors has not recommended transfer
of any amount of profit to reserves during the year under
review.
F) REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the
year under review.
G) DEPOSITS
The 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
THE COMPANIES ACT, 2013:
In terms of order dated 02nd August, 2017 passed by the
Hon’ble National Company Law Tribunal, Ahmedabad
Bench (NCLT Order), the Corporate Insolvency Resolution
Process has been initiated for the Company (CIRP) under
Insolvency and Bankruptcy Code 2016 (Code).
Mr. Satish Kumar Gupta was appointed as Interim
Resolution Professional in terms of the NCLT Order and
subsequently he was appointed as Resolution Professional
by the Committee of Creditors in its meeting held on
01st September, 2017 as per the provisions of the Code
(Resolution Professional).
Pursuant to Section 17 of the Code, during the continuation
of CIRP, the powers of the Board of Directors of the
Company stand suspended and the powers of the Board
of Directors and the management of affairs of the Company
being vested in the Resolution Professional, viz., Mr. Satish
Kumar Gupta.
I) DISCLOSURE OF ORDERS PASSED BY
REGULATORS OR COURTS OR TRIBUNAL
As disclosed above, Hon’ble National Company Law
Tribunal, Ahmedabad Bench has vide its order dated 02nd
August, 2017 has initiated Corporate Insolvency Resolution
Process of the Insolvency and Bankruptcy Code 2016 and
appointed Mr. Satish Kumar Gupta as Interim Insolvency
Resolution Professional who has been confirmed to continue
as Resolution Professional as approved by the Committee
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
of Creditors in its meeting held on 01st September, 2017
under the provisions of the said Code.
J) PARTICULARS OF CONTRACTS OR
ARRANGEMENT WITH RELATED PARTIES-
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. Attention of members is drawn to
the disclosure of transactions with related parties set out
in Note No.52 of Standalone Financial Statements, forming
part of the Annual Report.
K) PARTICULARS OF LOANS, GUARANTEES,
INVESTMENTS AND SECURITIES: -
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.
L) DISCLOSURE UNDER SECTION 43(a)(ii) OF THE
COMPANIES ACT, 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.
M) DISCLOSURE UNDER SECTION 54(1)(d) OF THE
COMPANIES ACT, 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.
15 15
 Essar Steel India Limited
N) DISCLOSURE UNDER SECTION 62(1)(b) OF THE
COMPANIES ACT, 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.
O) DISCLOSURE UNDER SECTION 67(3) OF THE
COMPANIES ACT, 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 is furnished.
2. MATTERS RELATED TO DIRECTORS AND KEY
MANAGERIAL PERSONNEL
a. BOARD OF DIRECTORS & KEY MANAGERIAL
PERSONNEL
Shri H Biswas and Shri Aloke Sengupta Directors of the
Company have resigned w.e.f 27.11.2016 and 27.07.2017
respectively as Directors of the Company. The Board places
on record its gratitude for the services rendered by them
during their tenure as a Director 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 Parveen kumar Malhotra retire by rotation
at the ensuing Annual General Meeting and being eligible,
have offered themselves for re-appointment
Shri J Mehra and Smt S Gayathri, Directors of the Company
have resigned w.e.f 20.06.2017 and 21.08.2017 respectively
as Directors of the Company. Shri Mahadev Iyer, Director
Finance superannuated on June 30, 2017.
Shri J Mehra and Shri Suresh Jain have been appointed
as CEO and CFO w.e.f June 21, 2017 and July 01, 2017
respectively.
3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
a. BOARD MEETINGS:
During the year under review, the Board of Directors met four times on July 21, 2016, September 23, 2016, November 22,
2016 and March 22, 2017.
Name of Director
Shri P S Ruia
Shri J Mehra@
Shri Arvind Pande
Shri V G Raghavan
Shri H Biswas#
Smt S Gayathri@
Shri Dilip Oommen
Shri Mahadev Iyer@
Shri P K Malhotra
Shri Sunit Joshi
Shri Aloke Sengupta#
Shri Rajiv Kumar Bhatnagar
Y – Yes, N – No, NA- Not Applicable
16 16
The Company has received the approval from the
Committee of Creditors under Insolvency and Bankruptcy
Code, 2016 for payment of remuneration to Shri Mahadev
Iyer, Director Finance & CFO, till the date of superannuation
viz. June 30, 2017 and to Shri Rajiv Kumar Bhatnagar,
Director (Projects) for the period from November 22, 2016
to February 01, 2018.
Based on the recommendation of the Nomination and
Remuneration Committee, the Board re-appointed Shri
Dilip Oommen as Managing Director & Dy. CEO. Shri Dilip
Oommen is re-appointed for a term of 3 years from July
01, 2017 to June 30, 2020. His appointment is subject to
approval of the members. The Board recommends his re-
appointment. However, any change in the management
of the corporate debtor during the Corporate Insolvency
Resolution Process will be subject to the approval of
the Committee of Creditors in terms of Section 28 of the
Insolvency & Bankruptcy Code, 2016. The Company has
received the approval from the Committee of Creditors in
respect of the appointment of Shri Dilip Oommen under
Insolvency and Bankruptcy Code, 2016 for the period from
July 01, 2017 to February 01, 2018.
The proposals regarding the appointment / re-appointment
of the aforesaid Directors are placed for your approval.
The Board of Directors recommend their appointment /
re-appointment.
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.
During the year, the meeting of the independent directors
was held on 22.11.2016 to evaluate the performance of the
Board of Directors of the Company.
c. PAYMENT OF COMMISSION TO MANAGERIAL
PERSONNEL
The Company has not paid any Commission to Managerial
Personnel during the financial period under review.
21.07.2016 23.09.2016 22.11.2016 22.03.2017
Y Y Y N
Y N Y Y
Y Y Y Y
Y Y N Y
Y N Y NA
Y Y Y Y
Y Y Y Y
Y Y Y Y
N Y Y Y
NA NA Y Y
NA NA NA Y
NA NA N Y
41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

#Shri H Biswas and Shri Aloke Sengupta Directors of the Company to be a member of the Committee w.e.f June 20, 2017
have resigned w.e.f 27.11.2016 and 27.07.2017 respectively consequent to his resignation as director of the Company.
@Shri J Mehra and Smt S Gayathri, Directors of the Company have
resigned w.e.f 20.06.2017 and 21.08.2017 respectively as Directors During the financial year 2016-17, the Committee had met
of the Company. on July 21, 2016, September 23, 2016, November 22, 2016
Shri Mahadev Iyer, Director Finance superannuated on June 30, and March 22, 2017. The Company Secretary acts as the
2017. Secretary of the Audit Committee.
Shri J Mehra and Shri Suresh Jain have been appointed as CEO Audit Committee
and CFO w.e.f June 21, 2017 and July 01, 2017 respectively.
Name of Director 21.07.2016 23.09.2016 22.11.2016 22.03.2017
b. DIRECTOR’S RESPONSIBILITY STATEMENT:
Shri Arvind Pande Y Y Y Y
In terms of Section 134(5) of the Companies Act, 2013, in
relation to the audited financial statements of the Company Shri J Mehra* Y Y Y Y
for the year ended 31st March, 2017, the Board of Directors
hereby confirms that: Shri V G Raghavan Y Y Y Y

a. in the preparation of the annual accounts, the Shri Sunit Joshi** NA NA NA Y

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
judgements 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, 2017 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;
g. as per para 9 of Secretarial Standard – 1, issued by
the Institute of Company Secretaries of India, the
Company has complied with applicable Secretarial
Standards.
c. AUDIT COMMITTEE:
The composition of the Audit Committee is in conformity
with the provisions of Section 177 of the Companies Act,
2013. The Audit Committee comprises of Shri Arvind
Pande, Chairman (Independent Director), Shri J Mehra
(Non Executive Director), Shri V G Raghavan (Independent
Director) and Shri Sunit V Joshi (Nominee Director).
Shri Sunit Joshi has been inducted as member of Audit
Committee w.e.f November 22, 2016. Shri J Mehra ceased
Y – Yes, N – No, NA- Not Applicable
*Shri J Mehra ceased to be a member of the Committee w.e.f June
20, 2017 consequent to his resignation as director of the Company.
** Shri Sunit Joshi has been inducted as member of Audit Committee
w.e.f November 22, 2016.
The attendance of Members at the Audit Committee
Meetings was as per the provisions and terms of reference
of Audit Committee.
The scope and terms of reference of the Audit Committee
are in accordance with the provisions of Companies Act,
2013. The Board of Directors of the Company had accepted
all the recommendations of the Committee on all the
matters.
d. NOMINATION AND REMUNERATION
COMMITTEE:
The composition of Nomination and Remuneration
Committee of Directors is in accordance with the
requirements of Section 178 of the Act. The committee
comprises of Shri P S Ruia (Non Executive Director),
Shri J Mehra (Non Executive Director), Shri Arvind
Pande (Independent Director) and Shri V G Raghavan
(Independent Director).
Shri J Mehra ceased to be a member of the Committee w.e.f
June 20, 2017 consequent to his resignation as director
of the Company. Shri P S Ruia has been inducted as a
member of the Committee w.e.f July 10, 2017.
During the year, the Committee had met on November 22,
2016. The Company Secretary acts as the Secretary of the
Nomination and Remuneration Committee.
Name of Director 22.11.2016
Shri J Mehra* Y
Shri Arvind Pande Y
Shri V G Raghavan Y
*Shri J Mehra ceased to be a member of the Committee w.e.f June
20, 2017 consequent to his resignation as director of the Company.
Shri P S Ruia has been inducted as a member of the Committee
w.e.f July 10, 2017

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 17 17
 Essar Steel India Limited
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.
The Nomination and Remuneration Policy of the Company
is available on the website of the Company and the link for
the same is provided below:-
http://www.essarsteel.com/investors
e. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The composition of Stakeholders Relationship Committee
of Directors is in accordance with the requirements of
Section 178 of the Act. The committee consists of Shri V
G Raghavan (Independent Director), Shri J Mehra (Non-
Executive Director), Shri Dilip Oommen (Executive Director)
and Shri Mahadev Iyer (Executive Director.)
Shri J Mehra, Director and Shri Mahadev Iyer, Director
Finance ceased to be a member of the Committee w.e.f
June 20, 2017 and June 30, 2017 respectively consequent
to their resignation as director of the Company. Shri Dilip
Oommen has been inducted as member of the Committee
w.e.f July 10, 2017. The current composition of Committee
is Shri V G Raghavan (Independent Director) and Shri Dilip
Oommen (Executive Director)
During the year, the Committee had met on July 21, 2016,
September 23, 2016 and November 22, 2016. The Company
Secretary acts as the Secretary of the Stakeholders’
Relationship Committee.
The attendance of members at the Stakeholders
Relationship Committee Meetings was as under:
Name of Director 21.07.2016 23.09.2016 22.11.2016
Shri J Mehra* Y Y Y to spend money on CSR activities required under Section
Shri V G Raghavan Y Y Y 135 of the Companies Act, 2013, however, Company is
Shri Mahadev Iyer* Y Y Y and also generally for the up liftment and benefit of project
Y- Yes
*Shri J Mehra, Director and Shri Mahadev Iyer, Director Finance ceased
to be a member of the Committee w.e.f June 20, 2017 and June 30, 2017
respectively consequent to their resignation as director of the Company.
Shri Dilip Oommen has been inducted as member of the Committee w.e.f
July 10, 2017.
f. VIGIL MECHANISM POLICY FOR THE
DIRECTORS AND EMPLOYEES:
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.
18 18
The Vigil Mechanism policy of the Company is available on
the website of the Company - http://www.essarsteel.com/
investors.
g. RISK MANAGEMENT POLICY:
The Board of Directors of the Company has designed
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.
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 Committee consists of Shri Arvind Pande, (Independent
Director), Shri J Mehra, (Non Independent & Non -Executive
Director), Shri V G Raghavan (Independent Director) and
Shri Dilip Oommen (Managing Director & Dy.CEO).
Shri J. Mehra (Non Independent & Non -Executive Director)
ceased to be a member of the Committee w.e.f June 20,
2017, consequent to his resignation as director of the
Company.
During the year under review, Committee met once on
March 30, 2016 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
undertaking CSR activities as part of MoEF conditions
affected persons and persons residing in the vicinity where
company carries its operations. The Annual Report on CSR
Activities for FY 2016-17 is available on the Company’s
website and the link for the same is provided below:
http://www.essarsteel.com/investors.
i. ANNUAL EVALUATION OF DIRECTORS,
COMMITTEE AND BOARD:
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. INDIAN ACCOUNTING STANDARDS (IND AS):
As per the roadmap announced by the Ministry of Corporate
Affairs, the Company has followed the new Accounting
Standards, IND AS and these are the first IND AS Financial
Statements of the Company.
k. INTERNAL CONTROL SYSTEMS:
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
41 st A N N U A L R E P ORT 2016-17

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.
l. DISCLOSURE UNDER SECTION 197(12) OF
THE COMPANIES ACT, 2013 AND RULE 5 OF
COMPANIES (APPOINTMENT & REMUNERATION)
RULES, 2014 - PARTICULARS OF EMPLOYEES
AND 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 Rule
5 (1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 are given in
Annexure IV 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.
m. PAYMENT OF REMUNERATION / COMMISSION TO
DIRECTORS FROM HOLDING OR SUBSIDIARY
COMPANIES:
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.
n. DISCLOSURE ABOUT REMUNERATION AS PER
SECTION II OF SCHEDULE V:
Disclosure about remuneration pay package of Directors
and other details are given in Annexure VI to this report.
4. AUDITORS AND THEIR REPORTS
The matters related to Auditors and their Reports are as
under:
a. STATUTORY AUDITORS
i) Observations of Statutory Auditors
on Standalone Accounts for the year
ended 31st March 2017 and Management
Response.
There was no qualification by the auditors on
the financial statements of the Company.
ii) 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
2016-17.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
1. We draw attention to Note no. 4
(c) and 11 regarding recognition of
` 4,755.61 Crore as Deferred Tax
Asset on unabsorbed depreciation,
carried forward business losses and
certain other items. Recognition of
Deferred Tax Asset has been qualified
in our audit report till previous year
to the extent it was not meeting the
criteria of ‘virtual certainty supported
by convincing evidence’ as required
under Accounting Standard (AS) 22
– Accounting for taxes on Income,
applicable until previous year. However,
from current year, Indian Accounting
Standard 12 – Income Taxes (Ind AS
12) has become applicable under
which Deferred Tax Asset shall be
recognised if future taxable profits are
probable. Further, under directions of
RBI and the decision of High Court
at Gujarat, the appointment of Interim
Resolution Professional (IRP) under
Insolvency and Bankruptcy code,
2016 (IBC) has become inevitable
as a result of which, the resolution
Company’s debt restructuring is more
likely to happen within a stipulated time
frame as against liquidation of assets.
In view of the robust improvement
in the operating performance of the
Company in the current year and a time
bound restructuring plan as stipulated
in the IBC which is now applicable to
the Company, the Company believes
that upon implementation of suitable
restructuring/resolution plan, there
is reasonable probability of sufficient
taxable income in the future for utilizing
the above Deferred Tax Asset.
Management’s Response:
Note 4 (c) appearing in annexed
Financial Statements is self-
explanatory and needs no further
explanation.
2. We draw attention to Note No. 53 (b)
to the standalone Ind AS financial
statements regarding Investment of
` 738.07 Crore in Essar Offshore
Limited, Mauritius (ESOL) and
corporate guarantee of USD 572.99
million, given jointly with two foreign
subsidiaries, to the lenders of ESOL,
in connection with an outstanding loan,
including interest and other charges,
amounting to USD 526.68 million taken
by ESOL for the purpose of investment
in Trinity Parent Corporation, USA, an
indirect subsidiary of the Company,
19 19
 Essar Steel India Limited
which loan has been recalled by lender
thereof and the related exposure. For
reasons explained in the Note, the
company has considered the USD
526.68 million as contingent liability.
Management’s Response:
Note 53 (b) 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. We draw attention to Note 64 regarding
Company’s current liabilities exceeding
its current assets by ` 33,304.28 Crore
as at 31st March, 2017. 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’s Response:
Note 64 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. 53 (4)
regarding cross subsidy surcharge
amounting to `536.34 Crore claimed by
Dakshin Gujarat Vij Company Limited
for the period from June 2013 to March
2017. For reasons explained in the
Note, the Company has reversed/not
provided the said amount during the
year under report.
Management’s Response:
Note 53 (4) 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.
5. Management’s response on the
Statutory Auditors’ Qualification
/ Comments on the Company’s
consolidated financial statements:
1. Qualification pertaining to
unaudited financial information
of certain step down subsidiaries
and an associate, management
accounts has been considered
for the consolidation of
accounts of these companies
in Consolidated Financial
Statement.
20 20
2. Emphasis of matter -
Management response has
been provided in the respective
Note to Account of Consolidated
Financial Statement.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR
ENDED 31ST MARCH 2017:
Provisions of Section 204 read with Section 134(3)
of the Companies Act, 2013, mandates to obtain
Secretarial Audit Report from Practicing Company
Secretary. Dinesh Kumar Deora, B.Com, F.C.S,
ACA, Company Secretary, were appointed to
issue Secretarial Audit Report for the financial year
2016-17.
Secretarial Audit Report issued by Dinesh Kumar
Deora, B.Com, F.C.S, ACA, Company Secretary, in
Form MR-3 for the financial year 2016-17 forms part
to this report (Refer Annexure V). The said report
does not contain any observation or qualification
requiring explanation or comments from the Board.
c. RATIFICATION OF APPOINTMENT OF AUDITORS:
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 2017-18 for all
applicable Product Groups. The Company received
the approval of the Central Government for the said
appointment. The said report does not contain any
observation or qualification requiring explanation or
comments from the Board.
e. INTERNAL AUDITOR:
As required under Section 138 of the Companies
Act, 2013 and Rule 13 of the Companies (Accounts)
Rules, 2014, the Internal Audit function is carried
out by an in house qualified and experienced team.
The Internal Auditors present their report to the
Audit Committee. The scope, functioning, periodicity
and methodology for conducting the internal audit
have been formulated in consultation with the Audit
Committee and the Board of Directors and the same
41 st A N N U A L R E P ORT 2016-17

is also commensurating the size and operation of the
Company.
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. EXTRACT OF ANNUAL RETURN:
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 2017 made under
the provisions of Section 92(3) of the Act is attached as
Annexure VI which forms part of this Report.
b. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS 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
Annexure VII which forms part of this Report.
c. DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL)
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
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
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 31.03.2017 for redressal.
During the year under review, 2 meetings of Internal
Complaints committee were held on 8th July, 2016
and 22nd January, 2017 respectively, attended by the
following members:
Smt Gayathri S (Presiding Officer), Shri Anil Matoo
(Member), Ms Nikita Shetye (Member), Shri Salil
Raheja (Member), Shri PK Mohanty (Member) and
Shri MR Nath (Member).
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 Essar Steel India Limited
Dilip Oommen Rajiv Kumar Bhatnagar
Managing Director & Dy. CEO Director (Projects)
DIN: 02285794 DIN: 07018252
Date: November 25, 2017
Place: Mumbai
21 21
 Essar Steel India Limited

Annexure I
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

Sr. Name of the Subsidiaries

No. subsidiary
Essar Essar Steel Essar PT Essar Paradeep Essar Steel Essar Essar Essar Essar New Trinity
Steel Middle East Steel (UAE) Indonesia Steel Offshore Minerals Mineral Minerals Minerals INC Holdings
Trading FZE Limited Company Limited Limited Cooperatief Canada LLC and
FZE Limited and U.A. Limited Subsidiaries
Subsidiaries
1 Reporting period NA NA NA NA NA NA NA NA NA NA NA
for the subsidiary
concerned, if different
from the holding
company's reporting
period
2 Reporting currency USD USD USD USD INR USD USD USD USD USD USD
in the case of foreign
subsidiaries
3 Exchange rate as on Rs. / INR 64.84 64.84 64.84 64.84 NA 64.84 64.84 64.84 64.84 64.84 64.84
the last date of the
relevant Financial year
in the case of foreign
subsidiaries
4 % of shareholding % 100.00 100.00 100.00 99.74 100.00 100.00 100.00 100.00 100.00 100.00 100.00
5 Share capital (incl. ` in 25.40 399.28 266.00 246.39 0.20 845.22 908.14 2,002.23 2,820.21 1,927.30 3,026.10
Share application Crores
Money)
6 Reserves & surplus ` in 26.33 45.15 (0.89) 349.68 (10.94) (4,603.07) (2,967.95) (2,972.49) (2,935.76) (2,381.17) (2,573.08)
Crores
7 Total assets ` in 90.01 2,215.31 37.65 815.01 6.22 1.04 0.35 0.05 5.43 - 1,196.72
(excluding Investment) Crores
8 Total Liabilities ` in 38.29 2,639.72 37.68 218.94 16.96 3,758.88 2,060.16 970.32 120.99 453.87 743.71
Crores
9 Investments ` in - 868.84 265.15 - - - - - - - -
Crores
10 Turnover ` in 4.69 1,049.41 - 1,353.63 - - - - - - -
Crores
11 Profit/ (Loss) before ` in 0.58 15.03 - 89.67 (0.82) (3,406.94) (3,029.92) (2,871.63) (1,790.95) - (2,437.26)
taxation Crores
12 Provision for taxation ` in - - - 31.25 - - - - - - -
Crores
13 Profit/ (Loss) after ` in 0.58 15.03 - 58.42 (0.82) (3,406.94) (3,029.92) (2,871.63) (1,790.95) - (2,437.26)
taxation Crores
14 Proposed Dividend ` in - - - - - - - - - - -
Crores

22 22 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Sr. Name of the Associates Associates

No. Bhander Essar Essar Essar Essar Steel Essar Essar
Power Bulk Power Power Chhattisgarh Power Processing
Limited Terminal Hazira Orissa Limited MP FZCO
Limited Limited Limited Limited
1 Reporting period for the subsidiary NA NA NA NA NA NA NA
concerned, if different from the holding
company's reporting period
2 Reporting currency in the case of INR INR INR INR INR INR USD
foreign subsidiaries
3 Exchange rate as on the last date of Rs. / INR NA NA NA NA NA NA 64.84
the relevant Financial year in the case
of foreign subsidiaries
4 % of shareholding % 26.00% 26.00% 26.00% 26.00% 47.38% 26.00% 40.00%
5 Share capital (incl. Share application Rs. in 372.70 5 578.63 372.78 12.20 2,223.85 59.78
Money) Crores
6 Reserves & surplus Rs. in 1,334.72 1,609.73 (0.98) (2.67) 0.12 (31.49) (56.68)
Crores
7 Total assets (excluding Investment) Rs. in 2,280.69 3,623.94 2,040.79 1,133.21 16.84 10,565.22 9.48
Crores
8 Total Liabilities Rs. in 1,058.26 2,010.35 1,463.14 763.11 4.51 8,372.86 6.56
Crores
9 Investments Rs. in 484.99 1.14 - - - - 0.18
Crores
10 Turnover (incl. Other Income) Rs. in 46.04 729.61 284.27 86.94 0.02 91.43 -
Crores
11 Profit/ (Loss) before taxation Rs. in (162.91) 188.68 4.47 12.07 (0.00) (93.06) (0.06)
Crores
12 Provision for taxation Rs. in (31.80) 35.89 2.56 5.71 - (15.82) -
Crores
13 Profit/ (Loss) after taxation Rs. in (131.11) 152.79 1.91 6.35 (0.00) (77.23) (0.06)
Crores
14 Proposed Dividend Rs. in - - - - - - -
Crores

Annexure II

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 thereto
1. Details of contracts or arrangements or transactions not at arm’s length basis - NIL

Annexure III

Particulars of loans, guarantees, investments and securities:

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are
given in note number 67 of the Notes to the standalone financial statements.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 23 23
 Essar Steel India Limited

Annexure IV
Disclosures Under Section 197(12) of the Companies Act, 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 2016-17 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-time Directors and KMP

Name of KMP % increase in Ratio of remuneration of each director

remuneration to the median remuneration paid/
payable to all employees for FY 2016-17
Dilip Oommen, Nil 43:1
Managing Director & Dy. CEO
Mahadev Iyer, Nil 36:1
Director (Finance) & CFO
Rajiv Kumar Bhatnagar – Director (Projects) Nil 20:1
Pankaj S Chourasia, Nil 8:1
Company Secretary,
Comparison of remuneration of KMP against Company has incurred loss for FY 2016-17 and no
performance of the Company: Remuneration increase has been done for any employee in
2016-17.
B. Non-Executive Directors
Non-executive Directors are not entitled to any remuneration except payment of sitting fees, details of which
are appearing in Annexure VI.
2) Median remuneration of all the employees of the Company for the financial year 2016-17 : `6.5 lakhs per annum;
3) The percentage increase in the median remuneration of Employees for the financial year: Nil;
4) The number of permanent employees on the payrolls of the Company as on March 31, 2017, are 3988;
5) Relationship between average increase in remuneration and Company’s performance:-
No increase in remuneration or any increments were given to any employees for FY 2016-17.;
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 and also the increase in the managerial remuneration was – Nil;
9) The key parameters for any variable component of remuneration availed by the directors:-
Based on the Company performance for FY 2016-17, Directors were paid 68% of the Budgeted Variable Component;
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 Dilip Oommen;
11) Remuneration is as per the remuneration policy of the company.

24 24 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

ANNEXURE-V

Form no. MR-3

Secretarial Audit Report
For the Financial Year Ended March 31, 2017
[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]
To,
The Members,
Essar Steel India Limited
27km, Surat Hazira Road
Hazira, Surat - 394270
Dear Members,
I 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 me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing
my opinion thereon.
Based on my 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 authorized representatives
during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering
the financial year ended March 31, 2017, 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:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for
the financial year ended on March 31, 2017 according to the provisions of:
1. The Companies Act, 2013 (the Act) and the rules made thereunder;
2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
3. The Depositories Act, 1996 and the Regulations and bye-laws framed thereunder;
4. The provisions of 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;
5. The following Regulations and Guidelines prescribed under the 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)
6. All applicable Labour Laws
7. Factories Act, 1948
8. Bombay Shop & Establishment Act,1948
9. Environment Protection Act, 1986 and other Environmental Laws.
10. Hazardous Wastes (Management and Handling) Rules, 1989 and Amendment Rules, 2003
11. Indian Contract Act,1872
12. 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. (Not Applicable – Since Company Shares are not Listed)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 25 25
 Essar Steel India Limited

During the period under review the Company has complied with the provisions of the Act, rules, regulations, guidelines,
standards etc. mentioned above.
I have relied on the representations made by the Company and its Officers for systems and mechanism formed by the
Company for compliances under other applicable Acts, Laws and Regulations to the Company.
I further report that the Company has generally complied with the Secretarial Standards issued by Institute of Company
Secretaries of India and filed event based e-forms to be filed with Registrar of Companies.
I 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 the 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 Meetings, agenda and detailed notes on agenda were sent
generally seven days in advance and a system exists for seeking and obtaining further information and clarifications on the
agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.
There were no transactions where dissent note was expressed by any board member.
I 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.
I further report that post the audit period:
Vide its order dated 2nd August, 2017, the Hon’ble National Company Law Tribunal, Ahmedabad Bench, Ahmedabad, has
initiated the Corporate Insolvency Resolution Process for Essar Steel India Limited under Insolvency and Bankruptcy Code
2016, and appointed Mr. Satish K Gupta as Interim Resolution Professional.
Dinesh Kumar Deora
Practising Company Secretary
FCS NO. 5683
C P NO. 4119
Place : Mumbai
Date : 17th October, 2017
Note: This report is to be read with our letter of even date that is annexed as Annexure - I and forms an integral part
of this report.
ANNEXURE - I
(Part of Annexure V of Secretarial Audit Report)
To
The Members,
Essar Steel India Limited
27km, Surat Hazira Road
Hazira Surat – 394270
Our report of even date is to be read along with this letter:
1. Maintenance of secretarial records is the responsibility of management of the Company. Our responsibility is to
express an opinion on these secretarial records based on our audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the
correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct
facts are reflected in secretarial records. I believe that the processes and practices, followed provide a reasonable
basis for our opinion.
3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
4. Wherever required, I have obtained the Management Representation about the compliance of laws, rules and
regulations and happening of events, etc. for laws other than corporate laws.
5. The compliance of the provisions of corporate and other applicable laws, rules and regulations, standards is the
responsibility of the management. My examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
Dinesh Kumar Deora
Practising Company Secretary
Membership No FCS 5683
COP NO 4119
Place: Mumbai
Date: 17th October, 2017

26 26 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

ANNEXURE-VI

EXTRACT OF ANNUAL RETURN

As on financial year ended on 31st March 2017
[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 :
U27100GJ1976FLC013787
ii) Registration Date :
JUNE 01, 1976
iii) 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 394270
Tel 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 : Data Software Research Co Pvt Ltd
Transfer Agent, if any: 19, Pycrofts Garden Road,
Off Haddows Road,Nungambakkam
Chennai 600006
Tel 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. Name and Description of main NIC Code of the Product/ service % to total turnover of the
No. products/services Company
1 Manufacturing of Hot Rolled Coils/ 330 / (New Code No. 2410) 78%
Cold Rolled Coils/Sheets/Plates

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 27 27
 III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES [No. of Companies for which information is being filled]

28 28
Sr. Name and address of the company CIN/GLN Holding/ Subsidiary/ Associate % of Applicable
No. Shares Section
Held
1 Essar Steel Asia Holdings Limited, NA Holding Company 72.08% 2(46) and
Essar House,10 Frere Felix de Valious Street, 2(87)
Port Louis Mauritius
2 Essar Steel Middle East FZE NA Wholly Owned Subsidiary 100% 2(87)(ii)
Plot No S 40402, PB No 261754, Jafza South,
Dubai UAE
3 Essar Steel Trading FZE NA Wholly Owned Subsidiary 100% 2(87)(ii)
Essar Steel India Limited

Emmar Business Park No 4, Suite No 508,

Sheikh Zayed Road, PO Box No 61078, Dubai
4 Essar Steel Offshore Limited NA Wholly Owned Subsidiary 100% 2(87)(ii)
Essar House, 10 Frere Felix De Valious Street,
Port Louis, Mauritius
5 Paradeep Steel Company Limited U27100MH2011PLC217214 Wholly Owned Subsidiary 100% 2(87)(ii)
Essar House ,11 KK Marg, Mahalaxmi
Mumbai-400034
6 Essar Steel Logistics Limited U60220GJ2013PLC074244 Wholly Owned Subsidiary 100% 2(87)(ii)
27 km, Surat Hazira Road,
Dist Surat - 394270
7 Trinity Coal Marketing LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
8 Essar Minerals Limited (FKA Essar Mining Ltd.) NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
9 Essar Mineral Cooperatief U.A NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
10 Essar Minerals Canada Limited NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
11 New Trinity Holding LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
12 New Resources Inc NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
13 Essar Mineral INC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
14 Trinity Parent Corporation NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
15 Trinity Coal Corporation NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
16 Trinity Coal Partners LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
17 New Trinity Coal Inc NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
18 Bear Fork Resources NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
19 Deep Water Resources LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
20 Levisa Fork Resources LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
21 North Springs Resources LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)

41 st A N N U A L R E P ORT 2016-17
 Sr. Name and address of the company CIN/GLN Holding/ Subsidiary/ Associate % of Applicable
No. Shares Section
Held
22 Little Elk Mining Company LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
23 Banner Coal Terminal LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
24 Hughes Creek Terminal LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
25 Frasure Creek Mining LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
26 Falcon Resources LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
27 Prater Branch Resources LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
28 Trinity RMG Holding LLC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
29 RMG INC NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
30 Essar Steel UAE Limited NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
305, AI, Futtaim Tower
AL Maktoum Street,Post Box 1961
Dubai UAE
31 P T Essar Indonesia (PTEI) NA Step-down Wholly owned Subsidiary 100% 2(87)(ii)
Graha Essar, BFI Estate, Industri 3 Area
KAV #B,Cibitung, Bekassi West Java 17520,
Indonesia
32 Bhander Power Limited U3110GJ1995PLC065146 Associates 26% 2(87)(ii)
27 KM Surat Hazira Road Surat-394270
33 Essar Bulk Terminal Limited U13100GJ2004PLC043477 Associates 26% 2(87)(ii)
27 KM Surat Hazira Road Surat-394270
34 Essar Power (Orissa) Limited U31101GJ2005PLC081701 Associates 26% 2(87)(ii)
27 KM Surat Hazira Road Surat-394270
35 Essar Steel Chhattisgarh Limited U27100GJ2005FLC046274 Associates 47.38% 2(87)(ii)
27 KM Surat Hazira Road Surat-394270
36 Essar Power Hazira Limited U40300GJ2006PLC063146 Associates 26% 2(87)(ii)
27 KM Surat Hazira Road Surat-394270
37 Essar Steel Processing FZCO NA Associates 40% 2(87)(ii)
Plot No S40402 PB No 261754 Jaffa South
Dubai UAE
38 Essar Power MP Limited U40100DL2005PLC201961 Associates 26% 2(87)(ii)
Prakash Deep, 10th Floor,7 Tolstoy Marg New
Delhi-110001
39 Odisha Slurry Pipeline Infrastructure Limited U60200OR2014PLC018639 Associates 30.20% 2(87)(ii)
House no. 119, Ward No.11
Badahan Road, NH 6, Behind Indian Bank,
Keonjar Dist, Odisha - 758001
Essar Steel India Limited

29 29
 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

30 30
A) Category-wise Share Holding
Category of Shareholders No. of Shares held at the end of the year 2016 No. of Shares held at the end of the year 2017 % Change
Demat Physical Total % of Total Demat Physical Total % of Total during the
Shares Shares year
A. Promoters
1 Indian
(a) Bodies Corporate 68,29,63,335 843 68,29,64,178 21.97 68,30,19,354 843 68,30,20,197 21.97 0.00
(b) Any other Trust 19,15,17,500 0 19,15,17,500 6.16 19,15,17,500 0 19,15,17,500 6.16 0.00
Sub-Total (A)(1) 87,44,80,835 843 87,44,81,678 28.13 87,45,36,854 843 87,45,37,697 28.13 0.00
2 Foreign
(a) Bodies Corporate 2,15,78,40,086 0 2,15,78,40,086 69.41 2,15,78,40,086 0 2,15,78,40,086 69.41 0.00
Essar Steel India Limited

Sub-Total (A)(2) 2,15,78,40,086 0 2,15,78,40,086 69.41 2,15,78,40,086 0 2,15,78,40,086 69.41 0.00

Total Promoter Shareholding=(A) 3,03,23,20,921 843 3,03,23,21,764 97.53 3,03,23,76,940 843 3,03,23,77,783 97.54 0.01
(1)+(A)(2)
B. Public Shareholding
1 Institutions
(a) Mutual Funds/ UTI 99,781 19,563 1,19,344 0.00 99,781 19,563 1,19,344 0.00 0.00
(b) Financial Institutions/ Banks 7,38,747 4,843 7,43,590 0.02 7,38,822 4,843 7,43,665 0.02 0.00
(c) Insurance Companies
(d) Foreign Institutional Investors 0 71,917 71,917 0.00 0 71,917 71,917 0.00 0.00
(e) Qualified Foreign Investor
(i)  Any other (Specify)
(ii) Foreign Bank
Sub-Total (B)(1) 8,38,528 96,323 9,34,851 0.03 8,38,603 96,323 9,34,926 0.03 0.00
2 Non -Institutions
(a) Bodies Corporate
(i) Indian 52,10,145 90,243 53,00,388 0.17 51,40,875 91,388 52,32,263 0.17 0.00
(ii) Overseas 2,541 3,030 5,571 0.00 0 3,030 3,030 0.00 0.00
(b) Individuals .
(i) Individual shareholders 3,98,94,931 1,64,60,767 5,63,55,698 1.81 3,99,41,742 1,63,98,089 5,63,39,831 1.81 0.00
holding nominal share
capital upto `1 lakh.
(ii) Individual shareholders 1,15,94,426 4,38,506 1,20,32,932 0.39 1,16,38,002 4,38,506 1,20,76,508 0.39 0.00
holding nominal share
capital in excess of `1 lakh
(c) Others
Non Resident Individuals 9,64,869 10,41,587 20,06,456 0.06 9,56,727 10,36,592 19,93,319 0.06 0.00
Sub-Total (B)(2) 5,76,66,912 1,80,34,133 7,57,01,045 2.43 5,76,77,346 1,79,67,605 7,56,44,951 2.43 0.00
Total Public Shareholding 5,85,05,440 1,81,30,456 76635896 2.47 5,85,15,949 1,80,63,928 7,65,79,877 2.46 0.01
(B)=(B)(1)+B(2)
TOTAL (A) + (B) 3,09,08,26,361 1,81,31,299 3,10,89,57,660 100.00 3,09,08,92,889 1,80,64,771 3,10,89,57,660 100.00 0.00
(C) Shares held by Custodians and against
which Depository Receipts have been
issued

41 st A N N U A L R E P ORT 2016-17
GRAND TOTAL (A)+(B)+(C) 3,09,08,26,361 1,81,31,299 3,10,89,57,660 100.00 3,09,08,92,889 1,80,64,771 3,10,89,57,660 100.00 0.00
 B) Shareholding of Promoter

Sr. Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year 2017 % change
No. 2016 in share-
  holding
No. of Shares % of total %of Shares No. of Shares % of total %of Shares
during the
Shares Pledged / Shares Pledged /
year
of the encumbered of the encumbered
company to total company to total
shares shares
1 Essar Steel Asia 215,52,13,248 69.33 69.19 Essar Steel Asia 224,09,39,040 72.08 71.95 2.75
Holdings Ltd. Holdings Ltd*
2 Essar Steel Ltd. 26,26,838 0.08 0.00 Essar Steel Ltd. 26,26,838 0.08 0.00 0.00
3 Imperial Consultants 67,22,32,720 21.62 21.62 Imperial Consultants & 27,75,483 0.09 0.06 -21.53
& Sec. Pvt. Ltd. Sec. P Ltd.**

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
4 In-Trust 19,15,17,500 6.16 6.16 In-Trust 19,15,17,500 6.16 6.16 0.00
5 Essar Properties 6,80,652 0.02 0.00 Essar Properties Ltd. 9,44,68,116 3.04 3.04 3.02
Ltd.
6 Essar Securities Ltd. 1,00,50,706 0.32 0.00 Essar Securities Ltd. 1,00,50,706 0.32 0.00 0.00
7 Essar Services India 100 0.00 0.00 Essar Services India 100 0.00 0.00 0.00
Ltd. Ltd.
Essar Steel Jharkhand 49,00,00,000 15.76 15.76 15.76
Limited $
Total 303,23,21,764 97.53 96.97 303,23,77,783 97.54 96.97
* Inclusive of 49,24,85,501 Equity Shares acquired from Essar Steel Limited, Mauritius pending for transfer and beneficial interest in 8,57,25,792 acquired from
Imperial Consultants and Securities.
** 27,75,483 equity Shares held by Imperial Consultants & Securities Private Limited on behalf of Imperial Consultants & Securities (firm).
$ Beneficial interest in 49,00,00,000 equity shares acquired from Imperial Consultants & Securities (firm)..
Essar Steel India Limited

31 31
 Essar Steel India Limited

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

Sr Particulars Shareholding at the Cumulative Shareholding

No beginning of the year during theYear
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
1 At the beginning of the year 303,23,21,764 97.53 - -
2 Date wise Increase / Decrease in Promoters 56,019 0.00 - -
Shareholding during the year specifying the
reasons for increase /decrease (e.g. allotment
/transfer / bonus/ sweat equity etc):
Sold during the year 9,50,92,749 293,72,29,015
Bought during the year 9,51,48,768 303,23,77,783 97.54
3 At the end of the year 303,23,77,783 97.54

D) Shareholding Pattern of top ten Shareholders:

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

Sr For Each of the Top 10 Shareholding at the Shareholding at the end of

No Shareholders beginning of the year the year
No. of % of total No. of % of total
shares shares of the shares shares of the
company company
At the Beginning of the year
1 IFCI Limited 7,20,000 0.02% 7,20,000 0.02%
2 Neetu Singh 5,91,100 0.02% 5,91,100 0.02%
3 Telelink Commercial Pvt Ltd 4,96,320 0.02% 4,96,320 0.02%
4 Gangadhar Narsinghdas Agrawal 3,00,000 0.01% 3,50,000 0.01%
5 Nak Securities Limited 2,25,000 0.01% 2,25,000 0.01%
6 Copcoan Vyapaar Private Limited 2,25,000 0.01% 2,25,000 0.01%
7 Aridhi Vanijya 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 Jayesh Nagji Nisar 1,93,166 0.01% 1,93,166 0.01%
10 Anoop Kumar Sahu 1,90,000 0.01% 1,90,000 0.01%
E) Shareholding of Directors and Key Managerial Personnel:

Sr. Shareholding of each Directors and each Key Shareholding at the Cumulative
No Managerial Personnel beginning of the year Shareholding during the
Year
No. of % of total No. of % of total
shares shares of the shares shares of
company the
company

At the beginning of the year NIL NIL NIL NIL

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

32 32 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

F) INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment as
on March 31, 2017 is as under:
(` in Crore)
Secured Loans Unsecured Deposits/ Total
Particulars Others1
excluding deposits Loans ICD Indebtedness
Indebtedness at the beginning of the
financial year
i) Principal Amount 37,226.98 325.49 3,374.39 - 40,926.86
ii) Interest Outstanding 1,405.68 0.73 396.59 - 1,803.01
Total (i+ii+iii) 38,632.66 326.22 3,770.99 - 42,729.87
Change in Indebtedness during the
financial year
Net Change - Addition/ (Reduction) 3,933.28 54.30 2,152.45 1,916.38 8,056.40
Indebtedness at the end of the
financial year
i) Principal Amount 38,000.36 380.12 5,616.97 1,772.67 45,770.12
ii) Interest Outstanding 4,565.58 0.40 306.47 143.71 5,016.15
Total (i+ii+iii) 42,565.94 380.52 5,923.44 1,916.38 50,786.27
Note:
1) Principal shareholder, India Growth Opportunities Fund (“IGOF”) has not granted its consent to the annulment of
Odisha Pipeline transaction. 52% of the lenders (by value) of OSPIL have not granted their consent to the annulment
of the Odisha Pipeline transaction. Essar Steel India Limited (“ESIL”) has accounted the annulment of the Odisha
Pipeline transaction in the books of accounts in anticipation of all the approvals. Matter is in dispute & a stay on the
matter has been granted by the Hon’ble High Court of Kolkata based on the application by SREI Infrastructure Finance
Limited (“SREI”), a lender. Liabilities to Odisha Slurry Pipeline Infrastructure Limited (“OSPIL”) reflected in books of
ESIL is the Purchase Consideration so far received, which will become repayable upon the annulment of the Sale.
XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager for FY 2016-17: (` in Lakh)

Sr. Particulars of Remuneration Name of MD/WTD/ Manager Total

No. Amount
Dilip Mahadev Rajiv
Oommen Iyer Kumar
MD & Dir (Fin) & Bhatnagar
Dy.CEO CFO Director
(Projects)
1 Gross salary      
(a) Salary as per provisions contained in section 320.53 243.49 114.06 678.08
17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 25.80 0.00 8.54 34.34
1961
(c) Profits in lieu of salary under section 17(3) NIL NIL NIL
Income- tax Act, 1961
2 Stock Option NIL NIL NIL
3 Sweat Equity NIL NIL NIL
4 Commission NIL NIL NIL
- as % of profit
- others, specify
5 Others, please specify 10.22 NIL 5.54 15.76
Total (A) 356.55 243.49 128.15 728.19
6 Ceiling as per the Act As per Schedule V, Part II of the Companies Act, 2013

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 33 33
 Essar Steel India Limited

B. Remuneration to other directors

(` in Lakh)

Sr. Particulars of Remuneration Name of Directors Total

No.   Amount

AP VGR
1 Independent Directors
Fee for attending board committee meetings 10.00 13.00 23.00
Commission Nil Nil
Others, please specify Nil Nil
Total (1) 10.00 13.00 23.00
AP – Arvind Pande, VGR – V G Raghavan (` in Lakh)

Sr. Particulars of Remuneration Name of Directors Total

No. PSR JM SG PKM HB AS SVJ Amount
2 Other Non-Executive Directors Nil Nil Nil 2.00 0.40 0.20 1.20 3.80
Fee for attending board committee meetings
Commission
Others, please specify
  Total (2) Nil Nil Nil 2.00 0.40 0.20 1.20 3.80
  Total (B)=(1+2) 26.80

Non Executive Directors – PSR – Shri P S Ruia, JM – Shri J Mehra, SG – Smt S Gayathri, PKM- Shri P K Malhotra,
AS- Shri Aloke Sengupta, SVJ- Shri Sunit V Joshi

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

(` in Lakh)
Sr. Particulars of Remuneration Key Managerial Personnel
No.   CEO CFO CS Total
1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the N.A. N.A. 50 50
Income-tax Act, 1961
(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, N.A. N.A. 0.00 0.00
1961
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. 50 50

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NOT APPLICABLE

34 34 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Annexure – VII
Annexure – ‘A’ to Directors’ Report
A. CONSERVATION OF ENERGY:
a) Energy Conservation measures taken:

ENERGY CONSERVATION MEASURES 2016-17

1 Material Handling - Installation of LED fittings in conveyor galleries and junction houses - Annual Energy savings (KWH) - 0.55 Lakhs.
2 SMP1-Switching off Tube lights in Caster Automation Room -Annual Energy savings (KWH)-0.21 Lakhs.
3 LP - Heat lost due to unburnt fuel Kiln No.1 of Lime plant 1 - Annual Energy Savings (Sm3) - 1.37 Lakhs.
4 LP - Heat lost due to unburnt fuel Kiln No.6 of Lime plant 2 - Annual Energy Savings (Sm3) - 0.82 Lakhs.
5 HSM - Replacing fluorescent Tube-lights with LED Tube-lights - Annual Energy savings (KWH) - 1.14 Lakhs.
6 BF - Reducing power consumption in TRT water cooling circuit pump - Annual Energy savings (KWH) - 4.8 Lakhs.
7 BF - Energy Loss due to venting of compressed air - Annual Energy savings (KWH) - 35.55 Lakhs.
8 BF - Energy loss due to higher inlet air temperature for compressors - Annual Energy savings (KWH) - 1.32 Lakhs.
9 Utilities - Optimization of fuel (Corex Gas) in RHTOB Boiler - Annual Energy savings (Sm3) - 1.39 Lakhs.
10 Utilities - Implementation of VFD in Fin Fan Cooler of Conarc-2 - Annual Energy savings (KWH) - 8.5 Lakhs.
11 Utilities - Installation of Translucent sheet in EAF-4 pump house - Annual Energy savings (KWH) - 0.22 Lakhs.
12 Utilities - Installation of LED light in Conarc -1 pump house - Annual Energy savings (KWH) - 0.42 Lakhs.
13 Pipe mill - Isolation of Hot testing area from cold testing area in QC Lab Coating plant - Annual Energy savings (KWH) - 0.45 Lakhs.
14 Pipe mill - Installing AC Drive at JCO Pipe Exit Conveyor - Annual Energy savings (KWH) - 0.1 Lakhs.
15 Aux - Reduction in Corex Gas flaring by Utilization in Multi Fuel Power Plant - Annual Energy Savings (Sm3) - 144.29 Lakhs.
16 Aux - Reduction in BF Gas flaring by Process improvement - Annual Energy Savings (Sm3) - 82.36 Lakhs.
Energy Savings measures at Pellet Plant:
1. Replacement of conventional luminaries with LED fittings (Approx -500nos) which has reduced failure of luminaries and saved
energy
2. Standby heat exchanger at pre heater has taken into line which has improved the FO temperature from 100 to 115 deg cen
which improved the combustion in furnace
Essar Steel India Ltd – Pune Facility

CONSERVATION OF ENERGY FOR FY 2016-17:

Energy Conservation measures taken:
1. Energy Saving on account of Chem. coater exhaust blower replaced from 37 KW to 11 KW in CCL-2. Annual savings of
` 9.502 Lacs
2. Energy Saving on account of Provision of VFD for Mill 3 Fume ex. Blower 200 kw. Annual savings of ` 21.698 Lacs
3. Energy Saving on account of Provision of VFD for Mill 3 coolant pump- 160Kw. Annual savings of ` 4.660 Lacs
4. Energy Saving on account of Provision of VFD for Mill 1 DC motor ventilation blower 90kw. Annual savings of ` 6.901 Lacs
5. Energy Saving on account of Provision of VFD for hot well pump (75 KW) in CGL-2. Annual savings of ` 10.168 Lacs
6. Energy Saving on account of idling of one 200KW dc motor each from uncoiler & recoiler in HSTL-2. Annual savings of
` 8.268 Lacs
7. Energy Saving on account of Idling of 3200 KVA transformer while installing finish oven (no load losses & copper losses-
52.30KWH at 75 deg. c) in CCL-2 . Annual savings of ` 9.546 Lacs
8. Energy Saving on account of Switching off 1 no 15 kw exit hyd. motors ( now 2 no’s running) CCL-1. Annual savings of
` 6.756 Lacs
9. Energy Saving on account of Provision of VFD for incinerator exhaust fan CCL-1. Annual savings of ` 10.985 Lacs
10. Energy Saving on account of Provision of VFD for RTF combustion blower of 15KW CGL-2. Annual savings of ` 3.435 Lacs
11. Energy Saving on account of Provision of VFD for F/O Z1 R/C fan CCL-1. Annual savings of `2.400 Lacs
12. Energy Saving on account of Provision of VFD for F/O Z2 R/C fan CCL-1. Annual savings of `4.170 Lacs
13. Energy saving on account of Installing Energy Efficient Pumps at Mill-2 Coolant system. In place of Running 02 Pumps of 55
KW each, we are running only one pump of 55 KW, so direct saving of 55KW power per hour. Annual savings of `15.342 lacs
14. Energy saving on account of Installing Energy Efficient Pumps, At Mill-1 Coolant system. In place of Running 02 Pumps of
55 KW each, we are running only one pump of 55 KW, so direct saving of 55KW power per hour. Total Annual savings of
`16.694 lacs
15. Cost saving on account of conversion of mill3 work rolls to mill3 deflector rolls (cost of new roll is ` 4.50 lacs whereas
conversion cost is ` 0.96 lacs only) Savings of `7.080 lacs

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 35 35
 Essar Steel India Limited

CONSERVATION OF ENERGY FOR FY 2016-17:

Energy Conservation measures taken:
16. Installed 15 KW Pump in place of 30 KW pump at CCL-2 De-greasing section. Annual savings of `4.553 lacs
17. Energy saving on account of using high pressure pump at RO plant. Installed 30KW high pressure pump in place of 45 KW
pump. Annual savings of `4.550 lacs
18. Energy Saving on account of reducing the water head by trimming the impellers of CGL Water pumps.
Annual savings of `17.78 lacs
b) Additional Investments and proposals being implemented for reduction in consumption of energy:

Proposed Energy Saving Projects - 2017-18

1 SINTER - To reduce energy consumption of CF 2 fan Motor/Synchronous trafo revival - Energy Savings (Lakhs kWh) - 29.88
- Approx. Investment - 4 Lakhs.
2 SINTER - High Efficient (COG) Burner in Ignition Furnace for Sinter Plant-(Savings in terms of NG) - Energy Savings (Lakhs
SCM) - 1.78 - Approx. Investment - 85 Lakhs.
3 SINTER - To reduce energy consumption of WRAL Motor - Energy Savings (Lakhs kWh) - 0.46 - Approx. Investment - 2.064
Lakhs.
4 COREX - Reduction in Specific Nitrogen consumption from 155 to 138 Nm3/t. - Energy Savings (Lakhs NCM) - 297.5 -
Approx. Investment - Nil.
5 COREX - Reduction in Specific Oxygen consumption from 530 to 503 Nm3/t. - Energy Savings (Lakhs NCM) - 472.5 -
Approx. Investment - Nil.
6 COREX - Phase II - Reduction in Specific Fuel rate consumption from 927 to 900 kg/t - Energy Savings (T) - 47250 - Approx.
Investment - Nil.
7 SMP-1 - Oxyfuel burner usage for Ladle preheating - Energy Savings (Lakhs SCM) - 18.44 - Approx. Investment - 5 Lakhs.
8 SMP-2 - Power saving by providing individual outlet damper for HMPS Station A Booster fan - Energy Savings (Lakhs kWh)
- 2.77 - Approx. Investment - 3 Lakhs.
9 SMP-2 - Power saving by providing individual outlet damper for HMPS Station B Booster fan. - Energy Savings (Lakhs kWh)
- 1.39 - Approx. Investment - 3 Lakhs.
10 SMP-2 - FES-2 Primary booster fan impeller replacement - Energy Savings (Lakhs kWh) - 18.51 - Approx. Investment - 80 Lakhs.
11 CCP - To replace tube lights with CFL/LED lamps in cable tunnel - Energy Savings (Lakhs kWh) - 0.09 - Approx. Investment
- 0.4 Lakhs.
12 HSM - Minimization of skin losses in furnaces - Energy Savings (Lakhs SCM) - 9.43 - Approx. Investment - 700 Lakhs.
13 HSM - Laminar Cooling Tower(CT) Pump replacement with energy efficient pumps - Energy Savings (Lakhs kWh) - 18.32 -
Approx. Investment - 30 Lakhs.
14 HSM - Laminar Cooling Tower pressure filter (PF) Pump replacement with energy efficient pumps - Energy Savings (Lakhs
kWh) - 22 - Approx. Investment - 75 Lakhs.
15 HSM - Laminar Pump replacement with energy efficient pumps - Energy Savings (Lakhs kWh) - 28 - Approx. Investment - 80 Lakhs.
16 HSM - Energy saving by replacing existing screw and reciprocating compressors with high efficiency centrifugal compressor
- Energy Savings (Lakhs kWh) - 73.35 - Approx. Investment - 87 Lakhs.
17 HSM - Booster Pump replacement with energy efficient pumps - Energy Savings (Lakhs kWh) - 87.52 - Approx. Investment
- 100 Lakhs.
18 CSP MILL - Reduction in Fuel Consumption by reducing heat losses through better monitoring and maintenance of TF Rolls
- Energy Savings (Lakhs SCM) - 4.32 - Approx. Investment - Nil.
19 PLATE MILL - Minimization of skin losses - Energy Savings (Lakhs SCM) - 6.9 - Approx. Investment - 500 Lakhs.
20 PLATE MILL - During Roll Change, Reduction in number of pumps running from 4 to 2. - Energy Savings (Lakhs kWh) - 0.36
- Approx. Investment - Nil.
21 PLATE MILL - Installation of Translucent sheets for Plate Mill lighting - Energy Savings (Lakhs kWh) - 4.9 - Approx. Investment
- 31 Lakhs.
22 PIPE MILL - Replace Screw Compressors with Centrifugal compressor - Energy Savings (Lakhs kWh) - 3.2 - Approx.
Investment - 70 Lakhs.
23 PIPE MILL - VFD installation for the compressor of Pipe Mill - Energy Savings (Lakhs kWh) - 0.8 - Approx. Investment - 10 Lakhs.
24 PIPE MILL - Installation of VFD on one compressor of coating plant - Energy Savings (Lakhs kWh) - 0.59 - Approx. Investment
- 10 Lakhs.
25 PIPE MILL - Installation of Lighting Energy saver - Energy Savings (Lakhs kWh) - 2.08 - Approx. Investment - 50 Lakhs.
26 CRM - AC drives will be used in place of star-delta starter for CTCM roll coolant supply pump.(160KW) - Energy Savings
(Lakhs kWh) - 14.02 - Approx. Investment - 27.5 Lakhs.
27 CRM - AC drives will be used in place of star-delta starter for CRM-1 roll coolant supply pump. (132KW) - Energy Savings
(Lakhs kWh) - 4.63 - Approx. Investment - 9 Lakhs.

36 36 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Proposed Energy Saving Projects - 2017-18

28 CRM - To install VVFD (AC drive) for power saving in GAL-1 APC Dryer Blower -6(WQT) (75KW) - Energy Savings (Lakhs
kWh) - 0.73 - Approx. Investment - 6 Lakhs.
29 CRM - LED lighting to be replaced in place of CFL (pilot project) - Energy Savings (Lakhs kWh) - 0.57 - Approx. Investment
- 2.2 Lakhs.
30 AUX - Energy loss due to Flaring of corex gas (Flaring reduction 3% from 6.49% - FY 16-17 data) - Energy Savings (Lakhs
SCM) - 296.03 - Approx. Investment - 500 Lakhs.
31 AUX - Energy loss due to BF gas flaring (3% from 12.46% - FY 16-17 data) - Energy Savings (Lakhs SCM) - 235.27 - Approx.
Investment - Nil.
32 AUX - To save energy by replacing conventional tube light with LED Fittings cable tunnel (25 nos 1st phase) in MRSS A -
Energy Savings (Lakhs kWh) - 0.59 - Approx. Investment - 6 Lakhs.
33 AUX - Energy saving by 41 % by Replacement of Metal Halide with LED lights in 220 KV switch yard area in MRSS B - Energy
Savings (Lakhs kWh) - 0.59 - Approx. Investment - 6 Lakhs.
34 MH/RMHS - MOD V&VI Screen Delta-Star Starter - Energy Savings (Lakhs kWh) - 2.06 - Approx. Investment - 3.6 Lakhs.
35 MH/RMHS - Energy optimization in Material feeding route to Corex plant - Energy Savings (Lakhs kWh) - 2.34 - Approx.
Investment - Nil.
36 MH/RMHS - Energy optimization in Coal feeding to coal bunker house (CC-107 HT Motor1 & HT Motor-2, CC-21) - Energy
Savings (Lakhs kWh) - 2.33 - Approx. Investment - Nil.
37 MH/RMHS - Energy optimization in Pellets feeding to oxide bunker house (CC-108 HT Motor, CC-23 M1 & CC-23 M2) -
Energy Savings (Lakhs kWh) - 1.67 - Approx. Investment - Nil.
38 MH/RMHS - Energy optimization in RMHS Offices-Illumination - Energy Savings (Lakhs kWh) - 0.81 - Approx. Investment - 10 Lakhs.
39 UTILITIES - Replacement of pump sets P33B & P32C (CRM Chiller Plant) - Energy Savings (Lakhs kWh) - 0.63 - Approx.
Investment - 1.8 Lakhs.
40 UTILITIES - To reduce Energy Consumption for CSP Mould 1&2 Secondary Cooling from 630 KW to 430 KW ( by 200 KW)
- Energy Savings (Lakhs kWh) - 16 - Approx. Investment - 20 Lakhs.
41 UTILITIES - Replace 09-P005 FES-Bearing cooling pump with appropriate capacity pump - Energy Savings (Lakhs kWh) -
0.64 - Approx. Investment - 1.6 Lakhs.
42 UTILITIES - Energy Saving in Plant-B Compressor and Chiller Cooling System by 7%- By installation of VFD in Cooling tower
fan - Energy Savings (Lakhs kWh) - 1.98 - Approx. Investment - 2 Lakhs.
43 UTILITIES - Installing VFD for 05 P006-B of Conarc-2 - Energy Savings (Lakhs kWh) - 1.83 - Approx. Investment - 2.8 Lakhs.
44 UTILITIES - Replacement of Screw chillers in CRM with Mist Air Cooling System - Energy Savings (Lakhs kWh) - 27.2 -
Approx. Investment - 30 Lakhs.

Way Forward - High Investment Projects

1 SINTER - Improving Thermal Energy Consumption in Sinter Plant - Annual Savings - 291.82 ` Lakhs : Approx. Investment - Nil.
2 SINTER - Improving Enthalpy of air for sintering batch - Annual Savings - 31.45 ` Lakhs : Approx. Investment - Nil.
3 SINTER - Sinter Plant Heat Recovery - Annual Savings - 1229.47 ` Lakhs : Approx. Investment - 4000 Lakhs.
4 BLAST FURNACE - Install VFD for Mixture de-dusting fan in Blast Furnace - Annual Savings - 260 ` Lakhs : Approx.
Investment - 160 Lakhs.
5 BLAST FURNACE - Install VFD for Combustion Air Supply Fan for Stoves - Annual Savings - 80 ` Lakhs : Approx. Investment
- 110 Lakhs.
6 HBI - WHRPP - 7 MW Waste Heat Recovery - Annual Savings - 2800 ` Lakhs : Approx. Investment - Nil.
7 SMP-1 - Hytemp Project - Annual Savings - 2330 ` Lakhs : Approx. Investment - 5000 Lakhs.
8 SMP-1 - VVVF Drive for LF Booster Fan - Annual Savings - 18.48 ` Lakhs : Approx. Investment - 30 Lakhs.
9 SMP-1 - WHRPP - 30 MW Waste Heat Recovery from EAF Flue Gases - Annual Savings - 12000 ` Lakhs : Approx. Investment
- 24000 Lakhs.
10 SMP-1 - Installation of VFD drive for ID fans of gas cleaning fan - Annual Savings - 24.48 ` Lakhs : Approx. Investment - 130 Lakhs.
11 SMP-2 - WHRPP - 20 MW Waste Heat Recovery Power Plant - Annual Savings - 8000 ` Lakhs : Approx. Investment - 16000 Lakhs.
12 CSP MILL - WHRPP - 4 MW - Annual Savings - 1600 ` Lakhs : Approx. Investment - 2400 Lakhs.
13 PLATE MILL - WHRPP - 3 MW - Annual Savings - 1200 ` Lakhs : Approx. Investment - 1800 Lakhs.
14 PLATE MILL - Drive System for ADCO Blowers - Annual Savings - 189.65 ` Lakhs : Approx. Investment - 120 Lakhs.
15 BBT - WHRPP - Additional 14 MW Power Generation from BF Standby Boiler instead of 19 MW WHRPP - Annual Savings -
5600 ` Lakhs : Approx. Investment - 8400 Lakhs.
16 UTILITIES - Steam Grid; Interconnect RHTOB, RHD and CRM Boilers - Annual Savings - 680 ` Lakhs : Approx. Investment
- 400 Lakhs.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 37 37
 Essar Steel India Limited

c) Impact of measures at (a) and (b) above for reduction of energy conservation and on the cost of production of goods:
As mentioned in (a) & (b) above
B. TECHNOLOGY ABSORPTION:
The Company has absorbed/in process of absorption of the following technologies obtained from various sources.
Hazira Facility:

Product Technology  from Year of import Status of absorption/adaptation

HBI (Sponge Iron) MIDREX Corpn. 1989-90 Fully absorbed
U.S.A./Voest Alpine, Austria
HRC including DC-Electric DC-Electric Arc furnace– Clecim, France 1991-94 Fully absorbed
Arc furnace, Continuous Continuous Caster - SMS, Demag / Siemag
Caster and Hot Strip Mill Hot Strip Mill - SMS, Siemag
HR Plate Mill SIEMENS VAI Metals Technologies SAS, 2006-08 Fully absorbed
Reheating furnaces FIVE STEIN FRANCE, 2006-08 Fully absorbed
Heat Treatment EBNER AUSTRIA 2007-08 Fully absorbed
Shot Blasting and painting USF, England 2007-08 Fully absorbed
line
Blast Furnace Unit MCC, China 2008-10 Fully absorbed
Corex Unites SVAIC, Austria 2007-10 Fully absorbed
HRC from Compact Strip SMS Siemag, Germany 2010-11 Fully absorbed
Production (CSP) mill
Twin Shell Conarc furnace SMS Demag 2008-11 Fully absorbed
Air Separation Unit (1 & 2) ASU#1 - HOPM, China & 2- SSAB, 2006-11 Fully absorbed
Sweeden
Air Separation Unit no. 3 M/S Air Products, UK 2008-11 Fully absorbed
Vizag facility:

Year of Status of absorption /

Product Technology  from
import adaptation
Pellet Plant at Vizag Lurgi Traveling Grate 1993 Fully absorbed
Process
High Gradient magnetic separator for the recovering Fe units from M/s Metso 2012 Fully absorbed
low grade ore of 45-50% Fe
Derrick screens for separating -150 Microns of tailing material M/s Derrick Corporation 2012 Fully absorbed
Ceramic Filters 3 Nos M/s. Huzhou Hehui 2013 Fully absorbed
Machinery co. Ltd
Electro Static Precipitator M/s Thermax India Ltd 2013 Fully absorbed
High pressure fuel burners Metal 7, Canada 2015 Under testing

Odisha Facility:

Product Technology from Year of import Status of absorption / adaptation

Pellet Plant at Odisha Aker Kverner, USA 2008-10 Fully absorbed

Pune Facility:
Product Technology from Year of import Status of absorption / adaptation
Color Coating Line – 2 M/s Commenco 2012 Fully absorbed
Continuous Galvanizing Line – 2 M/s Crescent 2012 Fully absorbed
R&D Technology Absorption – Pellet Plant
1. Filtration: - Booster Pump installed in gland water line which has improved the gland water pressure from 10 bar to 14 bar.
2. 104 & 106 valve position changed due to which membrane pressure drop could found out easily and eliminate 104 valves.
Reduced down time.
3. End plate roller bearing cap modified which improves bearing life,
4. Filtrate hole in plate drilled & extended the nozzle due to which composite moisture will less 0.3 %
5. Installation & commissioning of Wireless GSM Module to control and monitor the moisture.
6. Stacker:-Installation, Commissioning of Radio Remote Control system in stacker which increased the reliability of signal
transfer and reduced down time.
7. Replacement of Knife Gate valve with Butterfly valve in LIW System which improved the reliability

38 38 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

For the Export Market some of the key initiatives undertaken have been:
1) The Company is the largest supplier to Australian market with 80% share of GI import from India
2) The Company is the only supplier from India to Argentina supplying regularly 10Kt parcel size Gal.
3) The company is now one of the biggest exporters for Galv. product to USA
4) The Company is the largest exporter of CRFH to Indonesia
5) The Company has substantial presence in the Middle East market and developed products like VAG GI
6) Apart from the above the Company has been jointly developing products with various leading automobile manufactures
PPGI (Pre coated Galvanized Steel)
1) Company has stepped up presence in new geographies like Russia, Africa and Latin America
2) Successfully developed and commercialized high strength PPGI for Structural Applications
3) Developed Value Added Products like Wrinkle finish and Wood finish
I) Total Foreign exchange used and earned (` in Crores)

a) Total Foreign exchange earned 2016-17 2015-16

i) Foreign exchange directly earned through export 4,741.83 1,457.92
ii) Others 273.79 118.28
Total foreign exchange earned 5,015.63 1,576.20
b) Total foreign exchange used
i) For import of plant and machinery/technical know-how 3.02 15.12
ii) Others including raw materials and interest 4,631.71 4,223.84
Total foreign exchange used 4,634.74 4,238.96
Particulars with respect to Conservation of Energy:
FORM A
A. Power and Fuel Consumption

Sr. Particulars Year Year

No. 2016-17 2015-16
1 Electricity
a) Purchased
Unit (Lakhs) 42677 31752
Total Amount (` in crores) 1791 1214
Rate/Unit (`) 4.20 3.82
b) Own generation
(i) Through diesel generator
Unit (Lakhs) 5.19 3.66
Units per ltr. of diesel oil 2.08 2.05
Cost/Unit (`) 28.35 27.49
(ii) Through steam turbine / generator Unit (Lakhs) 1635 1248
Units per ltr. of Fuel oil/Gas/Steam Coal 0.97 0.98
Cost/Unit (`) 3.54 4.45
(iii) a)Through gas turbine / generator Unit - against gas (Lakhs) 16269 8325
Units / SM3 of gas 2.87 1.52
Cost of fuel/Unit (`) 0.62 0.56
(iv) a)Through third party on conversion-against gas-basis Unit (Lakhs) 1,669 -
Units / SM3 of NGL/HSD/NG 4.42 -
Cost of fuel/Unit (`) (excluding fixed cost) 5.05 -
2 Coal (specify quality and where used)
a) Steam Coal for power generation by CPP
Quantity (tones) 142152 93844
Total Cost (` crs) 44.94 35.12
Average Rate (`) 3161 3742

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 39 39
 Essar Steel India Limited

Sr. Particulars Year Year

No. 2016-17 2015-16
b) Anthracite Coal consumed as fuel for in duration Quantity (tones) 95576 54916
Total Cost (` crs) 68 42
Average Rate (`) 7123 7603
3 Furnace Oil
Quantity (k. ltrs) 91550 56995
Total Cost (` Crs) 232 142
Average Rate (Net of Modvat) 25365 24854
4 Others
Quantity.(NG) - ’000 SM3 153231 89817
Total Cost (` Crs) 331 189
Rate/Unit 21.58 21.04

B. Consumption per unit of Production

Particulars Standard Current Previous
(If any) year Year
Product: Beneficiated Concentrate Unit Per MT
Electricity (Kwh) 37 23.83 24.62
Others (specify) N.A. N.A. N.A.
Product: Iron Oxide Pellets Unit Per MT
Electricity (Kwh) 38 45.65 46.87
Furnace Oil / LSHS (Ltrs) 16 16.07 16.81
Anthracite Coal (Kgs) 17 15.11 14.17
Coal (Steam coal on net generation) (Kgs) 0.72 16.34 13.38
Others (specify) N.A. N.A. N.A.
Product: Hot Briquetted Iron Unit Per MT
Electricity (Kwh) 125 153.96 194.30
Other – NG (including Corex gas equivalent to NG) (SM3) 325 272.88 297.61
Product: Liquid Steel Unit Per MT
Electricity --- 831.35 802.62
Other – NG (SM3) --- 26.81 22.68
Product: Color Coated (ESPF) Unit Per MT
Pickling Line 8 4.94 5.15
Cold Rolling Mill – l 135 75.66 75.68
Cold Rolling Mill – ll 130 125.45 124.11
Cold Rolling Mill – lll 110 83.92 88.31
Galvanizing Line – l 85 44.91 44.40
Galvanizing Line – ll 105 50.66 59.39
Color Coating – l 70 47.14 60.56
Color Coating – ll 280 38.66 51.33

FORM B

RESEARCH AND DEVELOPMENT (R & D):

Essar Steel, with 10 MTPA capacity, produces a wide range of flat steel products that include Hot Rolled, Cold Rolled, Galvanized, Colour-
Coated products, extra wide plates and pipes. It caters to a wide section of industrial segments that include auto, ship building, white and yellow
goods, general engineering, power plants, hydrocarbon industry, pipe making and defence among others.

Essar steel R&D

Essar Steel has a separate corporate level R&D approved by Department of Scientific and Industrial Research. R&D is engaged in three broad
areas of research: -- a) Raw materials, b) Process improvements and c) Product development.

40 40 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

R&D organization:
At the apex level, R&D is governed by R&D council which is presided by CEO & MD of Essar Steel The R&D council consists of external
members of distinguished merit and ability as well as senior level Essar executives. Dr Sanak Mishra, former CEO of Arcelor Mittal, Dr .V
Ramaswamy, former ED of SAIL, R&D and currently Prof at PSG college of Technology , Dr. S.K Biswal, Chief Scientist, IMMT, CSIR lab and
Dr. M. Venkatraman, advisor to Essar Steel India Limited, formerly, Chief of R&D, Essar Steel India Limited are the external members.
R&D Facilities (Current)
A. Raw Material Research.
 Pot Grate Sintering cum pellet induration Machine
 Roller Briquetting Machine
 Column Floatation Unit
 Drum Pelletizer
 Disc Pelletizer
 Particle size analyzer (HORIBA)
 Lab scale ball mill
 Sieve shakers
 Petrographic microscope (DEWINTER)
In addition Thermo Gravimetric analyzer (TGA), Setup for - a) testing RDI of pellets, b) CSR, CRI TS, TMS of coal etc are used for regular
quality checks as well as for R&D purpose.
B. Metallography
 Metallurgical Microscope with Image Analyser Systems (LIECA)
 SEM with EDAX & EBSD attachments (JEOL)
C. Mechanical and chemical testing
 Micro Hardness Testing (LIECA)
 Hole Expansion Testing Machine
 Hysteresis Loop Tracer
 HIC/SSCC Laboratory
In addition Universal Testing Machines, Impact testing, Drop weight tear testing, XRF, Spectrometers, HIC/SSC testing are used for regular
quality checks as well as for R&D purpose.
R&D achievements in FY16-17
Accomplishments
• Twenty Six new products were developed in the FY 2016-17. Notable amongst them are :
 Bullet Proof steel ARMAPRO 500 for body armouring in thickness range 6 -15 mm capable of resisting bullets from Self Loading
Rifles, small arms etc.
 Clad steel plates (Mild steel plates clad with stainless steel) used in pressure vessels.
 High strength (S420N) structural quality plates in thickness 90-120 mm used in boiler support structures.
 High strength ( YS 900 Mega Pascal ) quench and tempered steel plates used for lifting and earthmoving equipment
 Commercial supply of hot forming grades used in crash members of passenger vehicles commenced. The material was
accepted after years of rigorous testing by the end user.
• Established pilot scale production of self-reducing briquettes made from by-products of sponge iron plant and blast furnace. The
briquettes were used as raw material for electric arc furnace.
• Fine-tuned the process of making man made sand from blast furnace slag.
• Established method of producing iron ore pellets with lower reduction degradation index in laboratory scale from iron ore sourced from
Odisha.
• Twelve Technical papers were presented and published at various seminars and conferences.
Collaborations :
Essar Steel is collaborating with IIT, Kharagpur to develop a model for thermal modelling of Corex Melter Gasifier.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Please refer table under the head TECHNOLOGY ABSORPTION.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 41 41
 Essar Steel India Limited
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ESSAR STEEL INDIA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Indian
Accounting Standards (Ind AS) financial statements
of ESSAR STEEL INDIA LIMITED (“the Company”),
which comprise the Balance Sheet as at 31st March,
2017, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flow and
the Statement of Changes in Equity for the year then ended,
and a summary of the significant accounting policies and
other explanatory information.
Management’s Responsibility for the Standalone Ind
AS Financial Statements
The 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 Ind AS financial statements that give a true and
fair view of the financial position, financial performance
including other comprehensive income, cash flows and
changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including
the Indian Accounting Standards (Ind AS) prescribed under
Section 133 of the Act, read with relevant Rules thereunder.
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 standalone Ind AS financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these
standalone Ind AS 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 of the standalone Ind AS financial
statements 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 standalone Ind AS financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the
standalone Ind AS financial statements. The procedures
selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the
42 42
standalone Ind AS 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 standalone Ind AS financial
statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances.
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 standalone
Ind AS financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best our information and according
to the explanations given to us, the aforesaid standalone
Ind AS 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, 2017, and its loss, total comprehensive
income its cash flows and the changes in equity for the year
ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to
the Financial Statements:
1. Note no. 4 (c) and 11 regarding recognition of `
4,755.61 Crore as Deferred Tax Asset on unabsorbed
depreciation, carried forward business losses and
certain other items. Recognition of Deferred Tax
Asset has been qualified in our audit report till
previous year to the extent it was not meeting the
criteria of ‘virtual certainty supported by convincing
evidence’ as required under Accounting Standard
(AS) 22 – Accounting for taxes on Income, applicable
until previous year. However, from current year,
Indian Accounting Standard 12 – Income Taxes (Ind
AS 12) has become applicable under which Deferred
Tax Asset shall be recognised if future taxable
profits are probable. Further, under directions of
RBI and the decision of High Court at Gujarat, the
appointment of Interim Resolution Professional
(IRP) under Insolvency and Bankruptcy code, 2016
(IBC) has become inevitable as a result of which, the
resolution of Company’s debt restructuring is more
likely to happen within a stipulated time frame as
against liquidation of assets. In view of the robust
improvement in the operating performance of the
Company in the current year and a time bound
restructuring plan as stipulated in the IBC which
is now applicable to the Company, the Company
believes that upon implementation of suitable
restructuring / resolution plan, there is reasonable
probability of sufficient taxable income in the future
for utilizing the above Deferred Tax Asset.
41 st A N N U A L R E P ORT 2016-17

2. Note No. 53 (b) to the standalone Ind AS financial
statements regarding Investment of ` 738.07 Crore in
Essar Steel Offshore Limited, Mauritius (ESOL) and
corporate guarantee of USD 572.99 million, given
jointly with two foreign subsidiaries, to the lenders
of ESOL, in connection with an outstanding loan,
including interest and other charges, amounting to
USD 526.68 million taken by ESOL for the purpose
of investment in Trinity Parent Corporation, USA,
an indirect subsidiary of the Company, which loan
has been recalled by lender thereof and the related
exposure. For reasons explained in the Note, the
company has considered the USD 526.68 million as
contingent liability.
3. Note 64 regarding Company’s current liabilities
exceeding its current assets by ` 33,304.28 Crore
as at 31st March, 2017. 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.
4. Note No. 53 (4) regarding cross subsidy surcharge
amounting to `536.34 Crore claimed by Dakshin
Gujarat Vij Company Limited for the period from
June 2013 to March 2017. For reasons explained in
the Note, the Company has reversed/not provided
the said amount during the year under report.
Our opinion is not qualified in respect of the above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report)
Order 2016 (“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, 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) 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 including Other Comprehensive
Income, the statement of Cash Flow and the
statement of changes in equity dealt with by
this Report are in agreement with the relevant
books of account.
d) In our opinion, the aforesaid standalone
Ind AS financial statements comply with
the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
e)
In our opinion, the matter described in
paragraph 3 under the Emphasis of Matters
paragraph may have an adverse effect on the
functioning of the Company.
f) On the basis of the written representations
received from the directors as on 31st March,
2017 taken on record by the Board of Directors,
none of the directors is disqualified as on 31st
March, 2017 from being appointed as a director
in terms of Section 164(2) of the Act.
g) With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and the operating effectiveness
of such controls, refer to our separate Report
in “Annexure B”.
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 standalone Ind
AS financial statements vide Note 53.
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.
iv. The Company has provided requisite
disclosures in the standalone Ind AS
financial statements as regards its
holding and dealings in Specified Bank
Notes as defined in the Notification
S.O. 3407(E) dated the 8th November,
2016 of the Ministry of Finance, during
the period from 8th November 2016
to 30th December 2016. Based on
audit procedures performed and the
representations provided to us by
the management we report that the
disclosures are in accordance with the
books of account maintained by the
Company and produced to us by the
management.
For M. M. Chaturvedi & Co.,
Chartered Accountants
(Firm Reg. No. 112941W)
Apurva Chaturvedi
Partner
Membership No. 126439
Mumbai
August 1, 2017
43 43
 Essar Steel India Limited
ANNEXURE-A to the Independent Auditors’ Report-31st
March, 2017
(Referred to in our Report of even date)
(i) In respect of its Property, Plant and Equipment:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of Property, Plant and
Equipment.
(b) The Property, Plant and Equipment 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 at reasonable intervals.
According to the information and explanation
given to us, no material discrepancies were
noticed on such verification.
(c) According to the information and explanations
given to us and on the basis of our examination
of the records of the Company, the title deeds
of immovable properties are generally held in
the name of the Company.
(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, 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
Sr. Name of the Nature of dues Forum where
No. statute dispute is
pending
1 The Customs Act, Customs Duty Commissioner
1962 of Customs,
Ahmedabad
Customs Duty Commissioner of
Central Excise,
Surat
a) Customs Duty CESTAT,
b) Penalty Bangalore
a) Customs Duty CESTAT, Mumbai
b) Penalty
44 44
explanations given to us, the Company has complied
with the provisions of Section 185 and 186 of the Act
in respect of investments, guarantees and securities.
(v) In our opinion and according to the information and
explanations given to us, the Company has not
accepted any deposit from the public during the year
in terms of the provisions of Section 73 to 76 or any
other relevant provisions of the Act and the rules
framed there under. Accordingly, paragraph 3(v) of
the Order is not applicable to the Company.
(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, Services
Tax, Duty of Customs, Duty of Excise, Value
Added Tax and other material statutory dues
applicable to it with the appropriate authorities.
There were no undisputed amounts payable in
respect of aforesaid statutory dues in arrears
as at 31st March, 2017 for a period of more
than six months from the date they became
payable.
(b) Details of dues of Income-tax, Sales Tax,
Services Tax, Duty of Customs, Duty of
Excise or Value Added Tax which have not
been deposited as on 31st March, 2017 on
account of disputes are given below:
Period to which Amount disputed Amount
the amount (` in Crore) deposited
relates (` in Crore)
Apr 12 - Dec 12 35.43 5.00
June 14 - Dec 14 2.77 -
1998-99 18.46 Nil
20.00 Nil
2004-05 4.42 Nil
4.42 Nil
41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Sr. Name of the Nature of dues Forum where Period to which Amount disputed Amount
No. statute dispute is the amount (` in Crore) deposited
pending relates (` in Crore)
2 Central Excise a) CENVAT credit CESTAT 2006-2011 1.50 0.05
Act, 1944 b) Penalty 1.50 Nil
a) Excise Duty Commissioner 2010-11 0.27 Nil
b) Penalty Appeal 0.13 Nil
a) CENVAT credit Commissioner of Dec 10-Aug 11 0.05 Nil
b) Penalty Central Excise, 0.05 Nil
Vadodara
3 Finance Act,1994 Service tax CESTAT-Mumbai 2006-07 0.89 Nil
(Service Tax) a) Service tax Commissioner June, 2007 to 0.11 Nil
b) Penalty (Appeals), Vizag September, 2011 0.11 Nil
4 The Gujarat Sales a) Sales Tax Jt. Commissioner April 2005 - March 10.22 2.55
tax Act b) Penalty of sales tax 2006 15.33
Sales Tax Jt. Commissioner 1998-1999 1.36 Nil
of sales tax
Sales Tax Jt. Commissioner 1997 to 1999 1.08 Nil
of sales tax
Sales Tax Gujarat VAT 1994-1995 0.90 0.05
Tribunal
Sales Tax Jt. Commissioner 1995-96 0.75 Nil
Sales Tax Jt. Commissioner 2000-01 0.49 Nil
5 Orissa Value Entry Tax SC of India April 2008 to 15.34 7.68
Added Tax Act, November 2012
2004
6 The Central Sales Sales Tax STAT 2004-05 0.46 0.22
Tax Act
AP VAT ACT Penalty STAT 2005-06 To 0.13 Nil
2008-09
AP High Court Sep 13 - Oct 13 0.20 0.05
(viii) According to the information and explanations given to us, the Company has not taken any loans from Government.
The Company has defaulted in repayment of dues to financial institutions and banks during the year. Details of the dues to
bank and financial institutions which have not been paid on due dates and which are outstanding as on 31.3.2017 are given
below :
Sr. Name of the Lender Principal amount in default Period of default
No. as on 31.03.2017 (` in Crore)
1 Allahabad Bank ** 69.83 Jan 2016 to March 2017
2 Axis Bank 72.94 Sept 2016 to March 2017
3 Bank of Baroda 352.40 June 2015 to March 2017
4 Bank of India ** 668.87 Sept 2015 to March 2017
5 Canara Bank ** 720.63 Feb 2016 to March 2017
6 Central Bank of India ** 358.36 Dec 2015 to March 2017
7 Corporation Bank ** 320.22 Feb 2016 to March 2017
8 Edelweiss ARC (Trust SC-187) 45.51 Sept 2015 to March 2017
9 Edelweiss ARC (Trust SC-217) 413.55 Dec 2015 to March 2017
10 Edelweiss ARC (Trust SC-114) 68.38 Sept 2015 to March 2017
11 Edelweiss ARC (Trust SC-233) 73.08 June 2016 To March 2017
12 Exim Bank 4.29 March 2016 to March 2017
13 HDFC Bank 121.57 January 2016
14 HDFC Limited 5.92 Dec 2016 to March 2017
15 ICICI Bank 638.29 Dec 2015 to March 2017
16 IDBI Bank 1,176.24 March 2016 to March 2017
17 Indian Overseas Bank ** 878.33 Feb 2016 to March 2017
18 Lakshmi Vilas Bank ** 41.18 Feb 2017 to March 2017
19 Punjab National Bank ** 1,056.36 Jan 2016 to March 2017

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 45 45
 Essar Steel India Limited

Sr. Name of the Lender Principal amount in default Period of default

No. as on 31.03.2017 (` in Crore)
20 SREI Multiple Asset Investment Trust 130.81 March 2016 to Dec 2016
21 State Bank of Hyderabad ** 269.80 Dec 2015 to March 2017
22 State Bank of Mysore 9.38 Dec 2016 to March 2017
23 State Bank of Bikaner & Jaipur ** 259.09 Feb 2016 to March 2017
24 State Bank of Patiala ** 599.33 Feb 2016 to March 2017
25 State Bank of India ** 969.04 Dec 2015 to March 2017
26 Syndicate Bank ** 80.65 Jan 2016 to March 2017
27 The Jammu & Kashmir Bank ** 354.73 Feb 2016 to March 2017
28 UCO Bank 2.44 March 2017
29 Union Bank of India ** 888.17 Feb 2016 to March 2017
TOTAL 10,649.40
** Aforesaid amount includes ` 6,695.98 Crore being (xiii) According to the information and explanations given
the overdue amount on account of devolved Export to us and based on our examination of the records
Performance Bank Guarantee (EPBG) and Standby Letter of the Company, transactions with the related parties
of Credit (SBLC) before its scheduled dates as defined in are in compliance with Sections 177 and 188 of the
Note no. 31 Act where applicable and details of such transactions
*** Exchange rate for dollar denominated facilities have been disclosed in the standalone Ind AS
considered at $1= `64.839 financial statements as required by the applicable
(ix) The Company did not raise any money by way of accounting standards.
initial public offer or further public offer (including (xiv) According to the information and explanations given
debt instruments) during the year. To the best of to us and based on our examination of the records
our knowledge and belief and according to the of the Company, the Company has not made any
information and explanations given to us, in our preferential allotment or private placement of shares
opinion, term loans availed by the Company were, or fully or partly convertible debentures during the
prima facie, applied by the Company during the year year. Accordingly, paragraph 3(xiv) of the Order is
for the purposes for which loans were obtained other not applicable to the Company.
than temporary deployment pending application.
(xv) According to the information and explanations given
(x) To the best of our knowledge and according to the to us and based on our examination of the records
information and explanation given to us, no fraud by of the Company, the Company has not entered into
the Company and no material fraud on the Company non-cash transactions with directors or persons
has been noticed or reported during the year. connected with him.
(xi) During the current year, the Company has paid (xvi) According to information and explanations given to
managerial remuneration amounting to `6.46 us, the Company is not required to be registered
Crore out of which `1.51 Crore is subject to Central
under Section 45 IA of the Reserve Bank of India
Government approval. According to the information
Act, 1934. Accordingly, paragraph 3(xvi) of the Order
and explanations given by the management, the
is not applicable to the Company.
Company is expecting the approval from the Central
Government. (Refer footnote under Note No.52 of For M. M. Chaturvedi & Co.,
financial statements.) Chartered Accountants
(xii) According to the information and explanations given (Firm Reg. No. 112941W)
to us, the Company is not a Nidhi Company as
prescribed under section 406 of the Act. Accordingly, Apurva Chaturvedi
paragraph 3(xii) of the Order is not applicable to the Mumbai Partner
Company. August 1, 2017 Membership No. 126439

46 46 41 st A N N U A L R E P ORT 2016-17

Annexure - B to the Independent Auditor’s Report – 31st
March 2017
(Referred to in our report of even date)
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Act
We have audited the internal financial controls over financial
reporting of Essar Steel India Limited (“the Company”)
as at 31st March 2017 in conjunction with our audit of the
standalone Ind As Financial Statements of the Company for
the year ended on that date.
Management’s Responsibility for Internal Financial
Controls
The Company’s management is responsible for establishing
and maintaining internal financial controls based on the
internal control over financial reporting criteria established
by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting issued
by the Institute of Chartered Accountants of India (“ICAI”).
These responsibilities include the design, implementation
and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly
and efficient conduct of its business, including adherence
to company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely
preparation of reliable financial information, as required
under the Act.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company’s
internal financial controls over financial reporting based
on our audit. We conducted our audit in accordance with
the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the “Guidance Note”) and the
Standards on Auditing issued by ICAI and deemed to be
prescribed under section 143(10) of the Act, to the extent
applicable to an audit of internal financial controls, both
applicable to an audit of Internal Financial Controls and,
both issued by the ICAI.
Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting
was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
depend on our judgement, including the assessment of the
risks of material misstatement of the financial statements,
whether due to fraud or error. We believe that the audit
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the Company’s
internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A Company’s internal financial control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles. A Company’s internal financial control over
financial reporting includes those policies and procedures
that:
(1) Pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the
Company;
(2) Provide reasonable assurance that transactions
are recorded as necessary to permit preparation of
financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the company are being made only in
accordance with authorisations of management and
directors of the company; and
(3) Provide reasonable assurance regarding prevention
or timely detection of unauthorised acquisition, use,
or disposition of the Company’s assets that could
have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and
not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting to future
periods are subject to the risk that the internal financial
control over financial reporting may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects,
an adequate internal financial controls system over financial
reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2017,
based on the internal control over financial reporting criteria
established by the Company considering the essential
components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the ICAI.
For M. M. Chaturvedi & Co.,
Chartered Accountants
(Firm Reg. No. 112941W)
Apurva Chaturvedi
Mumbai Partner
August 1, 2017 Membership No. 126439
47 47
 Essar Steel India Limited

Balance Sheet as at 31st March, 2017

(` in Crore)
Particulars Note As at As at As at
No. 31st March, 2017 31st March, 2016 1st April, 2015
Assets
Non Current Assets
Property, Plant and Equipment 6(a) 42,320.42 43,232.32 41,989.97
Intangible Assets 6(b) 18.34 17.48 24.31
Capital Work-in-Progress 4,072.99 3,396.73 4,582.37
46,411.75 46,646.53 46,596.65

Financial Asset
Investments in Subsidiaries and Associates 7 551.67 1,264.88 1,205.49
Other Investments 8 4.09 14.01 188.05
Other Non Current Financial Assets 9 170.17 179.56 137.57
725.93 1,458.45 1,531.11
Other Non-Current Assets 10 477.93 471.08 482.26
Deferred Tax Assets (net) 11 4,755.61 3,228.40 1,196.47
Current Assets
Inventories 12 2,572.62 2,325.55 2,689.65
Financial Asset
Trade Receivables 13 1,554.29 1,414.59 1,707.48
Cash and Bank Balances 14 308.89 96.72 250.14
Other Bank Balances 15 383.61 435.89 536.03
Current Loans and Advances 16 455.15 1,358.22 1,191.95
Derivative Financial Assets 17 - 0.11 8.04
Other Current Financial Assets 18 18.02 544.57 3,917.94
2,719.96 3,850.10 7,611.58
Other Current Asset 19 2,676.38 2,592.47 2,103.20
Current Tax Assets (Net) 20 59.37 39.33 30.56
TOTAL 60,399.55 60,611.91 62,241.48
Equity and Liabilities
Equity
Equity Share Capital 21 3,109.63 3,109.63 3,109.63
Other Equity 22 (2,680.28) 2,424.62 6,470.56
Non Current Liabilities 429.35 5,534.25 9,580.19
Financial Liabilities
Non Current Borrowings 23 18,343.35 20,997.54 22,407.17
Other Non Current Financial Liabilities 24 - - 6,985.98
Derivative Financial Liabilities 25 21.74 60.66 219.86
18,365.09 21,058.20 29,613.01
Other Non Current Liabilities 26 225.62 243.32 3,403.38
Non Current Provisions 27 37.59 36.42 43.94

Current Liabilities
Financial Liabilities
Current Borrowings 28 12,703.60 11,924.53 8,401.90
Trade Payables 29 4,841.66 4,301.15 3,653.87
Derivative Financial Liabilities 30 6.24 162.82 362.65
Other Current Financial Liabilities 31 22,333.70 11,997.73 2,639.48
39,885.20 28,386.23 15,057.90
Other Current Liabilities 32 1,433.93 4,080.46 4,518.05
Current Provisions 33 22.77 1,273.03 25.01
TOTAL 60,399.55 60,611.91 62,241.48
Notes to Financial Statements form an integral part of the Balance Sheet.
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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 1st August, 2017

48 48 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Statement of Profit and Loss for the year ended 31st March, 2017
(` in Crore)
Particulars Note For Year ended For Year ended
No. 31st March, 2017 31st March, 2016
Income
Revenue from Operations 34 21,763.46 14,923.20
Other Income 35 196.26 479.89
21,959.72 15,403.09
Expenses
Cost of Materials Consumed 36 11,943.52 8,937.33
Purchase of Traded Goods 150.27 160.50
Energy Cost 37 3,029.72 1,893.03
(Increase)/Decrease in Inventories of Finished Goods, Work 38 (362.80) 142.63
in Progress and Stock in Trade
Employee Benefits Expense 39 393.82 452.71
Excise Duty on Sale of Goods 1,856.85 1,268.79
Other Expenses :
Manufacturing & Asset Maintenance 40 1,259.49 916.01
Administrative Expenses 41 291.77 676.91
Selling & Distribution Expenses 42 556.31 455.72
19,118.95 14,903.63
Profit before Finance Costs, Exchange Variation and 2,840.77 499.46
Derivative Gains/ Losses, Depreciation /Amortisation,
Exceptional and Tax
Finance Costs 43 5,607.79 4,851.58
Exchange Variation and Derivative Losses (net) 44 193.49 446.47
Depreciation / Amortization Expense 1,903.06 1,949.86
Profit / (Loss) before Exceptional and Tax (4,863.57) (6,748.45)
Exceptional Items (Expense) / Income 45 (1,918.40) 223.90
Profit / (Loss) before Tax (6,781.97) (6,524.55)
Tax Expense/ (Benefit) 46 (1,584.39) (2,167.59)
Profit / (Loss) after Tax for the period (5,197.58) (4,356.96)
Other Comprehensive Income 47
A (i) Items that will not be reclassified to Profit or Loss (25.37) 2.73
(ii) Income tax relating to items that will not be 8.98 0.19
reclassified to profit or loss
B (i) Items that will be reclassified to profit or loss (9.99) (79.34)
(ii) Income tax relating to items that will be reclassified
to Profit or Loss 3.46 27.45
Total other comprehensive income (22.92) (48.97)
Total Comprehensive Income for the period (5,220.50) (4,405.93)
(Comprising Profit (Loss) and Other Comprehensive
Income for the period)
Earning/(Loss) per Share (in Rupees) 57 (16.72) (14.01)
Basic [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]
Diluted [Nominal value of Shares ` 10 each (Previous Year ` 10 each)]
Notes to Financial Statements form an integral part of the Statement of Profit and Loss.

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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 1st August, 2017

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 49 49
 50 50
Statement of Changes in Equity for the year ended 31st March 2017
(` in Crore)
Particulars Treasury Reserves and Surplus Fair Value Hedging Total
shares Capital Capital Securities General Foreign Revaluation Retained through Other Reserve
Reserve Redemption Premium Reserve Currency Reserve Earnings Comprehensive
Reserve Account Monetary Item Income- Equity
Translation Instrument
Difference
Opening Balance as on 1st (766.07) 12.73 202.92 7,814.61 77.51 (62.49) 4,565.13 (5,012.77) - (361.01) 6,470.56
April, 2015
Profit / (Loss ) for the year - - - - - - - (4,356.96) - - (4,356.96)
Other Comprehensive Income / - - - - - - - - (48.97) - (48.97)
Essar Steel India Limited

(Loss) for the year

Transfer to Retained Earnings - - - - - - - - 51.88 (51.88) -
Total Comprehensive Income - - - - - - - (4,356.96) 2.91 (51.88) (4,405.93)
for the year
Additional depreciation (transfer - - - - - - (109.74) 109.74 - - -
to Retained Earnings)
Effect of foreign exchange rate - - - - - (14.48) - - - - (14.48)
variations during the year
Transferred to statement of Profit - - - - - 65.89 - - - 308.58 374.47
and Loss during the year
Balance as on 31st March, 2016 (766.07) 12.73 202.92 7,814.61 77.51 (11.08) 4,455.39 (9,259.99) 2.91 (104.31) 2,424.62
Profit/ (Loss) for the year - - - - - - - (5,197.58) - - (5,197.58)
Other Comprehensive Income / - - - - - - - - (22.92) - (22.92)
(Loss) for the year
Transfer to Retained Earnings - - - - - - - - 6.53 (6.53) -
Total Comprehensive Income (766.07) 12.73 202.92 7,814.61 77.51 (11.08) 4,455.39 (14,457.57) (13.48) (110.84) (5,220.50)
for the year
Additional depreciation (transfer - - - - - - (133.14) 133.14 - - -
to Retained Earnings)
Effect of foreign exchange rate - - - - - 3.70 - - - - 3.70
variations during the year
Transferred to statement of Profit - - - - - 1.06 - - - 110.84 111.90
and Loss during the year
Balance as on 31st March, 2017 (766.07) 12.73 202.92 7,814.61 77.51 (6.32) 4,322.25 (14,324.43) (13.48) - (2,680.28)
Notes to Financial Statements form an integral part of statement of changes in equity.

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

Apurva Chaturvedi Dilip Oommen Rajiv Kumar Bhatnagar

Partner Managing Director & Dy. CEO Director (Projects)

Suresh Jain Pankaj S Chourasia

41 st A N N U A L R E P ORT 2016-17
Mumbai, 1st August, 2017 Chief Financial Officer Company Secretary
 Essar Steel India Limited

Cash Flow Statement for the year ended 31st March, 2017
(` in Crore)
Particulars For the Year ended For the Year ended
31st March, 2017 31st March, 2016
A. Cash Flow from Operating Activities
Net Profit/(Loss) before Taxation (6,781.97) (6,524.53)
Adjustments for -
Depreciation / Amortisation 1,903.06 1,949.86
Loss on Sale / Write Off of Fixed Assets (Net) - 0.76
Gain due to reclassification of Finance Lease - (254.83)
Profit on Sale of Non Current Investment (25.03) (0.01)
Exceptional Items Expense / (Income) 1,918.40 (223.90)
Finance Costs 5,607.79 4,614.70
Exchange Variation & Derivatives (Net) 177.69 651.63
Interest on Deposit with Banks and Others (113.22) (164.93)
Amortisation of Deferred Gain (17.70) (4.42)
Allowance for Doubtful Debt - 221.18
Provision for Impairment in Investment - 106.56
9,450.99 6,896.59
Operating Profit before Movements in Operating Assets and 2,669.02 372.06
Liabilities
Movements in Operating Assets and Liabilities:
Increase in Trade Payables 929.51 657.53
Increase / (Decrease) in Other Financial Current Liabilities 219.91 (385.96)
Increase / (Decrease) in Other Current Liabilities (405.79) 131.00
Increase / (Decrease) in Long Term Provisions 1.17 (7.52)
Increase / (Decrease) in Short Term Provisions (0.50) (1.74)
(Increase) / Decrease in Inventories (247.07) 364.10
(Increase) in Trade Receivables (177.12) (339.85)
(Increase) / Decrease in Short Term Loans and Advances (12.35) 21.48
(Increase) / Decrease in Other Current Assets 45.93 (312.65)
(Increase) / Decrease in Other Non Current Assets (3.36) 1.27
Decrease in Other Current Financial Assets 7.70 35.50
358.02 163.16
Cash Generated from Operations 3,027.04 535.22
Direct Taxes (Paid)/Refunded (net) (9.09) (8.77)
Net Cash Generated from Operating Activities 3,017.95 526.45
B. Cash Flow from Investing Activities
Purchase of Fixed Assets, including intangible assets, Capital (166.73) (173.45)
Work in Progress, Capital Advances and Trial Run Profits/Loss
Proceeds from Sale of Fixed Assets - 2,324.46
Proceeds from Sale of Non Current Investments - 33.88
Proceeds from redemption of Non Current Investments 2.05 1.93
Purchase of Non Current Investments (including Share
Application Money) :
In Subsidiaries - (84.89)
Others - (501.01)
Interest Income 70.42 144.45

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 51 51
 Essar Steel India Limited

Cash Flow Statement for the year ended 31st March, 2017
(` in Crore)
Particulars For the Year ended For the Year ended
31st March, 2017 31st March, 2016
Inter Corporate Deposit Given / (Refund) (Net) (2.36) (71.48)
Refund of Deposit Placed with Banks 74.50 64.48
Net Cash used/generated in/from Investing Activities (22.12) 1,738.37
C. Cash Flow from Financing Activities
Proceeds from Borrowings (net) 286.20 12,762.82
Repayment of Borrowings (86.13) (2,923.42)
Advance against Export Performance Bank Guarantee (35.92) (6,948.31)
Finance Cost paid (2,755.47) (3,834.76)
Exchange Variation & Derivatives (net) (192.34) (1,474.53)
Net Cash Generated from Financing Activities (2,783.67) (2,418.19)
Net Increase/(Decrease) in Cash and Cash Equivalents 212.16 (153.37)

Cash and Cash Equivalents at the beginning of the year (see 97.32 250.69
Note 3 below)
Cash and Cash Equivalents at the end of the year (see Note 3
below) 309.48 97.32
Net Increase/(Decrease) in Cash and Cash Equivalents 212.16 (153.37)

Notes:
1 The above Cash Flow Statement has been prepared using the “indirect method” set out in IND AS 7 - Statement of
Cash Flows.
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 As at
31st March, 2017 31st March, 2016
Cash and Cash Equivalents (Refer Note 14) 308.89 96.72
Less: Exchange Variation Gain (0.59) (0.60)
Cash and Cash Equivalents at the end of the year 309.48 97.32

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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 1st August, 2017

52 52 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
1. Nature of Operations / Corporate Information
The Company is a public limited company incorporated and domiciled in India. The address of its registered office is
27th Km, Surat Hazira Road, Hazira, Dist- Surat. The Company owns and operates an integrated steel manufacturing
facility comprising the unit for manufacturing of flat rolled products at Hazira, a Precoated facility at Pune, a Beneficiation
Plant at Kirandul and Dabuna, Slurry Pipeline, Pelletisation Plant at Vizag and at Paradeep. The Company also
operates Processing and Distribution centers, Hypermarts and Express Marts at various locations across India.
The Standalone financial statements for the year ended 31st March 2017 were approved by the Board of Directors and
authorised for issue on 1st August, 2017
2. Basis of Preparation
The Standalone Financial Statements have been prepared to comply in all material aspects with the Accounting
Standards notified under Section 133 of Companies Act, 2013 as per Companies (Indian Accounting Standards (Ind
AS)) Rules, 2015 and other relevant provisions of the Companies Act, 2013 and rules framed thereunder. Till the
year ended 31st March 2016 the financial statement of the Company have been prepared as Companies (Accounting
Standards) Rules, 2006 as amended and other relevant provisions of the Companies Act, 2013 and rules framed
thereunder. These are the first Ind AS Financial Statements of the company. As per the principles of Ind AS 101, the
transition date to Ind AS is 1st April 2015 and hence the comparatives for the previous year ended 31st March 2016
and balances as on 1st April 2015 have been restated as per the principles of Ind AS, wherever deemed necessary.
Refer note 58 for understanding the transition from previous GAAP to Ind AS and its effect on the company’s financial
position, financial performance and cash flows.
The Financial Statements have been prepared under the historical cost , except for certain financial assets and
liabilities (including derivative instruments) measured at fair value at the end of each reporting.
3. Statement of Significant Accounting Policies
(i) Investment in Subsidiaries, Associates and Joint Ventures
Investments in Subsidiaries and Associates are stated at cost in accordance with Ind AS 27 – Separate
Financial Statements. Refer note 7 for the list of significant investments.
(ii) Property, Plant & Equipment
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant
and equipment recognised as at 1st April, 2015 measured as per the previous GAAP and use that carrying value
as the deemed cost of the property, plant and equipment.
Property, Plant & Equipment are stated at cost, 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 property, plant & equipment are also
included to the extent they relate to the period till such assets are ready for their intended use. In respect of
accounting periods commencing on or after 7th December, 2006, exchange differences arising on reporting of
the long-term foreign currency monetary which are recognised in the financial statements till the period ending
31 March 2016 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 assets and are depreciated
over the balance life of the asset, if these monetary items pertain to the acquisition of a depreciable property,
plant & equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. When a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other
repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
(iii) 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.
(iv) Expenditure on Substantial Expansion
All direct capital expenditures 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.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 53 53
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(v) Depreciation and Amortisation
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 (SLM). Depreciation on additions to / deletions from property, plant & equipment 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 Average useful life as per
Act, 2013 (Years) Technical Evaluation (Years)
Sinter Plant, Rolling Mill and Blast Furnace 20 30
Power Generation Plant 40 30
Others 25 30
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
Intangible Assets
Costs relating to software’s, which are acquired, are capitalised and amortised on straight-line method over
estimated useful life of 5 to 6 years.
(vi) Impairment of non-financial Assets
The carrying amounts of assets are reviewed at each reporting 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 asset’s fair value less costs of
disposal 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 which is a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
If impairment loss is provided, depreciation is calculated on the revised carrying amount of the assets over its
remaining useful life.
(vii) 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. Revenue is measured at the fair value of the consideration received or
receivable.
Sale of Goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer. Amounts disclosed as revenue are inclusive of excise duty and net of returns, quality claims, volume
discounts, trade allowances, rebates, taxes collected on behalf of the government and amounts collected on
behalf of third parties.
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 income
Interest income for debt instruments is recognised using the effective interest rate method. The effective interest
rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset

54 54 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company
estimates the expected cash flows by considering contractual terms of the financial instrument but does not
consider the expected credit losses.
Dividends
Dividends are recognised in profit or loss only when the right to receive payment is established.
Rental Income
Rental income arising from operating leases on investment properties is accounted for on a straight-line basis
over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.
(viii) Taxes on Income
Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected
to be paid on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in
accordance with the Income Tax Act, 1961. Current income tax and deferred tax relating to items recognised
outside profit or loss is recognised either in other comprehensive income or in equity.
Deferred 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, using the balance sheet approach, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. 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 are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
The deferred tax assets are reviewed at each Balance Sheet date. It recognises, unrecognised deferred tax
assets to the extent that it has become reasonably certain that sufficient future taxable income will be available
against which such deferred tax assets can be realised. The Company writes down the carrying amount of a
deferred tax asset to the extent that it is no longer reasonably certain, as the case may be, that sufficient future
taxable income will be available against which deferred tax assets can be realised.
Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax
liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
(ix) 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. Cost of inventories also include all other costs incurred in bringing the
inventories to their present location and condition Costs of purchased inventory are determined after deducting
rebates and discounts. 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.
(x) Financial Assets
Classification
The company classifies its financial assets in the following measurement categories:
(a) those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and
(b) those measured at amortised cost.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 55 55
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses are recorded in profit or loss or other comprehensive
income. For investments in debt instruments, it depends on the business model in which the investment
is held. The company reclassifies debt investments only when its business model for managing those
assets changes.
Measurement
At initial recognition, the company measures a financial asset at its fair value. In case of a financial asset not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial
asset are added to the cost of acquisition to arrive at fair value. Transaction costs of financial assets carried at
fair value through profit or loss are expensed in profit or loss.
Debt Instruments
Subsequent measurement of debt instruments depends on the company’s business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which the
company classifies its debt instruments:
(a) Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in Other Income using the effective interest rate method.
(b) Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets’ cash flows represent
solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition
of impairment gains or losses, interest revenue and foreign exchange gains and losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these
financial assets is included in other income using the effective interest rate method.
(c) Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is
included in other income.
Equity Instruments
The company subsequently measures all equity investments at fair value. Where the company’s management
has elected to present fair value gains and losses on equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such
investments are recognised in profit or loss as other income when the company’s right to receive payments is
established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in Statement of
Profit and Loss. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Impairment of Financial Assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether
there has been a significant increase in credit risk. For recognition of impairment loss on other financial assets
and risk exposure, the company determines that whether there has been a significant increase in the credit risk
since initial recognition. Expected credit losses (ECL) are provided for based on the changes in credit risk of
the counterparty.
ECL is the difference between all contractual cash flows that are due to the company in accordance with the
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original Effective Interest Rates (EIR).
Derecognition of Financial Assets
A financial asset is derecognised only when:
(a) The company has transferred the rights to receive cash flows from the financial asset or
(b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset
is derecognised. Where the entity has not transferred substantial risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.

56 56 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial asset is derecognised if the company has not retained
control of the financial asset.
On derecognition of the asset, cumulative gain or loss previously recognised in other comprehensive
income (OCI) is reclassified from the equity to profit and loss (P&L).
Reclassification of Financial Assets
The company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments measured at fair value
through other comprehensive income and financial liabilities. For financial assets which are debt instruments,
a reclassification is made only if there is a change in the business model for managing those assets. Changes
to the business model are expected to be infrequent. The company determines change in the business model
as a result of external or internal changes which are significant to the company’s operations.
(xi) Financial Liabilities
Initial Recognition
All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables,
net of directly attributable transaction costs.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.
Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. This category includes
derivative financial instruments entered into by the company that are not designated as hedging instruments in
hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The
dividends on these preference shares are recognised in profit or loss as finance costs.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged
or cancelled. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss as other gains/(losses).
(xii) Financial Guarantee Contracts
Financial guarantee contracts issued by the company are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the counter party fails to make a payment when due in
accordance with the terms of a debt instrument. The company accounts for financial guarantee contracts as per
the principles of Ind AS 104 as it consider that such contracts are in the nature of insurance contracts. Once the
arrangements are designated as insurance contracts, these are disclosed as contingent liabilities unless the
obligations under guarantee become probable.
(xiii) Foreign Currency Transactions
Items included in the financial statements are measured using the currency of the primary economic environment
in which the company operates (‘the functional currency’). The financial statements are presented in Indian
rupee (INR), which is also the company’s functional and presentation currency.
Initial Recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the
transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 57 57
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
the translation of monetary assets and liabilities denominated in foreign currencies at reporting date exchange
rates are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow
hedges. All foreign exchange gains and losses are presented in the statement of profit and loss.
Measurement of Foreign Currency Monetary Items at Balance Sheet Date
Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates
of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value is determined.
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 which are recognised in the financial statements till
the period ending 31st March 2016 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 (FCMITDA)” in the Financial Statements and are amortised over the balance period of such long-term
asset/liability.
(xiv) 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 is 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.
(xv) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when there is a present legal or constructive 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. Provisions are measured at the present value of
best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The
discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as interest expense.
Contingent liabilities and Contingent assets are not recognised but disclosed in the notes to the Financial
Statements.
(xvi) 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.
(xvii) Derivative Instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged and the type of hedge relationship designated.
The Company had Principal only swap (POS) contracts to hedge risks associated with foreign currency
fluctuations relating to highly probable forecasted transactions. The company documents at the inception of
the hedging transaction the economic relationship between hedging instruments and hedged items including
whether the hedging instrument is expected to offset changes in cash flows of hedged items. The company
documents its risk management objective and strategy for undertaking various hedge transactions at the
inception of each hedge relationship.
The Company had designated certain POS contracts in a cash flow hedging relationship by applying the hedge
accounting principles. 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
in the other comprehensive income in cash flow hedging reserve within equity (net of applicable deferred taxes)
and the ineffective portion is recognised immediately in the profit and loss.

58 58 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
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 equity as Hedging
Reserve 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 Profit and Loss.
Mark to market gains and losses on all other derivative contracts, other than forward contracts which are in the
nature if long term foreign currency monetary items, outstanding at the balance sheet date are recognised in
the profit and loss.
(xviii) Employee Benefits
Short Term Employee Benefits
Liabilities for wages and salaries, including any non-monetary benefits that are expected to be settled within
the next 12 months from the end of the reporting period in which the employees render the related service are
recognised as employees cost up to the end of the reporting period and are measured at the amounts expected
to be paid when the liabilities are settled.
Other Long Term Employee Benefits –
Compensated Absences
Provision for compensated absences is determined based on actuarial valuation. Therefore it is measured as
the present value of expected future payments to be made in respect of services provided by employees up to
the end of period ending 31st December 2014 using the projected unit credit method. Post this date, there are no
compensated absences provided to the employees and hence not provided for. The obligations are presented
as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for
at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Post-Employment Benefits
Provident Fund
Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are
charged to the 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.
Gratuity
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service cost.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included
in retained earnings in the statement of changes in equity and in the balance sheet. Remeasurements are not
reclassified to profit or loss in subsequent periods.
(xix) 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.
(xx) 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.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
(xxi) Leases
Where the Company is the Lessee
Finance leases entered, 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

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 59 59
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
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 Profit
and Loss on a straight-line basis over the lease term.
Where the Company is the Lessor
Assets subject to operating lease are included in property, plant & equipment. 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.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use
the asset or assets, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to 1 April 2015, the company has determined whether the arrangement
contain lease on the basis of facts and circumstances existing on the date of transition.
(xxii) 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
(xxiii) Measurement of EBIDTA
The company has elected to present earnings before finance costs, exchange variation and derivative gains
& 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) for the period
and does not include finance costs, exchange variation and derivative losses, depreciation and amortisation
expenses, exceptional items and taxes.
(xxiv) Current versus non-current classification
All the assets and liabilities in the balance sheet are classified as current and non-current based on the below
mentioned factors except deferred tax assets and liabilities which is always classified as non-current. An asset
is classified as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period
All other assets are classified as non-current.
A liability is classified as current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
All other liabilities are classified as non-current.
(xxv) Fair value measurement
The company measures financial instruments, such as, derivatives of equity investments at fair value at each
balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.

60 60 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
(xxvi) Treasury shares
Own equity instruments (Treasury Shares) that are reacquired pursuant to scheme of amalgamation of Essar
Steel (Hazira) Limited and Essar Steel Orissa Limited are recognised at cost and deducted from equity. No gain
or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company’s own equity
shares. Any difference between the carrying amount and the consideration, if reissued, is recognised in equity.
4 List of critical estimates and judgments:
The preparation of Financial Statements in conformity with Ind AS which requires management to make estimates,
assumptions and exercise judgment in applying the accounting policies that affect the reported amount of assets,
liabilities and disclosure of contingent liabilities and contingent assets 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.
a) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of
disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for
similar assets or observable market prices less incremental costs for disposing of the asset. The value in use
calculation is based on a DCF model. The cash flows are derived from the budget for the period up to five years.
The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future
cash-inflows and the growth rate used for extrapolation purposes.
b) Control assessments for investment in associates
An entity is said to be an associate of an investor entity when the later has significant influence over the former.
There is a rebuttable presumption that significant influence exist if an investor holds 20% or more voting rights
in the investee entity. However demonstration of significant influence over an entity is a matter of judgment and
is not always evident from the percentage of voting rights.
c) Recognition of deferred tax assets for unused tax losses and unabsorbed depreciation
The Deferred Tax Assets has been recognized to the extent of reasonable certainty of sufficient future taxable
income against which such deferred tax assets can be realized. During the year, the Company has successfully
scaled up its operations with significant improvements in capacity utilization, sales and EBIDTA margins.
In order to address the transient liquidity challenge and further to ensure long term viability, the Company
has been in active discussions with its lenders for implementing a scheme of restructuring as per the RBI
guidelines. Mecon Limited, appointed by the lenders as an independent Techno Economic Viability consultant
for the purposes of restructuring, have submitted a draft report incorporating their assessment of the company’s
profitability in future years based on current performance and future potential. Considering these financial
projections in future years contained in the restructuring plan the management believes that there will be
sufficient future taxable income (post implementation of restructuring scheme) against which deferred tax asset
can be realized.
Meanwhile on 13th June 2017, RBI directed the lenders to refer certain companies including Essar Steel India
Ltd. to National Company Law Tribunal (NCLT) under Insolvency Bankruptcy Code (IBC), 2016. The Company
believes that upon implementation of suitable restructuring/Resolution plan, there would be reasonable certainty
of sufficient future taxable income.
d) Defined benefit obligation
The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves
making assumptions about discount rates, expected rate of return on assets, future salary increases and
mortality rates. Due to the long term nature of these plans such estimates are subject to significant uncertainty.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 61 61
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
e) Impairment of financial assets
The impairment provisions for financial assets disclosed are based on assumptions about risk of default and
expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to
the impairment calculation, based on the Company’s past history, existing market conditions as well as forward
looking estimates at the end of each reporting period.
f) Determination of functional currency
The Company determines its functional currency as INR since it is the currency that mainly influences the
prices of goods and also the prices are determined basis the economic environment prevalent in India. There
are exports which are denominated in US dollars, however this does not have a significant impact on the
Company. Also, major financing of the company is in INR.
g) Arrangements in the nature of Lease
The company applies Appendix C to Ind AS 17, to contracts entered with some entities to determine whether
the transaction is in the nature of lease or not. The Company has determined, based on an evaluation of the
terms and conditions of the arrangements, that such contracts are in the nature of operating/finance leases.
The assessment is done where the term of the agreement is for the major part of the estimated economic life
of the leased asset and present value of minimum lease payments amounts to at least substantially to all of
the fair value of the leased assets. Therefore, risks and rewards have substantially been not/transferred to the
Company, as a lessee, such arrangements are accounted for as finance lease.
5 Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”.
These amendments are in accordance with the recent amendments made by International Accounting Standards
Board (IASB) to IAS 7 “Statement of cash flows” and IFRS 2 “‘Share-based payment”, respectively. The amendments
are applicable to the Company from April 1, 2017.
Amendment to Ind AS 7
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and
non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance
sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the
requirements of the amendment and its effect on the financial statements.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of
cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-
settled awards. Market-based performance conditions and non-vesting conditions are reflected in the “”fair values””,
but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of
awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based
payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction,
the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award
that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The
cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not apply
to the Company.

62 62 41 st A N N U A L R E P ORT 2016-17
 6(a) Property, Plant & Equipment(` in Crore)
Particulars Freehold Leasehold Buildings Leasehold Plant and Leasehold Furniture Office Computers Vehicles Ships and Railway Railway Aircraft Total
Land Land Building Machinery Plant and and Equipment Vessels Sidings Sidings and
Machinery Fixtures and Wagons
Wagons under lease
Cost / Deemed Cost
As at 1st April 2015
(Note-3) 3,598.17 60.78 4,117.62 2.34 44,948.85 7.92 40.30 30.61 105.98 19.72 16.90 73.17 17.92 9.08 53,049.36
Additions - - 501.06 - 504.80 4,850.00 0.10 0.31 1.16 0.20 - - - - 5,857.63
Deletions - - 5.89 - 696.95 4,000.00 0.15 - 60.53 3.97 0.38 - - - 4,767.87
Effect of foreign currency
exchange differences - - 28.77 - 1,008.71 - - - - - - - - - 1,037.48
Borrowing cost
capitalised - - 340.42 - 333.96 - - - - - - - - - 674.38
As at 31st March 2016 3,598.17 60.78 4,981.98 2.34 46,099.37 857.92 40.25 30.92 46.61 15.95 16.52 73.17 17.92 9.08 55,850.98
Additions - 0.43 388.02 - 759.30 - - 0.08 0.66 - - - - - 1,148.49

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Deletions - - - - - - 7.67 8.64 0.01 0.39 - - - - 16.71
Effect of foreign currency
exchange differences - - - - (162.96) - - - - - - - - - (162.96)
As at 31st March 2017 3,598.17 61.21 5,370.00 2.34 46,695.71 857.92 32.58 22.36 47.26 15.56 16.52 73.17 17.92 9.08 56,819.80

Accumulated
depreciation
As at 1st April 2015
(Note-3) - 3.33 851.40 0.26 10,020.41 2.39 22.43 19.71 90.34 12.35 2.82 12.22 17.23 4.50 11,059.39
Charge for the year - 0.63 140.38 0.04 1,567.52 214.32 5.13 3.64 5.20 1.72 0.57 1.92 - 0.38 1,941.45
Disposals - - 0.71 - 117.43 200.00 0.09 - 59.89 3.82 0.24 - - - 382.18
As at 31st March 2016 - 3.96 991.07 0.30 11,470.50 16.71 27.47 23.35 35.65 10.25 3.15 14.14 17.23 4.88 12,618.66
Charge for the period - 0.63 177.65 0.04 1,646.25 56.88 4.14 2.72 3.53 1.45 0.56 1.92 - 0.38 1,896.15
Disposals - - - - - - 6.94 8.18 - 0.30 - - - - 15.42
As at 31st March 2017 - 4.59 1,168.72 0.34 13,116.75 73.59 24.67 17.89 39.18 11.40 3.71 16.06 17.23 5.26 14,499.39
Net book value
As at 31st March 2017 3,598.17 56.62 4,201.28 2.00 33,578.96 784.33 7.91 4.47 8.08 4.16 12.81 57.11 0.69 3.82 42,320.42
As at 31st March 2016 3,598.17 56.82 3,990.91 2.04 34,628.87 841.21 12.78 7.57 10.96 5.70 13.37 59.03 0.69 4.20 43,232.32
As at 1st April 2015
(Note-3) 3,598.17 57.45 3,266.22 2.08 34,928.44 5.53 17.87 10.90 15.64 7.37 14.08 60.95 0.69 4.58 41,989.97

Expected Useful Life of

the assets (years) NA NA 3-60 18-60 3-42 15-30 10 5 3-6 8-10 28 15-30 15 20
Method of depreciation NA NA SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM
Notes:
1. Railway Sidings and Wagons under lease are the railway wagons (at Gross value ) of ` 0.69 Crore given on operating lease to Railway Authorities under ‘Own your Wagon’
scheme .
Notes to Financial Statements for the year ended 31st March, 2017

2. Plant and machinery under lease includes equipments at Retail outlet of ` 1.05 Crore (at Gross Value) given on lease , depreciation debited to Statement of Profit and Loss
` 0.04 crore.
3. Net book value at 1st April, 2015 represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have been
Essar Steel India Limited

disclosed for the purpose of better understanding of the original cost of assets.
4. Certain property, plant and equipment are pledged against borrowings. The details relating to the same have been described in Note 68.

63 63
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
6(b) Intangible Assets
 (` in Crore)

Particulars Software
Cost / Deemed Cost
At 1st April 2015* 84.20
Additions 1.77
Deletions 0.58
At 31st March 2016 85.39
Additions 7.77
At 31st March 2017 93.16

Accumulated depreciation
At 1st April 2015* 59.89
Charge for the year 8.58
Disposals 0.56
At 31 March 2016
st
67.91
Charge for the period 6.91
At 31 March 2017
st
74.82
Net book value
At 31st March 2017 18.34
At 31st March 2016 17.48
At 1st April 2015* 24.31
Expected Useful Life of the assets (years) 3-6
Method of depreciation SLM

* Net book value represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation
from the previous GAAP have been disclosed for the purpose of better understanding of the original cost of assets.
Details of Depreciation are as follows: (` in Crore)

Particulars For the Year ended

31st March 2017 31st March 2016
Depreciation for the year as above 1,903.06 1,950.03
Less : Depreciation transferred to Expenditure incurred during the
construction period - 0.17
Depreciation as per Statement of Profit and Loss 1,903.06 1,949.86

64 64 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
7 Non-Current Investments in Subsidiaries and Associates
Particulars Face As at As at As at
Value 31st March, 2017 31st March, 2016 1st April, 2015
Units ` in Crore Units ` in Crore Units ` in Crore
(A) Investment in Subsidiaries
Unquoted Equity Shares
Essar Steel Middle East FZE Dubai AED 1 226 322.75 226 322.75 226 322.75
Mn

Odisha Slurry Pipe Line Infrastructure 10 - - - - 25,500,000 25.50

Limited
Essar Steel Logistics Limited 10 50,000 0.05 50,000 0.05 50,000 0.05

Essar Steel Offshore Limited $1 130,357,881 738.07 130,357,881 738.07 103,342,881 653.18

Paradeep Steel Company Limited 10 200,000 0.20 200,000 0.20 200,000 0.20

Essar Steel Trading FZE Dubai AED 1 14 17.61 14 17.61 14 17.61

Mn
Provision for Impairment (713.21) - -
Investment in Subsidiaries 365.47 1,078.68 1,019.29

(B) Investment in Associates

Unquoted Equity Shares
Bhander Power Limited 10 96,905,000 104.77 96,905,000 104.77 96,905,000 104.77

Essar Steel Chhattisgarh Limited 10 5,781,944 5.78 5,781,944 5.78 5,781,944 5.78

Essar Power MP Limited 10 68,900,000 68.90 68,900,000 68.90 68,900,000 68.90

Essar Steel Processing FZCO Dubai AED 2 0.25 2 0.25 2 0.25

0.1 Mn

Essar Bulk Terminal Limited 10 1,300,000 1.30 1,300,000 1.30 1,300,000 1.30

Essar Power Hazira Limited 10 2,600,000 2.60 2,600,000 2.60 2,600,000 2.60

Essar Power Orissa Limited 10 2,600,000 2.60 2,600,000 2.60 2,600,000 2.60
Investment in Associates 186.20 186.20 186.20
Non-Current Investments in 551.67 1,264.88 1,205.49
Subsidiaries and Associates
8 Other Investments
Particulars Face As at As at As at
Value 31st March, 2017 31st March, 2016 1st April, 2015
Units ` in Crore Units ` in Crore Units ` in Crore
Equity Instrument-Unquoted
Equity Shares
Essar Bulk Terminal Paradip Limited 10 2000 *** 2000 *** 2000 ***
(*** ` 20,000)

Essar Commvision Limited 10 20 # 20 # 20 #

(# ` 200 )
Essar Steel Jharkhand Limited 10 - - 95,000 0.10 95,000 0.10

Frontline Roll Forms Private Limited 10 250,000 0.25 250,000 0.25 250,000 0.25
Odisha Slurry Pipe Line 10 25,500,000 25.50 - - - -
Infrastructure Limited
Provision for Impairment (25.50)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 65 65
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Particulars Face As at As at As at
Value 31st March, 2017 31st March, 2016 1st April, 2015
Units ` in Crore Units ` in Crore Units ` in Crore
Equity Instrument- Quoted Equity
Shares
Essar Ports Limited 10 - - - - 2,547,223 31.32
Essar Shipping Limited 10 1,273,611 3.56 1,273,611 3.19 1,273,611 2.79
Debentures (Unquoted)
Essar Oil Limited (12.5% Secured 105 - - 1,226,300 10.17 1,226,300 12.10
Redeemable and Non Convertible )
AMW Auto Component Limited 1000 1,065,585 106.56 1,065,585 106.56 1,065,585 141.19
(Compulsory Convertible and
Cumulative )
Odisha Slurry Pipe Line 100 50,100,810 501.01 - - - -
Infrastructure Limited (Comp. Conv.
Debenture)
Provision for Impairment (607.57) (106.56) -
Investments in Unit Linked
Insurance Policy
ULIP Scheme of Canara HSBC 190,931 0.28 190,931 0.30 190,931 0.30
Oriental Bank of Commerce Life
Insurance Company Limited
4.09 14.01 188.05
Aggregate amount of Quoted 3.84 3.49 34.41
Investments
Aggregate amount of Unquoted 551.92 1,275.40 1,359.13
Investments
555.76 1,278.89 1,393.54

Investment in 71,830,001 shares of Essar Steel Offshore Limited, 96,905,000 shares of Bhander Power Limited and
1,273,611 shares of Essar Shipping Limited have been pledged with Banks as security for the borrowings.
Odisha Slurry Pipeline Infrastructure Limited ceased to be subsidiary w.e.f. 11th September, 2015.
9 Other Non Current Financial Assets
(Unsecured unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Security Deposit 151.82 138.99 132.65
Deposits with Banks with Maturity Period more than 12 months 18.35 40.57 4.92
(Refer note 15)
170.17 179.56 137.57

10 Other Non-Current Assets

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Capital Advances 474.69 458.37 461.96
Prepaid Expenses 3.24 12.71 20.30
477.93 471.08 482.26

66 66 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
11 Deferred Tax Assets (net)
Deferred Tax Asset/(Liability) Movement for FY 2015-16 (` in Crore)

Particulars As at Recognised/ Recognised in/ Recognised As at

1st April reversed reclassified in/reclassified 31 March
2015 through profit from other from Equity 2016
and loss comprehensive
income
Property, plant and equipment (7,187.59) (327.24) - - (7,514.83)
Carried forward business loss/ 8,162.04 1,990.42 - - 10,152.46
unabsorbed depreciation
Finance lease obligation - 293.12 - - 293.12
Deferred Gain on Finance Lease - 90.33 - - 90.33
Provision for doubtful Debts 2.48 113.42 - - 115.90
Cash Flow Hedge Reserve and 169.43 17.79 27.45 (163.30) 51.37
FCMITDA
Others 50.11 (10.25) 0.19 - 40.05
Net Deferred Tax 1,196.47 2,167.59 27.64 (163.30) 3,228.40

Deferred Tax Asset/(Liability) Movement for FY 2016-17 (` in Crore)

Particulars As at Recognised/ Recognised in/ Recognised As at
1 April reversed reclassified in/reclassified 31 March
2016 through profit from other from Equity 2017
and loss comprehensive
income
Property, plant and equipment (7,514.83) (380.19) - - (7,895.02)
Carried forward business loss/ 10,152.46 1,702.33 - - 11,854.79
unabsorbed depreciation
Finance lease obligation 293.12 9.66 - - 302.78
Deferred Gain on Finance Lease 90.33 (6.12) - - 84.21
Provision for doubtful Debts 115.90 (1.42) - - 114.48
Cash Flow Hedge Reserve and 51.37 1.65 3.46 (58.67) (2.19)
FCMITDA
Others 40.05 247.53 8.98 - 296.56
Net Deferred Tax 3,228.40 1,573.44 12.44 (58.67) 4,755.61

12 Inventories1

(Valued at lower of cost and net realizable value)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Raw Materials and components 158.69 247.79 214.71
Goods-in transit 91.09 197.73 350.70
Stock-in-trade 3.95 4.11 -
Stores and spares 328.87 348.80 391.06
Goods-in transit 19.55 7.50 8.74
Production Consumable 89.04 68.33 129.81
Goods-in transit 88.36 29.89 34.79
Fuel 22.20 13.49 8.31
Work-in-progress 1,157.86 967.42 1,275.55
Finished goods 613.01 440.49 275.98
2,572.62 2,325.55 2,689.65
1
Current Assets are pledged against borrowings,the details relating to which have been described in Note 68 pertaining to
borrowings.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 67 67
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Additional Information:
(a) Details of Inventory
Units As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Quantity ` in Crore Quantity ` in Crore Quantity ` in Crore
Opening Stock
Work in Progress*
Hot/Cold Rolled Coils, Sheets & MT 89,260 245.90 48,246 154.03 111,138 358.89
Plates
Pellets MT 467,988 197.47 376,785 252.66 401,304 268.36
 Hot Briquette Iron (including Fines) MT 19,395 19.38 7,771 10.97 8,125 10.31
Iron Ore -Middlings MT 3,690,393 215.03 3,682,451 463.93 3,681,879 358.48
Pipes MT 1,858 6.08 12,186 50.31 6,391 22.74
Other 283.56 343.65 245.84
967.42 1,275.55 1,264.62
Finished Goods
Hot/Cold Rolled Coils, Sheets & MT 121,334 424.25 65,822 259.84 169,409 647.82
Plates
Pipes MT 2,100 7.93 1,177 5.05 4,606 19.42
Other 8.31 11.09 15.25
440.49 275.98 682.49
Closing Stock
Work in Progress*
Hot/Cold Rolled Coils, Sheets & MT 97,988 334.33 89,260 245.90 48,246 154.03
Plates
Pellets MT 479,500 253.05 467,988 197.47 376,785 252.66
 Hot Briquette Iron (including Fines) MT 38,911 34.64 19,395 19.38 7,771 10.97
Iron Ore -Middlings MT 3,703,592 215.92 3,690,393 215.03 3,682,451 463.93
Pipes MT 1,033 4.41 1,858 6.08 12,186 50.31
Other 315.51 283.56 343.65
1,157.86 967.42 1,275.55
Finished Goods
Hot/Cold Rolled Coils, Sheets & MT 147,491 593.51 121,334 424.25 65,822 259.84
Plates
Pipes MT 1,881 9.03 2,100 7.93 1,177 5.05
Other 10.47 8.31 11.09
613.01 440.49 275.98
Traded Goods 3.95 4.11 -
* Work in Progress includes trial run inventory of NIL (Previous Year ` 3.13 Crore)
13 Trade Receivables1
(Unsecured unless otherwise stated)
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Debts outstanding for a period exceeding six months from the
date they are due for payment
Considered Good 134.84 559.87 262.93
Considered Doubtful 224.31 192.56 7.15
359.15 752.43 270.08
Less : Provision for Expected Credit Losses 224.31 192.56 7.15
134.84 559.87 262.93
Debts outstanding for a period less than six months from the 1,419.45 854.72 1,444.55
date they are due for payment
1,554.29 1,414.59 1,707.48

1
Current Assets are pledged against borrowings, the details relating to which have been described in Note 68 pertaining to
borrowings.

68 68 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
14 Cash and Cash Equivalents1
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Cash on hand 0.01 0.08 0.09
Balances with banks in Current Accounts 308.88 96.64 250.05
308.89 96.72 250.14

15 Other Bank Balances1

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Deposits with original maturity of less than three months 14.84 10.35 11.89
Deposits with original maturity for more than 3 months but less 150.04 51.12 116.84
than 12 months
Deposits with original maturity for more than 12 months 218.73 374.42 407.30
383.61 435.89 536.03
Deposits (including long term deposits in Other Non Current Assets with balance maturity period of more than 12
months) of ` 401.41 Crore (Previous Year ` 454.74 Crore), have been pledged with banks as a security for opening
Letters of Credit, Buyer’s Credit, Short Term Loans and against Bank Guarantee.
Details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December,
2016:
Amount in Rupees

Particulars SBN Other Denomination Notes Total

Closing Cash in Hand as on 08.11.2016 786,500 45,351 831,851
(-) Amount deposited in Banks (786,500) (149) (786,649)
Closing Cash in Hand as on 30.12.2016 - 45,202 45,202
Explanation: For the purposes of this clause, the term ‘Specified Bank Notes’(SBN) shall have the same meaning provided in
the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E),
dated 8th November, 2016.
1
Current Assets are pledged against borrowings, the details relating to which have been described in Note 68 pertaining to
borrowings.
16 Current Loans and Advances
(Unsecured and Considered good unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Inter Corporate Deposits (ICD) - Related Parties 386.01 1,301.42 1,113.63
Security Deposits 67.35 55.24 75.84
Loans and Advances to Staff 1.79 1.56 2.48
455.15 1,358.22 1,191.95
17 Derivative Financial Assets

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Derivative Financial Assets - Forward Contracts - 0.11 8.04
- 0.11 8.04

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 69 69
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
18 Other Current financial Assets
(Unsecured and Considered good unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Interest Accrued on ICDs, Loans & Deposits 10.63 9.43 -
Other Receivables 7.39 535.14 3,917.94
18.02 544.57 3,917.94
19 Other Current Assets
(Unsecured and Considered good unless otherwise stated)
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Deposits with Govt & Semi Govt 386.36 347.00 357.09
Loans and Advances to Suppliers 478.33 770.32 523.56
Claims Receivables 1,655.44 1,349.11 1,067.40
Export Benefit 121.30 98.48 98.38
Prepaid Expenses 34.95 27.56 56.77
2,676.38 2,592.47 2,103.20
20 Current Tax Assets (Net)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Advance Income Tax 59.37 39.33 30.56
59.37 39.33 30.56
21 Equity Share Capital
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Authorised
717,50,00,000 (Previous Year - 717,50,00,000) Equity Shares 7,175.00 7,175.00 7,175.00
of ` 10 each
100,000,000 (Previous Year - 100,000,000) 10% Cumulative 100.00 100.00 100.00
Redeemable Preference Shares of ` 10 each
7,275.00 7,275.00 7,275.00
Issued, Subscribed and Paid-up
3,108,957,660 (Previous Year 3,108,957,660) Equity Shares 3,108.96 3,108.96 3,108.96
of ` 10 each
Add: 4,520,703 (Previous Year 4,520,703) shares Forfeited 0.67 0.67 0.67
3,109.63 3,109.63 3,109.63

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

Equity Shares 31st March, 2017 31st March, 2016 1st April, 2015
Number ` in Crore Number ` in Crore Number ` in Crore
At the beginning of the year 3,108,957,660 3,108.96 3,108,957,660 3,108.96 3,108,957,660 3,108.96
Issued during the year - - - - - -
Outstanding at the end of the year 3,108,957,660 3,108.96 3,108,957,660 3,108.96 3,108,957,660 3,108.96

70 70 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
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.
c Shares held by Holding Company
Out of above equity shares, 2,240,939,040 equity shares (Previous year 2,155,213,248) 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 As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Number % of Holding Number % of Holding Number % of Holding
Equity Shares
Essar Steel Asia Holdings Limited1 2,240,939,040 72.08 2,155,213,248 69.32 2,153,587,448 69.27
Essar Steel Jharkhand Limited3 490,000,000 15.76 - - - -
Shares under Trust (Venkatraman Govind Raghavan) 191,517,500 6.16 191,517,500 6.16 191,517,500 6.16
Imperial Consultants & Securities 2,775,483 0.09 672,232,720 21.62 - -
Imperial Consultants & Securities Pvt. Limited2 - - - - 629,656,758 20.25
2,925,232,023 94.09 3,018,963,468 97.10 2,974,761,706 95.68

1. Number of shares includes 492,485,501 shares acquired from Essar Steel Limited, Mauritius and 85,725,792
shares acquired from Imperial Consultants & Securities, 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 89 of Companies Act, 2013 regarding beneficial ownership of such shares.
2. 2,775,483 shares acquired from Imperial Consultants & Securities Pvt. Limited, for which transfer of shares in
demat account is pending and in respect of such shares Imperial Consultants & Securities has made necessary
declaration under Section 89 of Companies Act, 2013 regarding beneficial ownership of such shares.
3. Number of shares includes 490,000,000 shares acquired from Imperial Consultants & Securities, for which
transfer of shares in demat account is pending and in respect of such shares Essar Steel Jharkhand Limited
has made necessary declaration under Section 89 of Companies Act, 2013 regarding beneficial ownership of
such shares.
22 Other Equity
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Capital Reserves 12.73 12.73 12.73
Capital Redemption Reserve 202.92 202.92 202.92
Securities Premium Account 7,814.61 7,814.61 7,814.61
Treasury Shares (766.07) (766.07) (766.07)
Revaluation Reserve 4,322.25 4,455.39 4,565.13
Hedging Reserve (Net of deferred tax) - (104.31) (361.01)
General Reserve 77.51 77.51 77.51
Foreign Currency Monetary Item Translation Difference (6.32) (11.08) (62.49)
Account
Retained Earnings (14,324.43) (9,259.99) (5,012.77)
Other Comprehensive Income (13.48) 2.91 -
(2,680.28) 2,424.62 6,470.56
Treasury Shares
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.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 71 71
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Hedging Reserve
The Company designates certain Principal Only Swaps (POS) contracts in a cash flow hedging relationship by applying
the hedge accounting principles. 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 in
the other comprehensive income in cash flow hedging reserve within equity (net of applicable deferred taxes) and the
ineffective portion is recognised immediately in the profit and loss.
General reserve
The reserve is a distributable reserve maintained by the Company.
23 Non Current Borrowings

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Secured (Refer Note 68 )
Non Convertible Debentures of 131.09 259.67 321.61
` 10,00,000 each
Term Loans
From Banks 14,577.19 18,196.32 19,283.95
From Others 2,757.99 1,349.01 1,421.79
17,335.18 19,545.33 20,705.74
Buyers Credit Capex - - 51.12
Unsecured
Dollar / Rupee Notes
From Banks - 213.26 208.65
From Others - 0.44 1.28
Redeemable Preference Shares 21.62 61.14 55.35
Sales Tax Deferral Loan 31.74 33.32 33.32
Finance lease obligation 823.72 837.89 2.84
Inter corporate Deposit Received
Related Parties - 32.44 717.26
Others - 14.05 310.00
18,343.35 20,997.54 22,407.17
There have been certain delays in repayments of term loans principal amounting to ` 1,989.05 Crore (less than 90 days),
` 8,660.35 Crore (more than 90 days) and Interest of ` 1,062.74 Crore (less than 90 days), ` 2,470.51 Crore (more
than 90 days) as on 31.03.2017. Company is in discussion with banks for a suitable restructuring of its loans.
24 Other Non Current Financial Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Advance from Customer against Export Performance Bank - - 6,985.98
Guarantee
- - 6,985.98

72 72 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
25 Non Current Derivative Financial Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Cross Currency Interest Rate Swap 21.74 30.49 28.54
Principal Only Swap - 30.17 191.32
21.74 60.66 219.86
26 Other Non Current Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Deferred gain 225.62 243.32 2,653.38
Advance against Sale of Property, Plant & Equipment - - 750.00
225.62 243.32 3,403.38
27 Non Current Provisions

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Provision for employee benefits
Gratuity 23.75 23.38 23.29
Leave Encashment 13.84 13.04 20.65
37.59 36.42 43.94
28 Current Borrowings
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Secured (Refer Note 68 )
Loans From Banks 118.03 101.28 100.00
Working Capital Loans - From Banks 8,764.82 5,597.29 2,026.02
Buyers' credit for Operational use - 516.31 1,085.27
Acceptance for Capital Expenditures 7.14 14.07 36.14
Acceptance for Goods and Expenses 828.12 2,084.35 3,030.51
Liability for Bills Discounting - - 430.94
Unsecured
Inter corporate Deposit
Related Parties 2,840.11 3,575.30 1,595.26
Others 145.38 35.93 97.76
12,703.60 11,924.53 8,401.90
29 Trade Payables

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Trade Payables for Goods and Expenses 3,694.31 3,202.77 2,391.08
Accrued Liabilities and Provisions 1,147.35 1,098.38 1,262.79
4,841.66 4,301.15 3,653.87

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 73 73
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
30 Current Derivative Financial Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Forward Contracts 3.13 33.30 6.90
Principal Only Swap - 127.05 354.98
Cross Currency Interest Rate Swap 3.11 2.47 -
Rupee Indexed Interest Rate Swaps - - 0.77
6.24 162.82 362.65
31 Other Current Financial Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Current maturities of long-term debt (Refer Note 68) 8,061.72 3,499.46 1,893.30
Current maturities of finance lease obligations 71.22 33.56 1.91
Creditors for Capital Expenditures 696.11 251.24 263.24
Advance against Export Performance Bank Guarantee - 911.51 967.85 283.24
Current (Refer Note 68)
Security Deposits Received 5.53 5.57 5.42
Invoked Advance against Export Performance Bank 7,056.88 6,970.05 -
Guarantee (Refer Note 68)
Invoked Standby Letter of Credit (Refer Note 68) 459.66 - -
Other Liabilities 5,071.07 270.00 192.37
22,333.70 11,997.73 2,639.48
32 Other Current Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Advances from Customers 1,141.70 3,775.89 4,220.92
Deferred gain 17.70 17.70 139.65
Statutory Liabilities 274.53 286.87 157.48
1,433.93 4,080.46 4,518.05
33 Current Provisions

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Provision for employee benefits
Leave Encashment 3.04 3.54 5.28
Indirect Taxes (Refer Note 65) 19.73 19.73 19.73
Provision against losses on unwinding of sale of Business - 1,249.76 -
undertaking
22.77 1,273.03 25.01

74 74 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
34 Revenue from Operations
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Sale of products (Inclusive of Excise Duty) 21,610.98 14,816.62
Sale of services 53.49 19.84
Other operating revenues 98.99 86.74
21,763.46 14,923.20
35 Other Income
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Interest Income on Financial Instrument measured at
Amortised Cost
Inter Corporate Deposits 58.54 64.21
Bank Deposits 23.26 46.21
Others 31.43 54.51
Rent 22.58 21.88
Profit on sale of Investments 25.03 -
Interest on Swaps 15.80 31.71
Gain Due to change in classification of lease - 254.83
Amortisation of Deferred Gain 17.70 4.42
Profit on sale of Property, Plant & Equipment - 0.08
Miscellaneous Income 1.92 2.04
196.26 479.89
36 Cost of Materials Consumed
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Raw Materials Consumed 10,222.56 7,523.59
Production Consumables 1,685.49 1,348.18
Excise Duty* 35.47 65.56
11,943.52 8,937.33

* Represents differential excise duty in respect of closing stock and opening stock, etc.
Details of Raw Material and Components Consumed
Consumption of Raw Materials Units Year Ended Year Ended
31st March, 2017 31st March, 2016
Quantity ` in Crore Quantity ` in Crore
Iron Ore Fines MT 11,108,488 2,219.96 6,843,497 1,439.51
Pellets MT 846,476 504.59 738,887 474.07
Iron Ore Lump MT 193,704 96.60 594,218 336.37
Zinc MT 20,691 378.78 17,403 250.84
Natural Gas used for HBI/DRI SM3 813,616,768 1,825.20 244,769,188 584.74
Coal MT 2,149,327 1,646.71 1,975,012 1,268.36
Coke MT 1,180,772 1,450.60 1,072,880 1,295.52
HRC/ Plate Consumed MT 4,260 16.08 68,635 227.25
Slab MT 196,790 517.52 138,860 374.60
Others/ Cost transfer to CWIP 1,566.54 1,272.33
10,222.56 7,523.59

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 75 75
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
37 Energy Cost

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Petroleum Products - Fuel 735.81 436.80
Power and Water Charges 2,293.91 1,456.23
3,029.72 1,893.03

38 (Increase)/Decrease in Inventories of Finished Goods, Work in Progress and Stock in Trade

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Opening Stock
Finished Goods 440.49 275.98
Work-in-Progress 967.42 1,275.55
Traded Goods 4.11 1,412.02 - 1,551.53
Closing Stock
Finished Goods 613.01 440.49
Work-in-Progress 1,157.86 964.30
Traded Goods 3.95 1,774.82 4.11 1,408.90
(362.80) 142.63

39 Employee Benefits Expense

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Salaries 305.30 353.91
Contribution to Provident and Other Funds 25.53 28.01
Staff Welfare Expenses 62.99 70.79
393.82 452.71
40 Manufacturing & Asset Maintenance

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Repairs, Maintenance and Equipment Hire Charges 526.33 394.21
Stores and Spares 464.47 291.05
Labour and Sub Contracting Charges 249.00 211.84
Plant Insurance 19.69 18.91
1,259.49 916.01

76 76 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
41 Administrative Expenses
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Traveling, Conveyance and Vehicle Hire & Maint. Charges 29.32 43.82
Printing, Stationery, Postage and Telephone 11.73 12.05
Professional Fees 78.61 153.49
Operating Lease Rent 50.62 44.72
Repairs, Maintenance - Other than Plant 16.81 12.39
Insurance - Other than Plant 3.90 5.19
Rates and Taxes 15.78 22.67
Auditor's Remuneration* 2.16 2.07
Loss on sale/disposal/write off of Property Plant & Equipment 1.30 0.84
Allowance for Doubtful Debt 8.20 221.18
Miscellaneous Expenses 73.34 51.93
Provision for Impairment in Investment - 106.56
291.77 676.91
*Auditor's Remuneration
Audit Fees 2.00 2.00
Other Services 0.16 0.07
2.16 2.07
42 Selling & Distribution Expenses
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Sales Commission 96.65 69.38
Freight Outward (Net), Intercarting and packing charges 439.45 334.49
Other selling expenses 20.21 51.85
556.31 455.72
43 Finance Cost
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Guarantee and Other Bank Charges 227.17 561.00
Interest
on Term Loans 3,543.13 2,295.49
on Debentures 38.82 19.68
on Export Performance Bank Guarantees 23.11 125.51
on Finance Lease Obligations 143.95 159.61
on Inter Corporate Deposits 36.35 398.14
to Banks and Others 1,570.72 1,049.48
5,356.08 4,047.91
Dividend on Preference Shares 6.40 5.80
Exchange Variation on Borrowings 18.14 236.87
5,607.79 4,851.58
44 Exchange Variation & Derivative Losses(net)
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Exchange Variation (net) 57.10 (18.28)
Loss/(Gain) on cancellation of Derivative and Forward 176.75 433.06
Exchange Contracts
Mark to Market on derivative contract (40.36) 31.69
193.49 446.47

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 77 77
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
45 Exceptional Items

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Impairment in Subsidiaries (Refer Note 66) (2,334.19) -
Others 415.79 223.90
(1,918.40) 223.90
46 Income Tax Expense
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Current Tax
Excess Provision of Earlier Years (Net) (10.95) -
Deferred Tax
Effect of Tax of Earlier Years (13.84) 68.64
Deferred Tax Charge / (Credit) (1,559.60) (2,236.23)
(1,584.39) (2,167.59)

 econciliation of tax expense and the accounting profit multiplied by

R
India’s tax rate
Loss before Tax as per Books (6,781.97) (6,524.55)

Tax expenses on above PBT @ 34.608% (2,347.10) (2,258.02)

Deferred Tax Assets not recognised 761.03 -
Effect of Tax of earlier years (24.79) 68.64
Tax Effect of amount which are not deductible (taxable) in calculating taxable 24.85 17.84
Income:
Others 1.62 3.95
Income Tax Expenses - Charge / (Credit) (1,584.39) (2,167.59)

47 Other Comprehensive Income

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
A (i) Items that will not be reclassified to profit or loss
Gain on sale of Investments - 2.56
Fair Value Changes on Financial Assets (25.14) 0.40
Actuarial (Loss) / Gain on DBO (0.23) (0.23)
(25.37) 2.73
(ii) Income tax relating to items that will not be reclassified to
profit or loss
Gain on sale of Investments - (0.01)
Fair Value Changes on Financial Assets 8.90 0.12
Actuarial (Loss) / Gain on DBO 0.08 0.08
8.98 0.19
B (i) Items that will be reclassified to profit or loss
Cash flow hedges - Effective portion of changes in fair value - (14.26)
Cash flow hedges - Transfer to Profit & Loss (9.99) (65.08)
(9.99) (79.34)

78 78 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
(ii) Income tax relating to items that will be reclassified to profit
or loss
Cash flow hedges - Effective portion of changes in fair value - 4.93
Cash flow hedges - Transfer to Profit & Loss 3.46 22.52
3.46 27.45
48 Financial Instruments and Risk Management
A Financial Instruments - Categories ` in Crore

Particulars As at 31st March, 2017 As at 31st March, 2016 As at 1st April, 2015
FVOCI FVTPL Amortised FVOCI FVTPL Amortised FVOCI FVTPL Amortised
Cost Cost Cost
Financial Assets:
Investment in Equity 3.56 0.53 551.67 3.19 0.65 1,264.88 34.11 0.65 1,205.49
Shares and ULIP
Investment in - - - - - 10.17 - - 153.29
Debentures
Trade Receivable - - 1,554.29 - - 1,414.59 - - 1,707.48
Cash and Bank - - 692.50 - - 532.61 - - 786.17
balances
Other Financial Assets - - 643.34 - - 2,082.35 - - 5,247.46
Derivative Financial - - - - 0.11 - - 8.04 -
Assets
Total Financial Assets 3.56 0.53 3,441.80 3.19 0.76 5,304.60 34.11 8.69 9,099.89
Financial Liabilities:
Borrowings incl. current - - 38,284.95 - - 35,583.63 - - 32,699.54
maturities
Finance lease obligation - - 894.94 - - 871.46 - - 4.75
Trade and Other - - 5,537.77 - - 4,552.39 - - 3,917.11
Payables
Other Financial - - 13,504.65 - - 8,213.47 - - 7,467.00
Liabilities
Derivative Financial - 27.98 - 157.22 66.26 - 546.30 36.21 -
Liability
Total Financial - 27.98 58,222.31 157.22 66.26 49,220.95 546.30 36.21 44,088.40
Liabilities

B Fair Value Hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For the company, the fair
valuations in this level of hierarchy include listed equity instruments. The fair value of all equity instruments which are
traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example derivatives) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible
on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2. The fair valuations in this level of hierarchy for the company mainly include derivatives.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. The Company does not have any financial assets and liabilities under this category.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 79 79
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Fair Value Hierarchy for Financial Assets & Liabilities measured at Fair Value -
Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial Assets
Investment in Equity Shares 3.56 0.28 0.25 3.19 0.30 0.35 34.11 0.30 0.35
and ULIP
Derivative Financial Assets - - - - 0.11 - - 8.04 -
3.56 0.28 0.25 3.19 0.41 0.35 34.11 8.34 0.35
Financial Liabilities
Derivative Financial Liability - 27.98 - - 223.48 - - 582.51 -
- 27.98 - - 223.48 - - 582.51 -

Fair Value of Financial Assets and Liabilities measured at Amortised Cost for which Fair Values are disclosed -
Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Fair Value Carrying Fair Value Carrying Fair Value Carrying
Value Value Value
Financial Assets
Other Non Current Financial Assets 168.80 170.16 180.92 179.56 137.24 137.57
168.80 170.16 180.92 179.56 137.24 137.57
Financial Liabilities
Borrowings 38,278.83 38,284.96 35,595.56 35,583.64 32,696.54 32,699.52
Finance lease obligation 1,140.25 894.94 1,084.62 871.46 4.75 4.75
39,419.09 39,179.90 36,680.18 36,455.10 32,701.29 32,704.27
The carrying amounts of all other financial assets and liabilities are considered to be the approximately equal to their fair
values.
The fair values as disclosed above are calculated based on discounted cash flows using a rate that reflects market risk.
The fair values of borrowings are based on discounted cash flows using a current borrowing rate.
C Financial Risk Management
The company is exposed to various risks in relation to financial instruments. The main types of risks are credit risk,
liquidity risk and market risk. In order to minimise any adverse effects on the financial performance of the company
due to market risks, the company enters into various derivative contracts. Derivatives are taken only to mitigate the
risk and not for speculative purposes.
The company’s risk management is carried out by the Risk Department under policies approved by the board of
directors. The board provides written principles for overall risk management, as well as policies covering specific areas.
- Credit risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The
company is exposed to credit risk from investments measured at amortised cost, deposits with banks and other
parties, trade receivables, inter-corporate deposits, loans and advances to staff and derivative contracts.
The Company periodically assesses the financial reliability of the counter party, taking into account the financial
condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual
limits are set accordingly. Investments at Amortised Cost are strategic investments in associated lines of business
activity, the company closely monitors the performance of these Companies. Bank deposits are placed as collateral
/ margin money etc to avail much larger fund & non-fund based facilities from Banks / Financial Institutions. Hence,
there is no significant credit risk on such fixed deposits.
Trade Receivable: The Company trades with recognized and creditworthy third parties. It is the Company’s policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.
Also the company does not enter in to sales transaction with customers having credit loss history. There are no
significant credit risks with related parties of the Company.
The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with
respect to trade receivables is mitigated by the Company’s large customer base. Credit risk in majority of cases are
mitigated by letter of credit/ Advances from the customer.
- Liquidity risk
Liquidity risk is that the company might be unable to meet its obligations. Liquidity risk arises from mismatch in maturity
profile of receipts and payments, funds locked in excess inventories and where no additional funds are obtained.

80 80 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
The liquidity risks are dynamically managed through efficient scheduling of receipts and payments. Banks are
monitoring all the cash flows through Trust & Retention Account (TRA) mechanism and payment are pre-vetted by TRA
Auditors appointed by the Lenders. Liquidity risks arising from excess inventory are managed through a mix of efficient
supply chain management and just-in-time production schedules. Please refer note 64 for proposed restructuring of
borrowing and other financial liabilities.
The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual
maturities for:
Particulars As at 31st March, 2017
(` in Crore)
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 20,830.39 1,978.54 7,336.19 8,287.66 38,432.78
Trade and Other Payables 5,537.77 - - - 5,537.77
Finance lease obligation 214.24 157.06 470.13 1,395.33 2,236.76
Other Financial Liabilities 13,512.56 - - - 13,512.56
Derivative Financial Liability 6.24 3.11 14.19 3.73 27.98
Total 40,101.20 2,138.71 7,821.23 9,686.71 59,747.85

Particulars As at 31st March, 2016

(` in Crore)
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 15,502.91 3,014.35 6,639.98 10,619.38 35,776.62
Trade and Other Payables 4,552.40 - - - 4,552.40
Finance lease obligation 178.01 157.06 470.13 1,552.04 2,357.24
Other Financial Liabilities 8,222.38 - - - 8,222.38
Derivative Financial Liability 162.83 31.82 17.31 11.54 223.49
Total 28,618.52 3,203.23 7,127.42 12,182.96 51,132.13

Particulars As at 1st April, 2015

(` in Crore)
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 10,370.97 4,579.10 8,105.94 9,885.42 32,941.43
Trade and Other Payables 3,917.11 - - - 3,917.11
Finance lease obligation 1.92 0.70 1.05 27.88 31.56
Other Financial Liabilities 480.45 279.05 1,503.66 5,281.79 7,544.95
Derivative Financial Liability 362.65 97.10 96.36 26.40 582.51
Total 15,133.10 4,955.95 9,707.03 15,221.49 45,017.56
- Market risk
The Company is exposed to substantial Financial Market Risks in its operations on account of:
• Foreign currency exchange risk
• Interest rate risk
• Commodity price risk
The Board has put in place detailed Market Risk Management Policy (RMP) documents and the market risks are managed
by various functionaries in terms of these Policy documents.
- Foreign Currency risk
The company is exposed to foreign exchange risk arising from export sales, operating and capital expenditure in foreign
currency, foreign currency loans and economic exposure on account of mismatch between foreign currency and INR assets
and liabilities. The risk is measured through a forecast of highly probable foreign currency cash flows.
The company enters into hedging transactions mainly to hedge the significant foreign exchange risks from concluded and
committed export sales, operating and capital expenditures and the foreign currency borrowings.
The company is mainly exposed to exchange risk from foreign currencies - USD, EUR and AED.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 81 81
 (a) The company’s exposure to foreign currency risk at the reporting date (expressed in ` Crore) is as follows:

82 82
(` In Crore)
st st st
Particulars As at 31 March, 2017 As at 31 March, 2016 As at 1 April, 2015
USD EUR AED Others Total USD EUR AED Others Total USD EUR AED Others Total
Trade Receivables 786.64 30.94 - - 817.58 434.18 27.96 3.54 - 465.68 293.93 6.23 1.08 - 301.25
Cash and Bank 1.79 - - - 1.79 1.73 - - - 1.73 1.04 - - - 1.04
balances
Other Financial Assets 372.99 - - - 372.99 1,176.84 - - - 1,176.84 1,113.62 - - - 1,113.62
Financial Assets 1,161.42 30.94 - - 1,192.36 1,612.75 27.96 3.54 - 1,644.25 1,408.59 6.23 1.08 - 1,415.91
Essar Steel India Limited

Covered by Derivative - - - - - - - - - - - - - - -
Contracts
Net Exposure to 1,161.42 30.94 - - 1,192.36 1,612.75 27.96 3.54 - 1,644.25 1,408.59 6.23 1.08 - 1,415.91
Foreign Currency risk
on Financial Assets
Borrowings 7,443.23 0.08 - - 7,443.31 7,940.09 18.50 - 1.90 7,960.48 8,847.51 50.18 5.76 - 8,903.45
Derivatives - - - - - 467.50 - - - 467.50 1,649.00 - - - 1,649.00
Trade and Other 790.95 81.88 77.20 3.53 953.56 667.33 83.30 119.89 3.38 873.91 488.45 89.86 28.37 2.99 609.67
Payables
Other Financial 919.42 - - - 919.42 976.76 - - - 976.76 7,347.17 - - - 7,347.17
Liabilities
Financial Liabilities 9,153.60 81.96 77.20 3.53 9,316.29 10,051.68 101.80 119.89 5.28 10,278.65 18,332.14 140.03 34.13 2.99 18,509.29
Covered by Derivative 57.52 - - - 57.52 1,554.15 11.19 - 1.90 1,567.23 1,239.44 26.67 - - 1,266.11
Contracts
Net Exposure to 9,096.08 81.96 77.20 3.53 9,258.77 8,497.53 90.62 119.89 3.38 8,711.41 17,092.70 113.36 34.13 2.99 17,243.18
Foreign Currency risk
on Financial Liabilities
Notes to Financial Statements for the year ended 31st March, 2017

41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(b) Sensitivity
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated
financial instruments and the impact on Other Comprehensive Income arises from application of hedge accounting on
certain derivative contracts.
` in Crore
Particulars Impact on Profit/(Loss)* Impact on Other Comprehensive Income
As at As at As at As at
31st March, 2017 31st March, 2016 31st March, 2017 31st March, 2016
USD sensitivity
Increase by 5% (400.52) (245.74) - (30.94)
Decrease by 5% 400.52 245.74 - 30.94
EUR sensitivity
Increase by 5% (2.55) (3.13) - -
Decrease by 5% 2.55 3.13 - -
AED sensitivity
Increase by 5% (3.86) (5.82) - -
Decrease by 5% 3.86 5.82 - -
Others sensitivity
Increase by 5% (0.18) (0.17) - -
Decrease by 5% 0.18 0.17 - -
* Sensitivity impact on Profit/(Loss) includes increase/decrease of ` 315.78 Crore (Previous Year - ` 323.27 Crore)
pertaining to exposures for which the company has the policy of capitalising exchange differences to reserves -
FCMITDA or eligible items of Property, Plant and Equipment will be amortised to the statement of profit and loss over
the period of the underlying borrowing or remaining useful life of Property, Plant and Equipment.
- Interest rate risk

The interest rate exposure is mainly on account of floating interest rates where the company is exposed to upward
movements in the interest rates. The company explores possibility of interest rate swaps and interest rate structures
to hedge its risks.
(a) Interest rate risk exposure

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Variable Rate Borrowing 30,799.01 30,614.07 28,089.62
Other Financial Liabilities 9,295.66 7,796.88 7,245.12
Total Exposure 40,094.67 38,410.95 35,334.74

(b) Sensitivity

Particulars 31st March, 2017 31st March, 2016

Impact on Company’s Profit/ Loss If interest rates had been 50 basis points 200.47 192.05
higher / lower and all other variables were held constant.
1. The sensitivity analyses above have been determined based on the exposure to interest rates for
floating rate liabilities assuming the amount of the liability outstanding at the year-end was outstanding
for the whole year.
2. Sensitivity impact on profit /Loss includes impact pertaining to exposures for which the company
capitalises the borrowing cost to items of Property Plant and Equipment, which will be amortised to the
statement of profit and loss over the period of remaining useful life of property plant and equipments.
- Price risk
Commodity price risk
The Company has exposure to Commodity Price Risk on its raw materials required for Steel production and also on
its finished products (Steel and its variants). The Risk Department reviews the exposures, evaluates and hedges the
commodity price risks in close co-ordination with the Group Treasury in terms of the Board approved Policy document.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 83 83
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
The Company hedges directly with International Commodity Exchanges and / or through International counterparties
using OTC derivative contracts based on appropriate Index / Exchange Listed Contracts.
As at the reporting date there are no outstanding commodity derivative contracts and hence the disclosures for
sensitivity has not been given.
Other price risks
The company’s exposure to price risks from investments in equity shares is considered immaterial.
49 Capital Management
The Company operates in a capital intensive industry. The objective of the Company’s capital management policies is
to maintain an optimal Capital Structure to reduce the Cost of Capital.
The Company’s capital requirement is mainly to fund capital expansion and fund the working capital requirement. The
Company sets the amount of Capital required on the basis of annual business plan and Long-Term operating plans.
The funding requirement is met through long term and short term borrowings along with internal accruals in the most
optimum manner.
50 Segment Information
The Company is in the business of manufacturing steel products having similar economic characteristics, primarily
operated in India. The information relating to revenue from external customers and location of non-current assets of
its single reportable segment has been disclosed as below:
Information about Revenue from Products and Services:

Products Unit Year Ended Year Ended

31st March, 2017 31st March, 2016
Quantity ` in Crore Quantity ` in Crore
Pellets MT 1,523,929 854.79 1,492,569 737.92
Hot Briquette Iron Fines MT 18,618 10.43 5,478 4.13
Hot/Cold Rolled Coils, Sheets and Plates MT 5,202,450 18,004.98 3,466,279 11,470.68
Pipes MT 109,662 460.31 211,958 1,014.94
Others 270.36 152.86
Total Products Sales (A) 19,600.87 13,380.53
Traded Goods
TMT Bars MT 48,253 153.26 48,919 166.07
Others - 2.30
Total Traded Goods (B) 153.26 168.37
Less: Trial Run Sales (Including Excise Duty) (C) - (1.07)
Add: Excise Duty on Sales (D) 1,856.85 1,268.79
Total Sale of products (Inclusive of Excise Duty) 21,610.98 14,816.62
(A)+(B)-(C)+(D)
Sale of services 53.49 19.84
Other operating revenues 98.99 86.74
Revenue from Operations 21,763.46 14,923.20

(` in Crore)
Geographical Information Year ended 31st March, 2017 Year ended 31st March, 2016
India Outside Total India Outside Total
India India
Revenues (Income from operation) 16,836.05 4,927.41 21,763.46 12,921.10 2,002.10 14,923.20
Carrying amount of Non Current assets (other
than financial instruments and deferred tax
assets) 45,808.04 1,081.64 46,889.68 6,035.26 1,082.35 47,117.61

84 84 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
51 Derivative Instruments

Sr Type of Transaction Amount Amount Amount Currency Purpose

No.
1 Principal Only Swap
2 Cross Currency Interest
Rate Swap
3 Rupee Indexed Interest
Rate Swaps (Overnight
Index Swap)
4 Forward purchase contracts
(USD / INR)
5 Forward purchase contracts
(USD / INR)
6 Forward purchase contracts
(USD / INR)
7 Forward purchase contracts
(USD / INR)
8 Forward purchase contracts
(EURO/INR)
9 Forward purchase contracts
(EURO/INR)
10 Forward purchase contracts
(CAD/INR)
11 Forward sale contracts
(USD / INR)
12 Cross Currency EURO/USD
Forward purchase contracts
13 Cross Currency EURO/USD
Forward sale contracts
31st March 31st March 1st April
2017 2016 2015
- 4,675,000,000 16,490,000,000 INR To hedge the economic
exposure on future dollar-
linked sales.
925,000,000 975,000,000 1,000,000,000 INR To convert floating rate
Rupee Term Loan into a
floating rate synthetic USD
Liability (equivalent of FC
Loan)
- - 500,000,000 INR To reduce the interest cost
on Long Term Rupee Term
loan
8,870,927 55,785,533 33,947,020 USD To hedge the exchange
risk on Letter of credit/
Acceptance.
- 85,605,518 11,730,000 USD To hedge the exchange
risk on Sundry Creditors.
- 72,767,125 156,828,618 USD To hedge the exchange
risk on Buyers Credit.
- 33,200,000 - USD To hedge the exchange
risk on Interest on Credit
facilities
- 599,610 - EUR To hedge the exchange
risk on letter of credit/
acceptance
- 889,925 - EUR To hedge the exchange
risk on Buyers Credit.
- 370,430 - CAD To hedge the exchange
risk on letter of credit/
acceptance
- - 255,000,000 USD To hedge the exchange
risk on export receivables
- - 3,950,550 EURO To hedge the exchange
risk on BC Payables
- - 3,500,000 EURO To hedge the exchange
risk on export receivables

52 Related Party disclosures:

List of related parties and relationships
(a) Holding Companies
1 Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Ltd) Holding Company- (ESAHL)
2 Essar Steel Mauritius Limited – Intermediate Holding Company - (ESML)
3 Essar Global Fund Limited (FKA Essar Global Limited), Cayman Islands – Ultimate Holding Company
(EGFL)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 85 85
 Essar Steel India Limited
Notes to Financial Statements for the year ended 31st March, 2017
(b) Subsidiaries
1 Essar Steel Middle East FZE (ESMEF)
2 Essar Steel Offshore Limited. (ESOSL)
3 Essar Steel Trading FZE (ESTF)
4 Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL)
(Ceased to be subsidiary w.e.f 21.05.2015)
5 Paradeep Steel Company Limited. (PSCL)
6 Banner Coal Terminal LLC *
7 Bear Fork Resources LLC *
8 Deep Water Resources LLC *
9 Essar Mineral Cooperatief U.A. *
10 Essar Minerals Canada Limited *
11 Essar Minerals INC *
12 Essar Minerals Limited (FKA Essar Mining Limited) * 28 Trinity Coal Corporation *
13 Essar Steel Logistics Limited (ESLL)
14 Essar Steel UAE Limited*
15 Falcon Resources LLC *
16 Frasure Creek Mining LLC *
* These are step down subsidiaries of direct subsidiaries of the Company.
(c) Fellow Subsidiaries (with whom transactions have taken place)
1 Aegis Limited (AEGIS)
2 AGC Networks Limited (AGCNL)
3 Arkay Logistics Limited (ALL)
4 Energy II Limited (EII)
5 Equinox Business Parks Pvt Limited (EBPPL)
(ceased to be fellow subsidiary from 13.12.2016)
6 Essar Bulk Terminal (Salaya) Limited (EBTSL)
7 Essar Bulk Terminal Paradip Limited (EBTPL)
8 Essar Electric Power Development Corporation
Limited (EEPDCL)
9 Essar Energy Limited (FKA Essar Energy Plc)
(EEPLC)
10 Essar Energy Overseas Limited (EEOL)
11 Essar Mineral Resources Limited (EMRL)
12 Essar Offshore Subsea Limited (EOSL)
13 Essar Oil Limited (EOL)
14 Essar Oilfields Services India Limited (EOSPL)
15 Essar Ports Limited (EPL)
16 Essar Ports Limited, Mauritius ( FKA Essar Africa
Holdings Limited) (EAHL)
17 Essar Power (Jharkhand) Limited (EPJL)
18 Essar Power Gujarat Limited (EPGL)
19 Essar Power Limited. (EPOL)
(d) Associates
1 Bhander Power Limited. (BPOL)
2 Essar Bulk Terminal Limited. (EBTL)
3 Essar Power ( Orissa) Limited. (EPOOL)
4 Essar Power Hazira Limited (EPHL)
86 86
17 Hazira Coke Limited (HCL)*
(ceased to be related party w.e.f 15.04.2016)
18 Hughes Creek terminal LLC *
19 Levisa Fork Resources LLC *
20 Little Elk Mining Company LLC *
21 New Resources Inc. (NRI)*
22 New Trinity Coal Inc. (NTCI)*
23 New Trinity Holding LLC (NTHL)*
24 North Springs Resources LLC *
25 Prater Branch Resources LLC *
26 PT Essar Indonesia (PTEI)*
27 RMG INC *
29 Trinity Coal Marketing LLC (EMA) *
30 Trinity Coal Partners LLC *
31 Trinity Parent Corporation *
32 Trinity RMG Holding LLC *
20 Essar Power Transmission Company Limited
(EPTCL)
21 Essar Project (India) Limited (EPIL)
22 Essar Projects Limited (EPLD)
23 Essar Shipping & Logistics Limited (ESALL)
24 Essar Shipping Limited (ESL)
25 Essar Steel Algoma Inc (ESA-INC)
26 Essar Steel Limited (FKA Essar Steel Holdings
Limited) (ESTLM)
27 Essar Steel Marketing Limited (EPML)
28 Essar Telecom Kenya Limited (ETKL)
29 Essar Vizag Terminal Limited (EVTL)
30 Ibrox Aviation and Trading Pvt. Ltd. (IV)
31 Jade Global Services FZE(FKA Essar Global
Services FZE)(EGSF)
32 Peak Trading Overseas Limited (PTOL)
33 Peakom SA (PKOM) (Ceased to be fellow
subsidiary w.e.f 24.02.2017)
34 The Mobilestore Services Private Limited.
(TMSSL)
35 Vadinar Oil Terminal Limited (VOTL)
36 Vadinar Ports & Terminal Limited (VPTL)
37 Vadinar Power Company Limited (VPOCL)
38 Vadinar Properties Limited ( VPRL)
5 Essar Power MP Limited(EPMPL)
6 Essar Steel Chhattisgarh Limited. (ESCL)
7 Essar Steel Processing FZCO (ESP-FZCO)
8 Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL)
(w.e.f. 21.05.2015 to 11.09.2015)
41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(e) Key Management Personnel (with whom transactions have taken place)
1 Mr. Firdose A. Vandrevala, Executive Vice Chairman (FV) (ceased to be director w.e.f. 01.02.2016)
2 Mr. Dilip Oommen, Managing Director & CEO (DO)
3 Mr. Mahadev Iyer, Director (Finance) & CFO (MI) (ceased to be director w.e.f 30.06.2017)
4 Mr. Rajiv Kumar Bhatnagar, Director (Projects) (RB)
5 Mr. Arvind Pande, Independent Director
6 Mr. V. G. Raghavan, Independent Director
7 Mr. S Santhanakrishnan, Nominee Director (ceased to be director from 06.07.16)
8 Mr. H Biswas, Nominee Director (ceased to be director from 27.11.2016)
9 Mr. Aloke Sengupta, Nominee Director
10 Mr. Sunit V Joshi. Nominee Director
11 Mr. Parveen Kumar Malhotra, Director
(f) Enterprise having influence over the Company
1 Imperial Consultants and Securities Private Limited (ceased to be related party w.e.f. 03.03.2016)
(ICASPL)
2 Imperial Consultants and Securities (ceased to be related party w.e.f. 03.06.2016) (ICAS)
Terms and conditions
Sales/Purchases:
The related party transactions attracting the compliance under Section 177 of the Companies Act were placed before
the Audit Committee for necessary approval/review. These transactions are in the ordinary course of business and on
prevailing pricing based on contractual terms and agreement.
ICD Given/Taken:
The Company had given/taken ICDs to/from related parties for general corporate purposes.These ICDs are unsecured,
carry an interest rate ranging from 3.5% to 16.25% and receivable/repayable on demand.
Guarantees to Related parties:
Guarantees given on behalf of related parties are for availing loan facilities from lenders and to government authorities
for general business purposes.
Guarantees from Related parties:
Guarantees provided by the related parties to lender of the company are for availing bank loan facilities.

During the year, following transactions were carried out with the related parties in the ordinary course of
business: (excluding reimbursement)

(` in Crore)
Sr. Particulars Holding Subsidiaries Fellow Associates Key Enterprise
No. Companies Subsidiaries Management having
Personnel influence
(a) Sales (Net) - 998.55 58.34 24.20 - -
- (237.41) (78.33) (3.25) - -
(b) Income-Lease Rentals/Rent - - 4.85 14.00 - -
building - - (5.71) (13.85) - -
(c) Interest Income-Others - 44.07 19.04 - - -
- (39.58) (17.00) (13.35) - -
(d) Sales of Fixed assets - - - - - -
- - - (0.11) - -
(e) Purchase of Raw Materials,Stores - - 997.12 450.01 - -
and Spares, Production - - (808.33) (490.27) - -
Consumables and Services
(f) Purchase of Petroleum Products - - 79.19 - - -
(Fuel) - - (0.01) - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 87 87
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(` in Crore)
Sr. Particulars Holding Subsidiaries Fellow Associates Key Enterprise
No. Companies Subsidiaries Management having
Personnel influence
(g) Power Processing Charges / - - -0.03 1,146.02 - -
Recovery - - (-4.03) (191.56) - -
(h) Repairs and Maintenance - - 8.23 - - -
- - (5.73) - - -
(i) Plant and Equipment Hire - - 4.23 18.18 - -
Charges - - (16.60) - - -
(j) Labour Sub Contract Charges - - 0.18 - - -
- - (1.21) - - -
(k) Professional Fees - 2.03 5.38 - - -
- (8.16) (29.98) - - -
(l) Office Rent - - -7.25 - - -
- - (7.26) - - -
(m) Freight Outwards Expenses - 3.47 273.65 45.14 - -
- (0.26) (228.75) (57.01) - -
(n) Sales Commission - - -1.94 - - -
- (5.60) (-17.61) - - -
(o) Interest Expenses - - 117.23 93.23 - 1.86
- (0.48) (393.18) (82.93) - -
(p) Capital Contract - - 327.35 - - -
- - (58.10) - - -
(q) Sale of stores & Spares - - - - - -
- - (1.30) (5.36) - -
(r) Directors’ Remuneration* - - - - 6.46 -
- - - - (15.42) -
(s) ICD Given - 26.76 - - - -
- (23.54) (114.41) (499.95) - -
(t) Invocation of SBLC - 849.21 - - - -
- - - - - -
(u) Repayment of ICD given - 37.09 114.41 - - -
- (64.80) - - - -
(v) ICD taken - - 38.00 - - -
- - (2,278.02) (376.65) - -
(w) Repayment of ICD taken - - 1.74 361.95 - -
- - (1,266.17) (289.70) - -
(x) Purchase of Investment - - - - - -
- (168.73) - - - -
(y) Share Application Money - 0.59 - - - -
Refunded - - - - - -
(z) Sale of Investment - - - - - -
- - - - - (33.87)
(aa) Sitting Fees - - - - 0.27 -
- - - - (0.30) -
* During the current financial year, the managerial remuneration ` 6.46 Crore paid by the Company is within the limits prescribed
under provision of Section 197 read with Schedule V of the Companies Act 2013 and the Company had taken requisite shareholder’s
approval for appointment and payment of managerial remuneration as required under the Companies Act, 2013 subject to the
approval of Central Government. The remuneration of ` 1.51 crores (out of ` 6.46 Crore) is pertaining to appointments made during
current financial year, which needs approval of the Central Government. The Company has made necessary applications to the
Central Government seeking permission for this payment of remuneration and the approval is awaited.

88 88 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Balance outstanding at year end

(` in Crore)
Sr. Particulars Holding Subsidiaries Fellow Associates Key Enterprise
No. Companies Subsidiaries Management having
Personnel influence
(a) Long Term Investments - 365.47 3.56 186.20 - -
* - (1,078.68) (13.36) (186.20) - -
** - (1,019.29) (46.21) (186.20) - -
(b) Debtors - 490.55 22.54 0.10 - -
* - (475.09) (22.78) - - -
** - (329.20) (17.30) - - -
(c) Other Current Advance/ - 166.74 13.33 - - -
Receivable * - (116.60) (10.58) - - -
** - (3,945.53) (0.32) (0.46) - -
(d) Deposits - - - - - -
* - - (4.37) - - -
** - - (4.37) - - -
(e) Other Advance (Including 0.50 13.53 100.63 3.57 - -
Advance Towards Equity) * (0.50) (18.03) (168.85) (13.88) - -
** (0.50) (102.05) (31.17) (0.28) - (13.63)
(f) Sundry Creditors /Other - 19.88 1377.79 534.85 - -
Payable * - (19.78) (1,036.06) (485.20) - (119.36)
** - (15.04) (938.95) (628.44) - (22.50)
(g) Capital Advances (CWIP) - - 11.92 - - -
* - - (16.49) - - -
** - - (14.59) - - -
(h) Advance From Customer - 36.04 131.99 411.66 - -
* - (17.11) (318.06) (0.25) - (177.22)
** - (169.38) (487.60) (0.15) - -
(i) Inter Corporate Deposits - 206.25 - - - -
Given * - (1,050.05) (114.41) - - -
** - (1,031.78) - - - -
(j) Inter Corporate Deposits - - 38.00 - - -
Taken * - - (2,759.97) (361.95) - (87.50)
** - - (1,788.78) (275.00) - -
(k) Security Deposits - - 4.22 - - -
Received * - - (4.22) - - -
** - - (4.22) - - -
(l) Guarantees Given - 3,577.02 49.23 182.99 - -
* - (3,740.10) (49.23) (182.99) - -
** - (3,701.76) (49.23) (182.99) - -
(m) Guarantees Received 14,375.97 - 5,859.85 - - -
* (14,489.86) - (5,881.51) - - -
** (14,301.82) - (5,787.71) - - -
Note : * Figures mentioned pertains to 31st March 2016
** Figures mentioned pertains to 1st April 2015.
Balances are net of impairment / provision, if any.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 89 89
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Details of Party wise transactions :
(` in Crore)
Nature of Transaction Name of Related Party
BPOL EBTL EPOL EPHL EOL EPGL EPMPL AEGIS ALL EPIL ESL
(a) Sales (Net) - 24.20 - - 1.93 0.06 - - 6.26 49.62 -
(0.02) (3.23) (0.03) - (0.08) - - - (1.38) (64.22) -
(b) Income - Lease 11.12 0.43 0.02 2.46 0.10 - - 0.05 0.42 4.05 0.11
Rentals/Rent building (11.22) (0.28) (0.12) (2.35) (0.08) - - (0.30) (0.20) (4.92) -
(c) Interest - - - - 4.57 - - - - - 14.47
Income-Others - - - - (5.71) - - - - - (11.29)
(d) Sale Of Fixed Assets - - - - - - - - - - -
- (0.11) - - - - - - - - -
(e) Purchases of Raw - 450.01 0.01 - 8.46 - - - 375.07 19.65 351.56
Materials ,Stores and - (456.18) - - (2.62) - - - (217.37) (19.66)
Spares, (418.95)
Prod. Consumables
and services
(f) Purchase of - - - - - - - - - - -
Petroleum Products - - - - (0.01) - - - - - -
(Fuel)
(g) Power Processing 18.87 - (0.03) 290.17 - - 754.27 - - - -
Charges / Recovery (12.68) - - (125.40) - (0.01) - - - - -
(h) Repairs and - - 1.57 - - - - - - 6.66 -
Maintenance - - (2.68) - - - - (0.17) (0.11) (2.69) -
(i) Plant and Equipment - 18.18 - - - - - - 1.48 2.75 -
Hire Charges - - - - - - - - (16.43) (0.18) -
(j) Labour Sub Contract - - - - - - - 0.18 - - -
Charges - - - - - - - (0.01) (1.21) - -
(k) Professional Fees - - - - - - - 0.82 - 4.56 -
- - - - (0.08) - - (29.61) - (0.28) -
(l) Office Rent - - - - - - - - - - -
- - - - - - - - - - -
(m) Freight Outwards - 45.14 - - - - - - 239.81 - 9.19
Expenses - (57.01) - - - - - - (202.64) - (9.59)
(n) Sales Commission - - - - - - - - - - -
- - - - - - - - - - -
(o) Interest & Other 12.55 67.67 0.51 3.76 7.78 - 1.57 - - 59.07 -0.95
Financial Expenses (13.00) (58.14) (7.53) - (254.34) - - - (10.17) (25.09) (0.95)
(p) Capital Contract - - - - - - - - - 339.35 -
- - - - - - - - - (58.10) -
(q) Sale of stores & - - - - - - - - - -
Spares - (5.36) - - - - - - - (1.30) -
(r) Directors - - - - - - - - - - -
Remuneration - - - - - - - - - - -
( including
perquisites)
(s) ICD Given - - - - - - - - - - -
- - - - - - - - - -
(114.41)
(t) Invocation of SBLC - - - - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - - 114.41
- - - - - - - - - - -
(v) ICD taken - - - - - - - - - - -
- (376.65) - - (2,047.94) - - - (200.30) - -
(w) Repayment of ICD - 361.95 - - - - - - - - -
taken - (14.70) - - (643.76) - - - (340.64) - -
(x) Purchase of - - - - - - - - - - -
Investments - - - - - - - - - - -
(y) Share Application - - - - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

90 90 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
EBTPL ESTLM ESMEF EPML ESTF ESOSL PTEI EOSL EPOOL EPTCL AGCNL
(a) Sales (Net) 0.38 - 886.95 - - - 111.59 0.01 - - -
- - (237.41) - - - - - - - -
(b) Income - Lease - - - - - - - - - 0.10 -
Rentals/Rent building - - - - - - - - - (0.09) -
(c) Interest Income-Others - - 40.45 - 3.62 - - - - -
- - (36.01) - (3.55) - - - - - -
(d) Sale Of Fixed Assets - - - - - - - - - - -
- - - - - - - - - - -
(e) Purchases of Raw 63.63 - - - - - - - - - -
Materials ,Stores and (132.40) - - - - - (0.02) - - - -
Spares,
Prod. Consumables
and services
(f) Purchase of Petroleum - - - - - - - - - - -
Products (Fuel) - - - - - - - - - - -
(g) Power Processing - - - - - - - 82.71 - -
Charges / Recovery (-4.04) - - - - - - - (53.49) - -
(h) Repairs and - - - - - - - - - - -
Maintenance - - - - - - - - - - (0.09)
(i) Plant and Equipment - - - - - - - - - - -
Hire Charges - - - - - - - - - - -
(j) Labour Sub Contract - - - - - - - - - - -
Charges - - - - - - - - - - -
(k) Professional Fees - - 2.03 - - - - - - - -
- - (7.99) - - - (0.17) - - - -
(l) Office Rent - - - - - - - - - - -
- - - - - - - - - - -
(m) Freight Outwards 24.64 - - - - - - - - - -
Expenses (17.51) - (0.26) - - - - - - - -
(n) Sales Commission - -1.94 - - - - - - - - -
- (-17.61) (5.60) - - - - - - - -
(o) Interest & Other 45.61 - - 4.03 - - 0.00 0.23 7.69 - -
Financial Expenses (15.49) - (0.48) (8.00) - - - (0.56) (3.03) - -
(p) Capital Contract - - - - - - - - - - -
- - - - - - - - - - -
(q) Sale of stores & - - - - - - - - - - -
Spares - - - - - - - - - - -
(r) Directors - - - - - - - - - - -
Remuneration - - - - - - - - - - -
( including perquisites)
(s) ICD Given - - 26.76 - - - - - - - -
- - (23.00) - - - - - - - -
(t) Invocation of SBLC - - 849.21 - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - 37.09 - - - - - - - -
- - (64.80) - - - - - - - -
(v) ICD taken - - - 38.00 - - - - - - -
- - - - - - - - - - -
(w) Repayment of ICD - - - - - - - 1.74 - - -
taken - - - (275.00) - - - (5.48) - - -
(x) Purchase of - - - - - - - - - - -
Investments - - - - - (168.68) - - - - -
(y) Share Application - - 0.59 - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 91 91
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
EBTSL VPTL ESLL EBPPL VPOCL OSPIL VPRL ESCL DO MI FV
(a) Sales (Net) - - - - - - - - - - -
(0.73) (11.88) - - - - - - - - -
(b) Income - Lease - - - - - - - - - - -
Rentals/Rent building - - - - - - - - - - -
(c) Interest Income-Others - - - - - - - - - -
- - - - - (13.36) - - - - -
(d) Sale Of Fixed Assets - - - - - - - - - - -
- - - - - - - - - - -
(e) Purchases of Raw - - - - - - - - - - -
Materials ,Stores and - - (0.06) - - (34.09) - - - - -
Spares,
Prod. Consumables
and services
(f) Purchase of Petroleum - - - - - - - - - - -
Products (Fuel) - - - - - - - - - - -
(g) Power Processing - - - - - - - - - - -
Charges / Recovery - - - - - - - - - - -
(h) Repairs and - - - - - - - - - - -
Maintenance - - - - - - - - - - -
(i) Plant and Equipment - - - - - - - - - - -
Hire Charges - - - - - - - - - - -
(j) Labour Sub Contract - - - - - - - - - - -
Charges - - - - - - - - - - -
(k) Professional Fees - - - - - - - - - - -
- - - - - - - - - - -
(l) Office Rent - - - -7.25 - - - - - - -
- - - (7.26) - - - - - - -
(m) Freight Outwards - - 3.47 - - - - - - - -
Expenses - - (-0.98) - - - - - - - -
(n) Sales Commission - - - - - - - - - - -
- - - - - - - - - - -
(o) Interest & Other - - - - - - - - - - -
Financial Expenses - (41.30) - - (26.95) - (2.82) (8.75) - - -
(p) Capital Contract - - - - - - - - - - -
- - - - - - - - - - -
(q) Sale of stores & - - - - - - - - - - -
Spares - - - - - - - - - - -
(r) Directors - - - - - - - 3.38 2.50 -
Remuneration - - - - - - - - (2.82) (2.14) (10.46)
( including perquisites)
(s) ICD Given - - - - - - - - - - -
- - - - - - - - - -
(500.49)
(t) Invocation of SBLC - - - - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - - -
- - - - - - - - - - -
(v) ICD taken - - - - - - - - - - -
- (29.78) - - - - - - - - -
(w) Repayment of ICD - - - - - - - - - - -
taken - - - - (1.28) - - (275.00) - - -
(x) Purchase of - - - - - - - - - - -
Investments - - (0.05) - - - - - - - -
(y) Share Application - - - - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

92 92 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
RB EMRL EVTL TMSSL EEOL EII PKOM EPLD ICAS
(a) Sales (Net) - - 0.07 - - - - - -
- - - - - - - - -
(b) Income - Lease Rentals/Rent - - - - - - - - -
building - - - - - - - - -
(c) Interest Income-Others - - - - - - - - -
- - - - - - - - -
(d) Sale Of Fixed Assets - - - - - - - - -
- - - - - - - - -
(e) Purchases of Raw Materials, - - 35.14 - - 106.36 37.24 - -
Stores and Spares, - (0.15) (16.88) (0.29) - - - - -
Prod. Consumables and
services
(f) Purchase of Petroleum - - - - 79.19 - - - -
Products (Fuel) - - - - - - - - -
(g) Power Processing Charges / - - - - - - - - -
Recovery - - - - - - - - -
(h) Repairs and Maintenance - - - - - - - - -
- - - - - - - - -
(i) Plant and Equipment Hire - - - - - - - - -
Charges - - - - - - - - -
(j) Labour Sub Contract Charges - - - - - - - - -
- - - - - - - - -
(k) Professional Fees - - - - - - - - -
- - - - - - - - -
(l) Office Rent - - - - - - - - -
- - - - - - - - -
(m) Freight Outwards Expenses - - - - - - - -
- - (0.02) - - - - - -
(n) Sales Commission - - - - - - - - -
- - - - - - - - -
(o) Interest & Other Financial - - - - - - - - 1.86
Expenses - - - - - - - - -
(p) Capital Contract - - - - - - - (12.00) -
- - - - - - - - -
(q) Sale of stores & Spares - - - - - - - - -
- - - - - - - - -
(r) Directors Remuneration 0.58 - - - - - - - -
(including perquisites) - - - - - - - - -
(s) ICD Given - - - - - - - - -
- - - - - - - - -
(t) Invocation of SBLC - - - - - - - - -
- - - - - - - - -
(u) Refund of ICD Given - - - - - - - - -
- - - - - - - - -
(v) ICD taken - - - - - - - - -
- - - - - - - - -
(w) Repayment of ICD taken - - - - - - - - -
- - - - - - - - -
(x) Purchase of Investments - - - - - - - - -
- - - - - - - - -
(y) Share Application Money - - - - - - - - -
Refunded - - - - - - - - -
(z) Sale of Investment - - - - - - - - -
- - - - - - - - (33.87)

Details of Sitting Fees (` in Crores)

Particulars Year ended Year ended
31st March, 2017 31st March, 2016
To Independent Directors 0.23 0.26
To Nominee Directors and other director 0.04 0.04

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 93 93
 Balance outstanding as at the year end (` in Crore)

94 94
Particulars BPOL ESTLM ESAHL PSCL ESML ESCL ESTF ESMEF EPIL ALL EBTPL EGFL
Long Term Investments 104.77 - - 0.20 - 5.78 17.61 322.75 - - - -
* (104.77) - - (0.20) - (5.78) (17.61) (322.75) - - - -
** (104.77) - - (0.20) - (5.78) (17.61) (322.75) - - - -
Debtors - - - 0.01 - - - 490.54 19.86 - 0.43 -
* - - - (0.01) - - - (475.07) (20.50) - - -
** - - - - - - - (329.20) (13.35) - - -
Other Current Advance/ - - - - - - 22.97 143.77 - - - -
Receivable * - - - - - - (16.62) (99.98) - - - -
** - - - - - - (13.07) (63.97) - - - -
Essar Steel India Limited

Deposits - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Other Advance( Including - - - 11.18 - 3.57 0.75 0.33 0.07 0.08 0.87 0.50
Advance Towards Equity) * - - - (11.18) - (3.41) (0.61) (0.69) (2.37) (4.47) (10.90) (0.50)
** - - - (10.68) - (0.28) (0.61) (0.63) (0.06) (4.25) - (0.50)
Sundry Creditors /Other Payable 198.69 5.61 - 0.05 - - 0.05 16.27 428.97 157.46 322.17 -
* (195.50) (7.80) - (0.05) - - (0.05) (15.20) (63.86) (48.25) (338.51) -
** (202.83) (36.19) - - - (22.81) (0.04) (14.96) (241.09) (84.96) (221.96) -
Capital Advances (CWIP) - - - - - - - - 11.92 - - -
* - - - - - - - - (16.49) - - -
** - - - - - - - - (14.59) - - -
Advance From Customer - - - - - - 11.85 13.89 131.97 - - -
* - - - - - - (11.85) (5.26) (317.24) - - -
** (0.15) - - - - - (11.85) (157.50) (487.38) (0.05) - -
Inter Corporate Deposits Given/ - - - - - - 29.18 177.08 - - - -
Invocation of SBLC * - - - - - - (29.85) (1,020.20) - - - -
** - - - - - - (28.17) (1,003.61) - - - -
Inter Corporate Deposits Taken - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - (275.00) - - - (140.34) - -
Security Deposits Received - - - - - - - - - - 4.22 -
* - - - - - - - - - - (4.22) -
** - - - - - - - - - - (4.22) -
Guarantees Given - - - - - - - 162.10 - - - -
* - - - - - - - (1,000.55) - - - -
** - - - - - - - (1,116.76) - - - -
Guarantees Received - 5,859.85 10,100.41 - 4,275.56 - - - - - - -
Notes to Financial Statements for the year ended 31st March, 2017

* - (5,881.51) (10,160.68) - (4,329.17) - - - - - - -

** - (5,787.71) (9,810.02) - (4,491.80) - - - - - - -

41 st A N N U A L R E P ORT 2016-17
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.
 (` in Crore)
Particulars PTEI EOL EBTL EPOL AEGIS EPGL EPL ESA-INC EPJL EOSL ESP- EPOOL
FZCO
Long Term Investments - - 1.30 - - - - - - - 0.25 2.60
* - (10.17) (1.30) - - - - - - - (0.25) (2.60)
** - (12.10) (1.30) - - - (31.32) - - - (0.25) (2.60)
Debtors - 0.01 0.10 - - 0.07 - 2.17 - - - -
* - (0.01) - - - - - (2.17) - - - -
** - - - - - - - (3.86) - - - -
Other Current Advance/ - - - - - - - - - - - -
Receivable * - - - - - - - - - - - -
** - - - - - - - - - - - -
Deposits - - - - - - - - - - - -
* - (0.02) - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
** - (0.02) - - - - - - - - - -
Other Advance( Including 0.03 - - - 0.01 - - 0.16 0.54 - - -
Advance Towards Equity) * (0.03) (0.04) - - (0.01) - - (0.16) (0.61) - - (0.50)
** (0.04) (2.75) - - - (0.11) - (0.16) (0.55) - - -
Sundry Creditors /Other Payable 0.04 - 245.30 19.48 28.01 - - - 0.00 - - 56.13
* (0.04) (300.73) (215.64) (19.25) (32.94) - - - (0.06) (0.11) - (49.48)
** (0.04) (68.47) (392.83) (111.17) (24.74) - - - - (2.32) - (6.92)
Capital Advances (CWIP) - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - (-1.21)
Advance From Customer 10.30 - 411.66 - 0.01 - - - - - - -
* - (0.77) (0.25) - (0.01) - - - - (0.01) - -
** - (0.14) - - (0.01) - - - - (0.01) - -
Inter Corporate Deposits Given/ - - - - - - - - - - - -
Invocation of SBLC * - - - - - - - - - - - -
** - - - - - - - - - - - -
Inter Corporate Deposits Taken - - - - - - - - - - - -
* - (2,320.99) (361.95) - - - - - - (1.74) - -
** - (916.81) - - - - - - - (7.22) - -
Security Deposits Received - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Guarantees Given - - - - - 49.23 - - - - - 26.05
* - - - - - (49.23) - - - - - (26.05)
** - - - - - (49.23) - - - - - (26.05)
Guarantees Received - - - - - - - - - - - -
Notes to Financial Statements for the year ended 31st March, 2017

* - - - - - - - - - - - -
** - - - - - - - - - - - -
Essar Steel India Limited

Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.

95 95
 (` in Crore)

96 96
Particulars ESOSL EPHL EAHL EMRL EEPDCL EOSPL VOTL VPOCL ESL EPMPL EBPPL AGCNL
Long Term Investments 24.86 2.60 - - - - - - 3.56 68.90 - -
* (738.07) (2.60) - - - - - - (3.19) (68.90) - -
** (653.18) (2.60) - - - - - - (2.79) (68.90) - -
Debtors - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Other Current Advance/ - - - - - - - - 13.02 - - -
Receivable * - - - - - - - - (10.16) - - -
** - (0.46) - - - - - - - - - -
Essar Steel India Limited

Deposits - - - - - - - - - - - -
* - - - - - - - - - - (4.35) -
** - - - - - - - - - - (4.35) -
Other Advance( Including - - 0.18 0.38 - - 0.17 0.01 60.35 - - 0.11
Advance Towards Equity) * - - (0.18) (0.38) (0.01) (6.18) (0.17) (0.01) (95.58) (9.97) - (0.11)
** (83.79) - (0.18) (0.53) (0.01) (7.89) (0.17) - (13.59) - - (0.21)
Sundry Creditors /Other Payable - 28.43 - - 0.01 - - 0.02 74.63 6.30 - -
* - (24.58) - - - - - (13.46) (85.15) - (5.31) -
** - - - - - - - (8.40) (64.50) (3.04) (1.04) -
Capital Advances (CWIP) - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Advance From Customer - - - - - - 0.01 - - - - -
* - - - - - - - - (0.02) - - -
** - - - - - - - - (0.02) - - -
Inter Corporate Deposits Given/ - - - - - - - - - - - -
Invocation of SBLC * - - - - - - - - (114.41) - - -
** - - - - - - - - - - - -
Inter Corporate Deposits Taken - - - - - - - - - - - -
* - - - - - - - (191.66) - - - -
** - - - - - - - (192.94) - - - -
Security Deposits Received - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Guarantees Given 3,414.92 43.93 - - - - - - - 113.01 - -
* (2,739.55) (43.93) - - - - - - - (113.01) - -
** (2,585.00) (43.93) - - - - - - - (113.01) - -
Guarantees Received - - - - - - - - - - - -
Notes to Financial Statements for the year ended 31st March, 2017

* - - - - - - - - - - - -
** - - - - - - - - - - - -

41 st A N N U A L R E P ORT 2016-17
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.
 (` in Crore)
Particulars ETKL NTCI EEPLC EGSF ESLL PTOL EPML EPTCL ESALL OSPIL VPTL
Long Term Investments - - - - 0.05 - - - - - -
* - - - - (0.05) - - - - - -
** - - - - (0.05) - - - - (25.50) -
Debtors - - - - - - - - - - -
* - - - - - - (0.10) - - - -
** - - - - - - (0.10) - - - -
Other Current Advance/Receivable - - - - - - - 0.27 0.04 - -
* - - - - - - (0.21) (0.17) (0.04) - -
** - - - - - - (0.21) (0.07) (0.04) (3,868.50) -
Deposits - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Other Advance( Including Advance 0.06 0.13 0.55 - 1.12 - 34.18 0.10 - - -
Towards Equity) * (0.06) (0.13) (0.55) - (5.39) - (34.18) (0.10) - - -
** (0.06) (0.13) (0.55) - (0.05) - - (0.10) - (6.13) -
Sundry Creditors /Other Payable - - - 1.06 3.47 0.63 3.46 - - - -
* - - - (1.06) (4.44) (0.63) - - - - (80.75)
** - - - (1.06) - (0.63) (23.32) - - - (43.58)
Capital Advances (CWIP) - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Advance From Customer - - - - - - - - - - -
* - - - - - - - - - - (0.01)
** - - - - (0.03) - - - - - -
Inter Corporate Deposits Given/ - - - - - - - - - - -
Invocation of SBLC * - - - - - - - - - - -
** - - - - - - - - - - -
Inter Corporate Deposits Taken - - - - - - 38.00 - - - -
* - - - - - - - - - - (224.78)
** - - - - - - (275.00) - - - (195.00)
Security Deposits Received - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Guarantees Given - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Guarantees Received - - - - - - - - - - -
Notes to Financial Statements for the year ended 31st March, 2017

* - - - - - - - - - - -
** - - - - - - - - - - -
Essar Steel India Limited

Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.

97 97
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(` in Crore)
Particulars VPRL EII TMSSL EVTL ICASPL ICAS EPLD IV
Long Term Investments - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Debtors - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Other Current Advance/ - - - - - - - -
Receivable * - - - - - - - -
** - - - - - - -
Deposits - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Other Advance( Including - - - 2.80 - - - -
Advance Towards Equity) * - - (10.40) (2.38) - - - -
** - - - - (13.63) - - -
Sundry Creditors /Other - 15.01 0.34 0.14 - - 15.25 305.53
Payable
* (8.05) (2.09) (0.34) (0.49) - (119.36) (27.26) -
** (5.51) - - - (22.50) - - -
Capital Advances (CWIP) - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Advance From Customer - - - - - - - -
* - - - - - (177.22) - -
** - - - - - - - -
Inter Corporate Deposits Given/ - - - - - - - -
Invocation of SBLC * - - - - - - - -
** - - - - - - - -
Inter Corporate Deposits Taken - - - - - - - -
* (20.80) - - - - (87.50) - -
** (20.80) - - - - - - -
Security Deposits Received - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Guarantees Given - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Guarantees Received - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Note : * Figures mentioned pertains to 31st March 2016
** Figures mentioned pertains to 1st April 2015
Balances are net of impairment / provision, if any.

98 98 41 st A N N U A L R E P ORT 2016-17
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
53 Contingent Liabilities not provided for

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(a) Claims against the Company not acknowledged as debt in
respect of:
(i) Disputed Sales Tax/VAT/ Entry Tax matters in respect 17.01 18.68 18.68
which the Company has gone in appeal
(ii) Disputed Excise Duty matters in respect which the 0.17 0.17 0.17
Company has gone in appeal
(iii) Disputed Custom Duty / Export Duty matters in respect 73.89 134.11 134.11
which the Company has gone in appeal
(iv) Tax on sale of Electricity demanded by collector of 45.91 45.91 45.91
electricity duty on Essar Power Limited
(v) Electricity Duty demand (Including Interest)1 1,321.48 609.01 609.01
(vi) Wheeling Charges demanded by GETCO 2
393.01 393.01 393.01
[including amount paid ` 27.23 Crore
(Previous year `27.23 Crore)]
(vii) Freight Claim by Railway [including amount paid 205.41 100.53 100.53
` 27.59 Crore (Previous year ` 27.59 Crore)]
(viii) Disputed Differential Electricity Duty [including amount 49.39 49.39 49.39
paid ` 49.39 Crore (Previous year ` 49.39 Crore)]
(ix) Electricity Charges by DGVCL3 (including amount paid 192.58 192.58 -
` 192.58 Crore)
(x) Disputed Cross Subsidy4 (including amount paid 534.97 327.28 -
` 168.60 Crore)
(xi) Take or Pay liability5 574.10 - -
(xii) Others 16.37 25.78 26.42
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 ` 612.79 Crore (Previous year ` 589.24 Crore) towards the arrears of the principal amount of electricity
duty. The appeal was dismissed on 07.09.2016. The Company has filed SLP No. 34384 of 2016, challenging the
judgment of Divisional Bench of Gujarat High Court, however the Supreme Court vide its order dated 02.05.2017
has rejected the SLP. The Company has filed review petition in the Supreme Court for review of judgement dated
02.05.2017. Further, the Collector Electricity Duty has revised their demand for interest to ` 708.69 Crore on the
Electricity Duty. The Company has already paid 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 ` 612.79 (already paid) Crore
towards electricity duty and ` 708.69 Crore towards interest on electricity duty as contingent liability as at 31st March,
2017.
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

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 99 99
 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
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, vide its order dated 5th December, 2011 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 2016 towards demand of transmission charges and has
considered demand for interest as a remote liability.
3. By Order dated 30th June, 2010, the Hon’ble High Court of Gujarat had sanctioned the Scheme for amalgamation,
inter alia, of Essar Steel (Hazira) Limited, (ESHL) with Essar Steel India Limited (ESIL). The amalgamation became
effective from 5th August, 2010. The undertaking (i.e. properties and liabilities) of ESHL became the undertaking of
ESIL from the Appointed Date i.e. 1st April, 2009. Thereafter, ESIL has used the electricity, including the electricity
supplied by the Dakshin Gujarat Vij Company Limited (DGVCL), for manufacturing goods through the undertaking of
the erstwhile ESHL. Such use of electricity amounts to use of electricity by ESIL itself.
DGVCL raised a Supplementary Bill dated 22nd September, 2011 claiming ` 2,311.02 Crore from ESIL on the ground
that ESIL has used the electricity in breach of the agreed terms of MOM dated 1st February, 2010 for ESIL has
used electricity beyond the approved power boundary. Subsequently, DGVCL raised a revised Supplementary Bill
dated 25th January, 2012 for payment of a sum `192.58 Crore, and same has been paid by ESIL to DGVCL under
protest to obtain certain pending permissions from DGVCL. As per the facts, use of electricity by ESIL beyond the
approved power boundary has not caused any loss or prejudice to DGVCL. In any case, DGVCL cannot apply the
increased rate of tariff in respect of electricity generated by the captive power plants of ESIL. ESIL has filed an appeal
before Appellate Authority on 19th Nov, 2012 challenging the claim of `192.58 Crore raised by DGVCL. The Appellate
Authority and Chief Electrical Inspector (CEI) has ruled that DGVCL can claim only to the extent of DGVCL’s power
supplied in the concerned period which amounts to 25.23 million units and DGVCL shall refund the balance.
According to such ruling of the CEI, approx. ` 28.60 crores stands payable out of which ` 14.30 crores is already paid
by way of regular energy bill raised by DGVCL and ESIL is entitled to a refund of about ` 184.09 crores. DGVCL has
challenged the Order of the Appellate Authority in Hon’ble High Court of Gujarat by way of Special Civil Application.
ESIL has also filed Special Civil Application in Gujarat High court mentioning that there is no unauthorized use of
power considering merger Order dated 30.06.2010 passed by the Hon’ble High Court of Gujarat or assuming without
admitting that there has been unauthorized use of power, the same ought to have been only for 6.63 MU on the basis
of proportionate of 25.23 MU supplied by DGVCL during 15.06.11 to 30.07.2011 Ld Single Judge of High Court of
Gujarat by way of Judgment dated 22.01.2015 held that the Court did not find any arbitrariness, perversity or illegality
in the impugned order dated 01.11.2013, passed by the Appellate Authority directing the refund of the excess amount
paid by Essar pursuant to the revised supplementary bills over and above the quantity of unauthorized power used
by Essar. DGVCL by way of LPA no 465 and 466 of 2015 challenged the Judgment of Single Judge dated 22.01.2015
before the Div. Bench of Gujarat High Court, the Div. Bench without going in to the merits of case passed order on

100 100 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
the point of maintainability and allowed the LPAs. The company has filed SLP No 27920 & 27921 of 2015 before the
Supreme Court of India against the Order dated 17.07.2015 of the Div. Bench of Gujarat High Court , which is pending
for hearing. Meanwhile DGVCL has also filed a civil suit No. 373 of 2016 against ESIL in the Court of Senior Civil
Judge, Surat for recovery of their dues. ESIL has challenged the maintainability of suit on the ground of limitation and
statutory bar under the Electricity Act. The matter is fixed for hearing on 16.08.2017 .
4. The Company has been granted the status of a Regional Entity, vide order dated 08.06.2013 by Central Electricity
Regulatory Commission (CERC). The Company disconnected itself from the 220 KV STU network on 23.06.2013
and upon shifting of the connectivity from the State Load Dispatch Centre Gujarat (SLDC) to Western Regional Load
Dispatch Centre (WRLDC) Company has ceased to be an embedded customer of Gujarat for all intent and purposes
and it is treated as a regional entity independent of the State of Gujarat in the matter of scheduling, dispatch, energy
accounting etc.
In view of the above, supported by opinion from a senior Advocate, the Company has informed Dakshin Gujarat Vij
Company Ltd. (DGVCL) about wrongfully levied cross subsidy surcharge upon the regional entity and claimed the
refund of cross subsidy paid during June 2013 to June 2015 vide letter dated July 27, 2015. Accordingly, the amount
of cross subsidy surcharge levied during the period from June 2013 to March 2017 amounting to ` 534.97 Crore has
not been recognized. The company had filed Petition No.216/MP/2015 in CERC on 08.09.2015 challenging claims of
DGVCL as cross subsidy. The CERC vide its Order dated 06.07.2016 dismissed the Petition holding that the Gujarat
Commission has jurisdiction to decide the issue, accordingly, the Company has filed Petition No 1601 of 2016 before
GERC challenging the levy of Cross subsidy and the same was argued by companies Sr Counsel and the hearing is
continued and next date will be communicated by GERC.
Meanwhile, DGVCL has also filed Petition No.151/MP/2016 in CERC for Recall of the permission granted in the
Order dated 08.06.13 passed by the Hon’ble CERC In Petition No 245/MP/2012 granting connectivity to the interstate
transmission network of PGCIL for the premises of the and seeking direction for recovery of outstanding cross subsidy
amount. CERC heard the matter on limited scope of maintainability of DGVCL petition, the company has filed its reply
on 29.12.2016 only on the point of maintainability. The matter before the CERC is reserved for order on the issue of
maintainability. No further date notified.
5. A Claim of ` 574.10 Crore has been raised by Indian Oil Corporation Ltd. (IOCL) on Essar Oil Ltd. (EOL) under the
Take or Pay provision of the GSA dated 15th January 2009 between IOCL and Essar Steel India Limited (ESIL) and
the Assignment Agreement dated 14th November 2013 between ESIL, EOL and IOCL. An amount of ` 186 Crore have
been recovered by IOCL from EOL through invocation of Bank Guarantee on 16.02.2017. EOL has raised the said
claim on ESIL under provisions of the Agreement Recording terms of Assignment between Essar Steel and Essar Oil
dated 25th September 2014.
The claim of IOCL has been challenged by EOL on the following grounds :
a) ESIL /IOCL agreement is a back to back agreement flowing from the agreement between Rasgas and PLL and
PLL and IOCL. Since IOCL has not received any Take or Pay claims from PLL, IOCL cannot claim same from
Essar Steel. Further IOCL has been able to sell all the gas it received under the contract and has not incurred
any loss due to non-offtake by ESIL and as such cannot claim Take or Pay from ESIL.
b) IOCL has been in breach of the provisions of the contract by not been able to supply gas at the contractual
terms for more than 180 days in FY 2014. Further ESIL is eligible for raising Liquidated Damage claim on IOCL
due to the non- performance of IOCL under the Gas Sales Agreement.
Further, as per the Provisions of the contract (Clause 6.3 of the GSA between ESIL and IOCL) the Take or Pay
payment has to be compensated through supply of Make up Gas in the subsequent period of the contract. Further,
under Clause 19.9 (b) once the Make Up rights are accrued on payment of the Take or Pay amount it survives the
termination of the contract. Under above circumstances the amount recovered as Take or Pay is an advance paid to
IOCL towards future supply / receivables.

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(b) Guarantees given to various Banks, 3,809.24 4,455.56 4,806.26
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

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 101 101

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
The Company along with Essar Minerals Ltd. and Essar Minerals Cooperative U. A. had given a guarantee of up
to USD 572.99 million for a loan taken by Essar Steel Offshore Limited (ESOL) from Standard Chartered Bank
(SCB) for the acquisition of New Trinity Coal Inc., (Trinity) in July, 2010. 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. SCB
has issued a demand notice dated 7th December, 2015 demanding immediate repayment of the full amount of the
outstanding loan, together with accrued interest and all other amount due and payable as on date, aggregating to USD
450.67 Million (USD 526.68 million as on 31st March, 2017) on the principal borrower and all the guarantors. SCB’s
primary security is the assets of Trinity and pledge of the shares. Considering the coking coal reserves available and
business valuation of Trinity by a third party based on future cash flow projections of Trinity’s business, the same has
been considered as contingent liability.
54 Commitments

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(a) Estimated amount of contracts remaining to be 287.70 397.65 531.39
executed on capital account and not provided for
(b) Custom Duty on pending export obligation 3,609.71 4,328.43 4,500.95
under EPCG scheme
55 Employee Benefits
(i) Defined Contribution Plan
The company has a defined contribution plan whereby contribution are made to provident fund in India for
employees at a percentage of basic salary as per regulations. Contributions are made to registered provident
fund administered by government. The obligation of the company is limited to the amount contributed and it
has no further contractual or constructive obligation. Company’s contribution to Provident Fund aggregating to
` 15.22 Crore (Previous year ` 18.75 Crore) are recognised in the Statement of Profit and Loss and capital work
in progress, as applicable.
(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 a separate fund that is legally separated from
the entity.
The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the
year are as follows:

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Net employee benefit expense recognised
Current Service Cost 4.49 5.36
Net Interest/(Income) on net defined benefit liability/(asset) 1.59 1.52
Expenses Recognised in the statement of profit and loss 6.08 6.88
Other Comprehensive Income
Actuarial (gain)/loss recognised in the year due to liability experience (3.17) 0.67
changes
Actuarial (gain)/loss recognised in the year due to liability assumption 3.14 -
changes
Actuarial (gain)/loss arising on the liability during the period (0.03) 0.67
Add: Return on Plan Assets (greater)/less than discount rate 0.26 (0.44)
Actuarial Loss/(Gain) recognised in OCI 0.23 0.23

102 102 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Defined Benefit Cost
Service Cost 4.49 5.36
Net interest/(income) on net defined benefit liability/(asset) 1.59 1.52
Actuarial (gain)/loss arising recognised in OCI 0.23 0.23
Defined Benefit Cost 6.31 7.11
Balance Sheet
Details of provision for Gratuity
Defined Benefit Obligation (60.89) (57.38)
Fair value of Plan Assets 37.14 34.00
Funded Status [Surplus/(Deficit)] (23.75) (23.38)
Net Defined Benefit Asset/(Liability) (23.75) (23.38)
Reconciliation of Net Balance Sheet Position
Net defined benefit asset/(liability) at the end of prior period (23.38) (23.29)
Service cost (4.49) (5.36)
Net interest on net defined benefit (liability)/asset (1.59) (1.52)
Gain/(Loss) recognised in OCI (0.23) (0.23)
Employer Contribution 5.94 7.66
Transfers credit/(cost) - (0.65)
Net Defined Benefit (Liability)/Asset at the end of reporting period (23.75) (23.39)
Changes in the present value of the defined benefit obligation are as
follows:
Projected Benefit Obligations (PBO) at the beginning of the year 57.39 63.20
Service Cost 4.49 5.35
Interest Cost 4.27 4.28
Acquisition/Transfer In/(Transfer Out) - 0.65
Actuarial (gain)/loss on obligations - 0.67
Actuarial (gain)/loss - experience (3.17) -
Actuarial (gain)/loss - financial assumptions 3.14 -
Benefits paid (5.23) (16.77)
PBO at the end of the year 60.89 57.38
Changes in the fair value of plan assets are as follows:
Fair Value of Plan Assets at the beginning of the year 34.01 39.91
Acquisition Adjustment - -
Interest Income on Plan Assets 2.68 2.76
Contributions/Transfers 5.94 7.66
Benefits paid (5.23) (16.77)
Return on Plan Assets greater/(less) than discount rate (0.26) 0.44
Fair Value of Plan Assets at the end of the year 37.14 34.00
The Company expects to contribute ` 7.92 crores (previous years ` 9.00 crores) to its gratuity plan for the next
year.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 103 103

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Expected benefits payment for the year ending

As at As at As at
31 March, 2017
st
31 March, 2016
st
1 April, 2015
st

` in Crore ` in Crore ` in Crore

Less than 1 year 7.92 7.98 9.04
Between 2 to 5 years 30.44 31.03 34.94
Over 5 years 39.26 40.06 44.95
Weighted Average duration of the defined benefit obligation 8 years
Investment details of plan assets
Plan assets comprise of Schemes of Insurance - Conventional products
Sensitivity Analysis - Impact on DBO

31st March, 2017 31st March, 2016 1st April, 2015

` in Crore ` in Crore ` in Crore
Increase Decrease Increase Decrease Increase Decrease
Discount Rate (0.5% movement) (2.00) 2.13 (1.72) 1.83 (1.87) 1.99
Salary Escalation Rate (0.5% movement) 1.45 (1.44) 1.33 (1.31) 1.49 (1.46)
Withdrawal Rate (3% movement) 1.03 (1.52) 0.95 (1.32) 0.89 (1.26)
Assumptions

Discount Rate 7.00% 7.80% 7.80%

Salary Escalation Rate 7.50% 7.50% 7.50%
Withdrawal Rate 10.00% 10.00% 10.00%
Mortality Indian Assured Lives Mortality (2006 - 08) Ult. Modified
(iii) Compensated Absences

Present Value of Unfunded Obligation (16.87) (16.58) (25.93)

Expense recognised in Statement of Profit 2.36 1.58 2.17
and Loss
Discount rate (p.a.) 7.00% 7.80% 7.80%
Salary Escalation Rate (p.a.) 7.50% 7.50% 7.50%
56 Leases
Finance Lease
The company has evaluated certain arrangements based on facts and circumstances and have identified them in
the nature of lease as the fulfilment of the arrangements depend upon a specific asset and the company has right
to use the asset. After separating lease payments from the other elements in these arrangements, the company has
recognized plant and machinery as Assets taken under finance leases. The lease arrangements are for 15-20 years.
At the end of non cancellable period, the lessors have a put option to sell the underlying assets to the company.
Operating Lease
i) Embedded operating leases: The company has evaluated certain Power purchase arrangements based on
facts and circumstances and have identified them in the nature of lease as the fulfilment of the arrangements
depend upon a specific asset and the company has right to use the asset. After separating lease payments from
the other elements in these arrangements, the company has recognized these leases as operating leases. The
lease arrangements are for 5 years.
ii) Other leases: 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.

104 104 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Finance Operating Finance Operating Finance Operating
lease lease lease lease lease lease
Total minimum lease payments at the year 2,236.76 - 2,357.24 - 31.56 -
end
Less: amount representing finance charges 1,341.82 - 1,485.79 - 26.81 -
Present value of minimum lease payments 894.94 - 871.46 - 4.75 -
Lease payments for the year (accrual) 156.36 387.55 41.06 217.24 1.28 40.11
Not later than one year 214.24 530.07 178.01 297.36 1.92 79.13
Later than one year but not later than five 627.20 1,468.74 627.20 887.00 1.76 228.02
years
Later than five years 1,395.33 21.74 1,552.04 28.22 27.88 34.39
57 Earning Per Share

For the year For the year

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Net Profit/(Loss) as per statement of Profit & Loss (5,197.58) (4,356.96)
Weighted average number of shares for the purpose of 3,108,957,660 3,108,957,660
calculating Basic & Diluted earning per share (in nos.)
Basic & Diluted earning/(loss) per Equity share of ` 10 each (16.72) (14.01)
(in Rupees)
58 First time adoption of Ind AS
i) First Ind AS Financial statements:
These are the company’s first standalone financial statements prepared in accordance with Ind AS applicable
as per Section 133 of Companies Act, 2013 as per Companies (Indian Accounting Standards) Rules, 2015 for
the year ended 31st March 2017.
The accounting policies set out in Note no. 3 have been applied in preparing the financial statements for
the year ended 31st March 2017, the comparative information presented in these financial statements for the
year ended 31st March 2016 and in the preparation of an opening Ind AS balance sheet at 1st April 2015 (the
date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts
reported previously in financial statements prepared in accordance with the accounting standards notified
under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act
(previous GAAP or Indian GAAP).
This note provides an explanation of how the transition from previous GAAP to Ind AS has affected the
company’s financial position as on 1st April 2015 and 31st March 2016 and financial performance for the year
ended 31st March 2016.
ii) Optional exemptions availed
a. Business combinations
The company has availed the business combination exemption on first time adoption of Ind AS and
accordingly the business combinations prior to date of transition have not been restated to the accounting
prescribed under Ind AS 103 – Business combinations. The company applies the requirements of Ind AS
103 – Business combinations to business combinations occurring after the date of transition to Ind AS.
b. Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value measured as per the
previous GAAP for all of its items of property, plant and equipment, and use that as its deemed cost
as at the date of transition after making necessary adjustments for de-commissioning liabilities. This

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 105 105

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
exemption can also be used for intangible assets. Accordingly, the Company has elected to measure all
of its property, plant and equipment and intangible assets at their previous GAAP carrying value as its
deemed cost on the date of transition.
c. Long term foreign currency monetary item
A first-time adopter may continue the policy adopted for accounting for exchange differences arising
from translation of long-term foreign currency monetary items recognised in the financial statements for
the period ending immediately before the beginning of the first Ind AS financial reporting period as per
the previous GAAP.
The Company has opted for the above exemption for the long-term foreign currency monetary items
recognised upto 31st March 2016.
d. Investment in subsidiaries and associates
In separate financial statements, entities can measure investments in subsidiaries, jointly controlled
entities and associates at either:
• cost, determined in accordance with Ind AS 27
• deemed cost, defined as fair value
• deemed cost, defined as previous GAAP carrying amount
Accordingly, the Company has elected to measure all of its investments in subsidiaries, associates and
joint ventures at their previous GAAP carrying value.
e. Leases
This exemption allows first-time adopter to apply Appendix C of Ind AS 17 to determine whether an
arrangement existing at the date of transition to Ind ASs contains a lease on the basis of facts and
circumstances existing at the date of transition to Ind AS.
The company has elected to apply this exemption for all such transactions.
f. Designation of previously recognised financial instruments
This exemption allows the entity to designate an investment in an equity instrument as at fair value
through other comprehensive income on the basis of the facts and circumstances at the date of transition
to Ind AS.
The company has elected to apply this exemption for its investment in equity instruments.
g. Non-current assets held for sale and discontinued operations
This exemption requires non-current assets (or disposal groups) that meet the criteria to be classified as
held for sale to be carried at lower of its carrying amount and fair value less cost to sell as per Ind AS 105
and recognise directly in retained earnings any difference between that amount and the carrying amount
of those assets at the date of transition to Ind AS.
The company has elected to apply this exemption and measured the assets held for sale at lower of
carrying value and fair value less costs to sell at the date of transition.
iii) Mandatory exceptions applied
a. Estimates
The company’s estimates in Ind ASs at the date of transition, are required to be consistent with estimates
made for the same date in previous GAAP (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1st April 2015 are consistent with the estimates as at the same date made
in conformity with previous GAAP except where Ind AS required a different basis for estimates as
compared to the previous GAAP.
b. De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively
for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a
first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date
of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets
and financial liabilities derecognised as a result of past transactions was obtained at the time of initially
accounting for those transactions.

106 106 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
The company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of
transition to Ind AS.
c. Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets as per Ind AS
109 on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
d. Hedge Accounting
The company has used derivative financial instruments - Principal Only Swaps to hedge its foreign
currency risks. The company has designated various cash flow hedges and applied hedge accounting
principles to avoid profit or loss mismatch. All the hedges designated under previous GAAP are of types
which qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the company, before
the date of transition to Ind AS, has designated a transaction as hedge and also meets all the conditions
for hedge accounting in Ind AS 109. Therefore, the company continues to apply hedge accounting after
the date of transition to Ind AS.
Reconciliation of Equity and Total Comprehensive Income
(i) Reconciliation of Equity

Particulars Note As at As at
31st March, 2016 1st April, 2015
` in Crore ` in Crore
Equity as per Previous GAAP 8,616.60 14,112.66
Adjustment Gain/(Loss):
Treasury Shares reclassified to Equity a (766.07) (766.07)
Impact of classifying CRPS as a Financial Liability and b (61.14) (55.35)
measurement as per the Amortised Cost method
Impact of recognizing sale and leaseback - embedded finance c (272.16) (2,793.04)
leases as per Ind AS 17
Provision for credit losses as per Expected credit Loss method d (327.74) -
Others (17.31) (28.08)
Deferred Tax Impact on Above Items e 176.67 982.75
Deferred Tax Liability on Revaluation of Land and Plant & e (1,814.60) (1,872.68)
Machinery under previous GAAP
Equity as per IND AS 5,534.25 9,580.19
(ii) Reconciliation of Total Comprehensive Income

Particulars Note Year Ended

31st March, 2016
` in Crore
Net Loss as per IGAAP (5,800.14)
Adjustment Gain/(Loss):
Impact of classifying CRPS as a Financial Liability and measurement as per the b (5.80)
Amortised Cost method
Impact of recognizing sale and leaseback - embedded finance leases as per Ind c 2,520.88
AS 17
Provision for credit losses as per Expected credit Loss method d (327.74)
Others 4.03
Deferred Tax Impact on Above Items e (806.27)
Reversal of Deferred Tax Liability on Revaluation of Land and Plant & Machinery e 58.08
under previous GAAP
Net Loss as per IND AS (4,356.96)
Other Comprehensive Income (net of tax) f (48.97)
Total Comprehensive Income under Ind AS (4,405.93)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 107 107

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
(iii) Impact of IND AS adoption on Statement of Cash Flows for the year ended 31st March 2016:

31st March, 2016 IND AS 31st March, 2016

(IGAAP) Adjustment (IND AS)
` in Crore ` in Crore ` in Crore
A. Cash flow from operating activities 442.27 84.18 526.45
B. Cash flow from investing activities 1,729.47 8.90 1,738.37
C. Cash flow from financing activities (2,325.11) (93.08) (2,418.19)
(153.37) - (153.37)
Cash and cash equivalents at the 250.69 - 250.69
beginning of the year
Cash and cash equivalents at the end 97.32 - 97.32
of the year
153.37 - 153.37
a Impact of Treasury shares
Previous GAAP - The Company has classified Treasury Shares under other non current asset.
Ind AS - The Treasury Shares held by the entity amounting to ` 766.07 Crore have been reclassified from
Other non-current asset to Equity and disclosed separately under ‘Other Equity’. As per Ind AS 32, own equity
instruments reacquired by an entity i.e. ‘treasury shares’ shall be deducted from equity. No gain or loss shall be
recognised in profit or loss on the purchase, sale, issue or cancellation of an entity’s own equity instruments.
b Impact of 10% Cumulative Redeemable Preference Shares (CRPS)
Previous GAAP - CRPS were recognised as share capital. Dividends were recognized as and when proposed
by the Board of Directors.
Ind AS - On the transition date, CRPS of ` 43.60 Crore is reclassified from Equity into Financial Liabilities–
Borrowings. Preference Shares containing a contractual obligation to settle in cash and pay dividends are
classified as a financial liability.
CRPS is initially recognised at fair value i.e. proceeds minus transaction costs. Subsequently, it is measured
at amortized cost using the effective interest rate. The impact on this account amounting to ` 11.75 Crore has
been recognised in the Retained Earnings on 1st April 2015. Therefore total impact on Equity on transition date
amounts to ` 55.35 Crore. Subsequent impact i.e. finance cost of ` 5.80 Crore recognised in the statement of
profit and loss for the year ended 31st March, 2016.
c Impact of Sale and embedded lease back arrangement
Previous GAAP - A Business Undertaking comprising of Slurry Pipeline and its associated facilities were sold
and entered into a long term Right to Use Agreement to use the said assets and recognized a profit amounting
to ` 2,793.04 Crore in FY 2014-15. The transaction was annulled and the profit of ` 2,793.04 crores and related
Deferred Tax were reversed in FY 2015-16.
Ind AS - The above transaction was assessed as finance lease under Appendix C to Ind AS 17.Therefore, the
gain on sale of business undertaking is deferred over the period of the arrangement, i.e., ` 2793.04 crores and
related deferred tax has been adjusted in retained earnings on the date of transition. The commencement of
the Lease is w.e.f 1st April 2015.
On annulment of the said transaction in the year FY 2015-16, account balances have been reversed and impact
of ` 2,793.04 crores and related deferred tax is recognized in profit and loss for the year ended on 31st March
2016.
Previous GAAP - The Company sold a Business Undertaking, comprising of Air Separation Unit for ` 850
Crore and recognised a gain of ` 265.44 crores in the statement of profit and loss for the year ended 31st March
2016. The Company entered into a Job Work Agreement and recognised job work charges.
Ind AS - This transaction has been assessed as finance lease under Appendix C to Ind AS 17.
Therefore the gain of ` 265.44 crores on sale of business undertaking is deferred over the period of the
arrangement.
Net impact on account of this change on equity and total comprehensive income is ` 272.16 Crore in the year
FY 2015-16.

108 108 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
d Provision for credit losses as per Expected credit Loss method
Under previous GAAP, the Company had created allowance for financial assets based on incurred loss model.
Under Ind AS, impairment allowance has been calculated based on expected credit loss model. As a result,
provision for expected credit loss of ` 327.74 crores is recognised in Statement of Profit and Loss for the year
ended 31st March 2016.
e Deferred Tax
Deferred Tax Impact on Above Items
Previous GAAP required deferred tax accounting using the profit and loss approach, which focuses on
differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account
for deferred taxes using the balance sheet approach, which focuses on temporary differences between the
carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12
approach has resulted in recognition of deferred tax on new temporary differences which was not required
under Previous GAAP.
Deferred Tax Liability on Revaluation of Land and Plant & Machinery under previous GAAP
The Company has recognized revaluation reserve on revaluation of certain assets of the Company. Deferred
Tax was not recognized under the previous GAAP.
Under Ind AS, the revalued carrying amounts of these assets has been considered as deemed cost. The
revaluation has led to a temporary taxable difference between the book base and tax base of the respective
assets. Accordingly, deferred tax liability has been recognised and the impact of ` 1,872.67 Crore has been
charged to Other Equity on the transition date. Subsequently, the impact of reversal of deferred tax liability of `
58.08 crores has been recognised in the statement of profit and loss.
f Other comprehensive income (OCI)
Under previous GAAP, the Company was not required to present other comprehensive income (OCI) separately.
Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Ind AS profit or loss
is reconciled to total comprehensive income.
Items recognised in OCI mainly comprise of:
a) fair value changes and gains / losses on investments in equity instruments designated as fair value
through OCI on the date of transition
b) Remeasurements on defined benefit obligations
c) effective portion of gains and losses on the hedging instrument in a cash flow hedge
d) tax impacts on the above items has been recognised in OCI.
59 Production

Particulars Year Ended Year Ended

31st March, 2017 31st March, 2016
(a) Production *
Iron Ore Pellet MT 9,343,716 5,790,909
Hot Briquette Iron/Direct Reduced Iron MT 3,223,497 1,239,182
Hot Metal MT 3,166,487 2,916,674
Hot Rolled Coils/Cold Rolled Coils/Plates MT 5,034,389 3,301,338
Plates MT 536,506 513,375
Pipes MT 113,193 202,163
(b) Captive Consumption *
Iron Ore Pellet MT 7,808,275 4,207,137
Hot Briquette Iron MT 3,185,364 1,222,080
Hot Rolled Coils/ Plates** MT 337,822 320,543
* Including Trial Run if any.
** Including consumption of purchased materials 4,260 MT (Previous Year- 68,635 MT)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 109 109

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
60 Value of Imports calculated on CIF basis
Particulars Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Raw Materials (including PRCM & Fuel) 3,914.95 3,432.49
Stores & Spares 113.95 75.22
Capital Goods 3.02 15.12
4,031.92 3,522.83
61 Expenditure in Foreign Currency (on accrual basis)
Particulars Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
Interest 406.10 592.83
Commission 134.38 53.56
Professional Fees 5.63 19.26
Capital Contract & Services 0.12 1.33
Others 56.58 49.15
602.81 716.13
62 Earnings in Foreign Currency
Particulars Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crore ` in Crore
(a) FOB Value of Exports* 4,741.83 1,457.92
(b) Others
Freight recovered 229.72 78.72
Interest 44.07 39.56
5,015.63 1,576.20
* In addition to the above, the Company has also made exports (including deemed export through canalising agencies
as supporting manufacturer) amounting to ` 117.22 Crore (Previous Year ` 1,505.70 Crore) at a price linked to USD
but received in Indian Rupees.
63 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.
64 Current Liabilities includes current maturity of long term debt (repayable within one year as per existing repayment
schedule) and Long-Term Export Performance Bank guarantees (EPBG) crystalized into a fund based liability, for
which a repayment schedule is yet to be decided. The Company has been actively engaged in discussion with its
lenders to implement a restructuring scheme under the RBI guidelines. The restructuring scheme includes inter alia
following:
a. Ascertainment of sustainable debt.
b. Repayment schedule of the sustainable debt based on the residual useful life of the assets of the Company.
c. Infusion of fresh Equity.
d. Conversion of Inter Corporate Deposits (ICDs) from related party in to Cumulative Redeemable Preference
Shares (CRPS).
e. Conversion of part of the unsustainable debt in to Equity.
f. Conversion of balance unsustainable debt in to CRPS.
g. Alignment of Interest rates
The restructuring scheme is based on financial projections for future years contained in restructuring plan and as per
discussions with MECON Limited, appointed by the lenders as independent Techno Economic Viable (TEV) consultant
for the purpose of restructuring. MECON limited has submitted draft TEV report incorporating their assessment of the
company’s profitability in future years based on current performance and future potential of the Company.

110 110 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
Meanwhile on 13th June 2017, RBI directed the lenders to refer certain companies including Essar Steel India Ltd.
to National Company Law Tribunal (NCLT) under Insolvency Bankruptcy Code (IBC), 2016. The Company believes
that upon implementation of suitable restructuring/resolution plan, financial position of the Company shall improve
significantly.
65 Current 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 which was disputed by Commission
of Central Excise and issued a show cause notice dated 18.11.2008 alleging wrong availment of the CENVAT by the
company. 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.
Both the above show cause notices have been adjudicated by the Commissioner of Central Excise vide order dated
31.03.2017 wherein it has been held that DGCEI has no jurisdiction to investigate into the matters related to SEZ.
Further a demand of customs duty of ` 24.82 Crore for the period 21.03.2007 to 11.04.2007 has been confirmed, CVD
portion of Custom Duty ` 140.35 Crore which was availed by the company as Cenvat credit has been appropriated and
also appropriated the remaining amount of ` 20.99 Crore and credited it to Consumer welfare fund. The Commissioner
further held that the cenvat credit of ` 140.35 Crore is correctly availed by the company.
The Company is in process to file an appeal against the Commissioner’s order towards confirming the demand of `
24.82 Crore and appropriation of amount of ` 20.99 Crore.
66 Based on estimate of value of the businesses of M/s New Trinity Coal Inc. a subsidiary company (through a series of
holding companies) of Essar Steel Offshore Limited (a wholly owned subsidiary of the Company) by an independent
External Valuer, the Company has recognized provision towards impairment in the carrying amount of investments
and deposit in certain subsidiaries amounting to ` 2,334.60 Crore (US $ 360 million) as exceptional Item during the
year.
67 Details of Loans given, Investments made and Guarantee given covered U/S 186 (4) of the Companies Act,
2013 during the year :’

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
(a) Loan given (Inter Corporate Deposits) *
Essar Steel Middle East FZE 875.96 23.00
(b) Investment made (incl. Advance towards equity)
Essar Steel Offshore Limited - 84.89
* Loan has been given for business purposes.

68 Borrowings Note

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Long Term Borrowings Note
(1) Non Convertible Debentures
Secured by pari passu first charge on movable 342.21 319.54 344.18
fixed assets and mortgage of immovable
properties of the Company (except leasehold
rights on the Visakhapatnam Port Trust land
and Orissa ISP land). 13.4% Non-Convertible
Debentures principal balance redeemable on
annual basis during financial Year 2017-18
(57.93%), FY 2018-19 ( 42.07%) .
342.21 319.54 344.18

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 111 111

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(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 principal balance of loan is repayable in
quarterly instalments during Financial Year
2017-18 (47.89%),2018-19 (0.54%), 2019-20
(0.54%), 2020-21 (1.07%), 2021-22 (1.07%),
2022-23 (1.07%), 2023-24 (1.07%), 2024-25
(2.69%), 2025-26 (3.22%), 2026-27 (3.22%),
2027-28 (3.22%), 2028-29 (3.22%), 2029-30
(4.85%), 2030-31 (4.85%), 2031-32 (5.37%),
2032-33 (5.37%), 2033-34 (5.37%) & 2034-35
(5.37%),
(A) Loans carrying interest @ Bank Base
rate plus 3.75%. 4,972.41 4,620.26 4,540.03
(B) Loans carrying interest @ Bank Base 449.36 397.44 506.37
Rate plus 4.25%.
Secured by pari passu first charge on movable 580.54 581.22 540.47
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.
Loans carrying interest @6M Libor plus 4.30%
p.a. The Principal balance of Loan will be
converted to Rupee Loan during Financial year
2017-18.
Secured by pari passu first charge on 33.63 31.22 31.94
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. Loans carrying interest @ Bank
Base Rate plus 4.5 %. The principal balance of
loan is repayable in Financial Year 2017-18.
First pari passu charge on all present and future 523.82 512.16 468.25
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 . Loans
carrying interest @6M Libor plus 5% p.a. The
principal balance of loan is repayable in half
yearly installments during Financial Year 2019-
20 (5%), 2020-21 (12.5%), 2021-22 (20.%),
2022-23 (25%), 2023-24 (25%) & 2024-25
(12.5%)
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.

112 112 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
a) Loans carrying interest @6M Libor 141.04 138.87 127.34
plus 4.80% p.a. The principal balance
of loan is repayable in half yearly
instalments during Financial Year 2017-
18 (26.32%), 2018-19 (10.53%), 2019-
20 (14.74%),2020-21 (14.74%),2021-22
(16.83%) and 2022-23 (16.84%).
b) Loans carrying interest @6M Libor plus 429.69 417.64 382.35
4.80% p.a. The principal balance of loan
is repayable in 13 half yearly installments
during Financial Year 2017-18 (15%),
2018-19 (15%), 2019-20 (20%),2020-21
(25%) and 2021-22 (25%).
(c) Loans carrying interest @6M Libor plus 33.53 33.30 32.14
5.00% p.a. The principal balance of loan
is repayable in during Financial Year
2017-18.
(d) Loans carrying interest @6M Libor plus 249.38 235.38 241.71
5.00% p.a. The principal balance of loan
is repayable in annual instalments during
Financial Year 2017-18 (22.22%), 2018-
19 (15.56%), 2019-20 (15.56%), 2020-
21 (15.56%), 2021-22 (15.55%), 2022-
23 (15.55%).
(e) Loans carrying interest @6M Libor 1,106.78 1,045.43 1,015.40
plus 5.00% p.a. The balance loan is
repayable 10 half yearly instalments
during Financial Year 2017-18 (5%),
2018-19 (12.50%), 2019-20 (20%),
2020-21 (25%), 2021-22 (25%), 2022-23
(12.50%).
(f) Loans carrying interest @6M Libor plus 812.90 790.48 738.95
5.00% p.a. The principal balance of loan
is repayable in annual instalments during
Financial Year, 2017-18 (26.32%), 2018-
19 (14.74%), 2019-20 (14.74%), 2020-
21 (14.74%), 2021-22 (14.73%), 2022-
23 (14.73%).
g) Loans carrying interest @6M Libor plus 148.85 154.15 140.80
5.00% p.a. The principal balance of loan
is repayable in Financial Year, 2017-
18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22
(2.04%), 2022-23 (2.04%), 2023-24
(2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28
(6.11%), 2028-29 (6.11%), 2029-30
(9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34
(10.17%) and 2034-35 (10.17%)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 113 113

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
h) Loans carrying interest @6M Libor plus 93.54 97.32 96.41
5.00% p.a. The principal balance of loan
is repayable in Financial Year 2017-18
(1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22
(2.04%), 2022-23 (2.04%), 2023-24
(2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28
(6.11%), 2028-29 (6.11%), 2029-30
(9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34
(10.17%) and 2034-35 (10.17%).
i) Loans carrying interest @6M Libor plus 143.34 140.78 139.50
4.75% p.a. The principal balance of loan
is repayable in Financial Year 2017-18
(15.79%), 2018-19 (10.53%), 2019-20
(14.74%), 2020-21 (14.74%), 2021-22
(14.74%), 2022-23 (14.73%) and 2023-
24 (14.73%).
j) Loans carrying interest @6M Libor plus 284.39 280.51 257.22
5.00% p.a. The principal balance of loan
is repayable in Financial Year 2017-18
(20%), 2018-19 (10%), 2019-20(14%),
2020-21 (14%), 2021-22 (14%), 2022-23
(14%), and 2023-24 (14%.)
k) Loans carrying interest @6M Libor plus 98.49 98.11 89.99
5.00% p.a. The principal balance of loan
is repayable in Financial Year 2017-18.
l) Loans carrying interest @Bank Base 520.18 531.86 529.54
rate plus 3.75%. The principal balance of
loan is repayable in Financial Year 2017-
18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22
(2.04%), 2022-23 (2.04%), 2023-24
(2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28
(6.11%), 2028-29 (6.11%), 2029-30
(9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34
(10.17%) and 2034-35 (10.17%).

m) Loans carrying interest @Bank Base 259.98 272.28 270.06

rate plus 3.75%. The principal balance of
loan is repayable in Financial Year 2017-
18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22
(2.04%), 2022-23 (2.04%), 2023-24
(2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28
(6.11%), 2028-29 (6.11%), 2029-30
(9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34
(10.17%) and 2034-35 (10.17%).

114 114 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
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) Loans carrying interest @6M Libor plus 587.10 577.87 542.83
4.90% p.a. The principal balance of loan
is repayable in yearly instalments during
Financial Year 2017-18 (26.32%), 2018-
19 (14.74%), 2019-20 (14.74%),2020-21
(14.74%),2021-22 (14.73%) and 2022-
23 (14.73%).
b) Loans carrying interest @6M Libor plus 326.74 327.44 307.65
4.90% p.a. The principal balance of loan
is repayable in annual instalments during
Financial Year 2017-18 (13.40%), 2018-
19 (10.31%), 2019-20 (17.53%),2020-21
(17.53%),2021-22 (20.61%) and 2022-
23 (20.62%).
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. Principal
balance of Loan will be repaid during financial
year 2017-18 (22.64%), 2018-19 (0.80%),
2019-20 (0.80%), 2020-21 (1.60%), 2021-22
(1.60%), 2022-23 (1.60%), 2023-24 (1.60%),
2024-25 (3.99%),2025-26 (4.78%),2026-
27 (4.78%),2027-28 (4.78%),2028-
29 (4.78%),2029-30 (7.17%),2030-
31 (7.18%),2031-32 (7.98%),2032-33
(7.98%),2033-34 (7.98%) & 2034-35 (7.98%)
(A) Loans carrying interest @ Bank Base 842.80 776.09 842.42
Rate plus 3%.
(B) Loans carrying interest @ Bank Base 504.16 454.76 435.35
Rate plus 1.25%.
(C) Loans carrying interest @ Bank Base 224.58 197.27 202.47
Rate plus 3.5%.
(D) Loans carrying interest @ Bank Base 86.11 81.18 91.65
Rate plus 3.25%.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 115 115

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
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. Principal balance of loan will be
repaid in Quarterly Installments during financial
year 2017-18(10.49%),2018-19(11.06%),2019-
20(20.93%),2020-21(21.10%),2021-22
(20.85%),2022-23 (15.57%).
(A) Loans carrying interest @ Bank Base
Rate plus 2.50%. 3,033.63 2,833.04 2,767.84
(B) Loans carrying interest @ Bank Base
Rate plus 2.00%. 277.47 252.67 255.00
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. Principal balance of Loan will be
repaid in Quarterly Installments during financial
year 2017-18 (7.70%), 2018-19 (12.90%),
2019-20 (12.90%) , 2020-21 (12.55%), 2021-
22 (12.38%), 2022-23 (12.38%), 2023-24
(14.39%) 2024-25 (0.85%), 2025-26 (1.02%),
2026-27 (1.02%), 2027-28 (1.02%), 2028-29
(1.02%), 2029-30 (1.53%), 2030-31 (1.54%),
2031-32 (1.70%), 2032-33 (1.70%), 2033-34
(1.70%) and 2034-35 (1.70%).
(A) Loans carrying interest @ Bank Base
Rate plus 2.50%. 5,849.52 5,467.97 4,943.46
(B) Loans carrying interest @ Bank Base
Rate plus 2.30%. 568.61 503.01 487.04

116 116 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Secured by pari passu first charge on movable 162.60 169.61 157.33
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.
Loan carries interest @ 6M LIBOR plus 6.25%
p.a. Principal balance of Loan will be repaid
in Quarterly Installments during financial
year 2017-18 (7.50%), 2018-19 (15.00%),
2019-20 (15.00%), 2020-21 (15.00%), 2021-
22 (15.00%), 2022-23 (15.00%), 2023-24
(17.50%).
Loan carries interest @ Bank Base Rate. - - 12.97
Secured by subservient charge on moveable
fixed assets and current assets.The loan repaid
during Financial Year 2015-16.
Secured by subservient charge on all moveable - - 170.19
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. Loan fully repaid in FY16
Secured by Pledge of Shares held in EPOL & 47.20 54.29 139.64
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 carries Interest rate base rate plus 4.0%.
Principal Balance of Loan is due for repayment
in Financial Year 2016-17 .
Secured by pari passu first charge on movable 735.51 735.02 682.27
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.
Loan carries interest @ 6M LIBOR plus 4.80%
p.a. The Principal balance of loan is repayable
in 12 half yearly instalments of during financial
year 2017-18 (25%), 2018-19 (15.00%), 2019-
20 (15.00%), 2020-21 (20%) and 2021-22
(25%).

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 117 117

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Secured by pari passu first charge on entire 176.48 159.01 -
fixed assets of the company (except leasehold
rights on the Visakhapatnam Port Trust land and
Orissa ISP land), Second pari passu charge on
entire present and future current assests of the
company. Loan carries Bank Interest rate base
rate plus 4.75%. The principal balance of loan is
repayable in Financial Year 2017-18 (43.75%),
2018-19 (25.00%), 2019-20 (25.00%), 2020-21
(6.25%).
Secured by subservient charge on its fixed - - 112.32
movable and current assets of the Company.
The loan carries interest 12.50% p.a. The loan
is fully repaid during FY16.
Secured by subservient charge on its fixed - - 64.26
movable and current assets of the Company.
Loan carries Interest rate base rate plus 1.75%.
The loan is fully repaid during FY16.
Secured by subservient charge on its movable - - 195.74
fixed assets and current assets of the company
located at Hazira. The loan carries interest
12.50% p.a. The loan is fully repaid during
FY16.
24,304.35 22,967.63 22,558.90
(3) Buyers Credit Capital Expenditure
Secured by pari passu first charge on movable - - 51.12
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 converted into long term loans on
maturity.
- - 51.12
(4) Dollar Notes / Rupee Notes
Rupee Notes principal balance is repayable 218.13 230.72 227.49
up to 31st March, 2018 carry interest @ 8%
p.a. payable semi-annually. Dollar Notes is
repayable on 31st March , 2018 carry interest @
0.25% p.a. payable semi-annually.
(5) Payment of the Deferred Sales Tax Benefit 31.74 33.32 33.32
shall be made during financial year 2017-
18 (10.41%), 2018-19 (16.47%), 2019-
20 (21.04%), 2020-21 (21.04%), 2021-22
(15.83%), 2022-23 (10.64%), 2023-24 (4.57%)
for each year's collection (i.e. collection from
2005-06 to 2008-09) starting from April, 2017.

118 118 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(6) The Company has issued 4,35,98,951 67.55 61.14 55.35
10% Cumulative Redeemable Preference
Shares (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.
Current Borrowings
From Banks
Loan carries interest @ Bank Base Rate plus 4.75% 118.03 101.55 100.00
p.a. Secured by subservient charge on all fixed assets
of the company. The principal balance of Loan is due
for repayment during 2015-16
118.03 101.55 100.00

Other Current Financial Liabilities :

(1) Invoked Advance against Export
Performance Bank Guarantee
(a) Secured by pari passu first charge on 7,056.88 6,377.72 -
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.
(b) Secured by pari passu first charge on 617.40 592.33 -
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.
7,674.28 6,970.05 -
(2) Invoked Standby Letter of Credit
Secured by pari passu first charge on all 315.96 - -
present and future fixed assets of the Company
including all the land of Company (except
leasehold rights on the Vishakhapatnam Port
Trust land and Orissa ISP land)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 119 119

 Essar Steel India Limited

Notes to Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
Secured by pari passu first charge on all 143.63 - -
present and future fixed assets of the Company
including all the land of Company (except
leasehold rights on the Vishakhapatnam Port
Trust land and Orissa ISP land) also secured by
second pari passu charge on the present and
future current assets of the Company
459.59 - -
(3) Advance against Export Performance Bank
Guarantee
Secured by pari passu first charge on movable 911.51 967.85
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.
(4) Working Capital Loans - From Banks
Working Capital Loans are secured by pari 8,764.82 5,597.29 2,026.02
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), Corporate Guarantee of Essar
Investments Limited and Personal guarantee of
Promoters upto ` 1,120 Crs
8,764.82 5,597.29 2,026.02
(5) Buyers' credit for Operational Expenditure
and acceptance under Letter of credit
Secured by margin deposits with the banks & 740.15 2,509.69 4,028.54
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), Corporate
Guarantee of Essar Investments Limited
and Personal guarantee of Promoters upto
` 1,120 Crs
740.15 2,509.69 4,028.54

69 The figures of the previous year has been regrouped where necessary to conform to current year’s classification.

For and on behalf of the Board of Directors of Essar Steel India Limited
Dilip Oommen Rajiv Kumar Bhatnagar
Managing Director & Dy. CEO Director (Projects)

Suresh Jain Pankaj S Chourasia

Chief Financial Officer Company Secretary

Mumbai, 1st August, 2017

120 120 41 st A N N U A L R E P ORT 2016-17


INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ESSAR STEEL INDIA LIMITED
Report on the Consolidated Ind AS Financial Statements
We have audited the accompanying consolidated Ind AS
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, 2017, the Consolidated Statement of Profit
and Loss (including Other Comprehensive Income), the
Consolidated statement of Cash Flows, the Consolidated
Statement of Changes in Equity, for the year then ended
and a summary of the significant accounting policies and
other explanatory information (hereinafter referred to as
“the consolidated Ind AS financial statements”).
Management’s Responsibility for the Consolidated Ind
AS Financial Statements
The Holding Company’s Board of Directors is responsible
for the preparation of these consolidated Ind AS 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 including
other comprehensive income, consolidated cash flows
and consolidated statement of changes in equity of the
Group including its associates in accordance with the
accounting principles generally accepted in India, including
the Indian Accounting Standards (Ind AS) prescribed
under Section 133 of the Act, read with the relevant rules
issued thereunder. 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 its associates 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 Ind AS 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 Ind AS financial statements by the Directors of
the Holding Company, as aforesaid.
Auditors’ Responsibility
Our 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.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
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 Ind As financial statements. The procedures
selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the
consolidated Ind As 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 Ind As financial
statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances.
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 Ind As 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 Other Matters paragraph below,
is sufficient and appropriate to provide a basis for our
qualified audit opinion on the consolidated Ind As financial
statements.
Basis for Qualified Opinion
1. The consolidated Ind AS financial statements
include the unaudited consolidated financial
statements/financial information of twenty six step
down subsidiaries whose consolidated financial
statements/financial information reflect total assets
(net) of ` 1,017.90 Crore as at 31st March, 2017, total
revenue of ` Nil and net cash outflows amounting
to `0.24 Crore for the year ended on that date, as
considered in the consolidated Ind AS financial
statements. The consolidated Ind AS financial
statements also include the Group’s share of net
loss of `1.82 Crore for the year ended 31st March,
2017, as considered in consolidated Ind AS financial
statements, in respect of three associates, whose
financial statements have not been audited. These
financial statements have been furnished to us by
the Management and our opinion on the consolidated
Ind AS financial statements, in so far as it relates to
the amounts and disclosures included in respect of
these subsidiaries and associate, and our report in
terms of sub-section (3) of Section 143 of the Act,
in so far as it relates to the aforesaid subsidiaries
and associate, is based solely on such unaudited
information provided by the Management.
121 121
 Essar Steel India Limited
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 the Other Matters paragraph, except for
the effects of the matters described in the Basis for Qualified
Opinion paragraph above, the aforesaid consolidated Ind
AS 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 as at 31st March, 2017, and
their consolidated loss, consolidated total comprehensive
income, their consolidated cash flows and consolidated
statement of changes in equity 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 no. 5(c) and 13 regarding recognition of
` 4,694.44 crore as Deferred tax asset on unabsorbed
depreciation, carried forward business losses
and certain other items. Recognition of Deferred
Tax asset has been qualified in our audit report till
previous year to the extent it was not meeting the
criteria of ‘virtual certainty supported by convincing
evidence’ as required under Accounting Standard
(AS) 22-Accounting for taxes on Income, applicable
until previous year. However, from current year,
Indian Accounting Standard 12 - Income Taxes (Ind
AS12) has become applicable under which Deferred
tax asset shall be recognised if future taxable profits
are probable. Further, under directions of RBI
and the decision of High court at Gujarat, Interim
Resolution Professional (IRP) under Insolvency and
Bankruptcy code, 2016 (IBC) has been appointed
as a result of which, the resolution of Company’s
debt restructuring is more likely to happen within a
stipulated time frame as against liquidation of assets.
In view of the robust improvement in the operating
performance of the Company in the current year
and a time bound restructuring plan as stipulated in
the IBC which is now applicable to the Company,
the Company believes that upon implementation
of suitable restructuring / Resolution plan, there is
reasonable probability of sufficient taxable income in
the future for utilizing the above Deferred Tax Asset.
2. Note 65 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,
particularly after recall of bank loan on 7th December,
2015 of outstanding dues of USD 450.67 Million
(USD 526.68 Million as on 31st March 2017) taken
122 122
by Essar Steel Offshore Limited, a subsidiary, for
the purpose of investment in Trinity. For reasons
explained in the Note, a provision of ` 2,334.60 crore
has been made for diminution in the carrying values
of assets of Trinity in the Consolidated Financial
Statements.
3. Note 63 regarding Group’s current liabilities
exceeding its current assets by ` 37,610.01 crore as
at 31st March, 2017 (previous year 29,868.85 crore).
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.
4. Note No. 56(4) regarding cross subsidy surcharge
amounting to ` 536.34 Crore claimed by Dakshin
Gujarat Vij Company Limited for the period from
June 2013 to March 2016. For reasons explained in
the Note, the Company has reversed/not provided
the said amount during the year under report.
Our opinion is not qualified in respect of the above
matters.
Other Matters
We did not audit the financial statements of four subsidiaries
whose financial statements reflect total assets (net) of
` 1294.64 Crore as at 31st March, 2017, total revenues
of ` 2,385.30 Crore and net cash outflows amounting to
` 6.18 Crore for the year ended on that date, as considered
in the consolidated Ind AS financial statements. We also
did not audit financial statements of four associates whose
financial statements reflect Group’s share of net loss of
` 34.05 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 Ind
AS 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) 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.
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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on
our audit and on the consideration of the reports of
the other auditors on separate financial statements
of subsidiaries and associates incorporated in India,
referred in the Other Matters paragraph above, 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
41 st A N N U A L R E P ORT 2016-17

for the purposes of our audit of the aforesaid
consolidated Ind AS 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 Ind
AS 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
(including other comprehensive Income),
the Consolidated Statement of Cash Flows
and the consolidated statement of Changes
in Equity dealt with by this Report are in
agreement with the relevant books of account
maintained for the purpose of preparation of
the consolidated Ind AS 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.
e) In our opinion, the matter described in
paragraph 3 under the Emphasis of Matters
paragraph may have an adverse effect on the
functioning of the Company.
f) On the basis of the written representations
received from the directors of the Holding
Company as on 31st March, 2017 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,
2016 from being appointed as a director in
terms of Section 164 (2) of the Act.
g) The qualification relating to the unaudited
financial statements of subsidiaries/associate
are as stated in the Basis for Qualified Opinion
paragraph above.
h) With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and the operating effectiveness
of such controls, refer to our separate Report
in Annexure to this report.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
i) 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, as amended, 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 Ind AS financial
statements vide Note 56.
(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.
(iv) The Holding Company has provided
requisite disclosures in the consolidated
Ind AS financial statements as
regards its holding and dealings in
Specified Bank Notes as defined in
the Notification S.O. 3407(E) dated
the 8th November, 2016 of the Ministry
of Finance, during the period from 8th
November 2016 to 30th December
2016. Based on audit procedures
performed and the representations
provided to us by the management
we report that the disclosures are in
accordance with the relevant books
of account maintained by those
entities for the purpose of preparation
of the consolidated Ind AS financial
statements and as produced to us and
other auditors by the management of
the respective group entities.
For M. M. Chaturvedi & Co.,
Chartered Accountants
(Firm Reg. No. 112941W)
Apurva Chaturvedi
Mumbai Partner
25th November, 2017 Membership No. 126439
123 123
 Essar Steel India Limited
ANNEXURE A TO THE INDEPENDENT AUDITORS’
REPORT ON THE CONSOLIDATED Ind AS FINANCIAL
STATEMENTS
(Referred to in paragraph 1(h) under ‘Report on Other Legal
and Regulatory Requirements’ section of our report of even
date.)
Our reporting under clause (i) of Sub-section 3 of Section
143 of the Act on consolidated financial statements includes
one subsidiary company and three associate companies
incorporated in India, to which the aforesaid provision of the
Act is applicable, which have been audited by other auditors
(hereinafter collectively referred to as “respective entities”)
and our report in respect of these entities is based solely
on the reports of the other auditors under the aforesaid
provision of the Act.
In respect of three associate company incorporated in
India, which has been included in the consolidated financial
statements based on unaudited financial statements of
such entity provided to us by the Management, whilst in our
opinion, and according to the information and explanations
given to us, reporting under the aforesaid provision of the
Act is applicable in respect of the said entity, since this
entity is unaudited, the possible effects of the same on our
reporting under the aforesaid provision of the Act in the
case of these consolidated financial statements has not
been considered.
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Act
We have audited the internal financial controls over financial
reporting of the Holding Company (“the Company”) and
respective entities as at 31 March 2017 in conjunction with
our audit of the consolidated Financial Statements of the
Company as of and for the year ended on that date.
Management’s Responsibility for Internal Financial
Controls
The Company’s and respective entities’ managements
are responsible for establishing and maintaining internal
financial controls based on the internal control over
financial reporting criteria established by the Company and
respective entities considering the essential components
of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting issued
by the Institute of Chartered Accountants of India (“ICAI”).
These responsibilities include the design, implementation
and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and
efficient conduct of their business, including adherence
to company’s and respective entities’ policies, the
safeguarding of their assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable
financial information, as required under the Act.
124 124
Auditors’ Responsibility
Our responsibility is to express an opinion on the
Company’s and respective entities’ internal financial
controls over financial reporting based on our audit and
audit carried out by other auditors. We conducted our audit
in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance
Note”) and the Standards on Auditing issued by ICAI and
prescribed under section 143(10) of the Act, to the extent
applicable to an audit of internal financial controls, both
applicable to an audit of Internal Financial Controls and,
both issued by the ICAI.
Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting
was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
depend on our judgement, including the assessment of the
risks of material misstatement of the financial statements,
whether due to fraud or error. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Company’s and
respective entities’ internal financial controls system over
financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial reporting
is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A
company’s internal financial control over financial reporting
includes those policies and procedures that
(1) Pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the
company;
(2) Provide reasonable assurance that transactions
are recorded as necessary to permit preparation of
financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the company are being made only in
41 st A N N U A L R E P ORT 2016-17

accordance with authorisations of management and
directors of the company; and
(3) Provide reasonable assurance regarding prevention
or timely detection of unauthorised acquisition, use,
or disposition of the company’s assets that could
have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and
not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting to future
periods are subject to the risk that the internal financial
control over financial reporting may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Essar Steel India Limited
Opinion
In our opinion, after considering audit reports of the auditors
of respective entities, the Company and respective entities,
which are companies incorporated in India, have, in all
material respects, an adequate internal financial controls
system over financial reporting and such internal financial
controls over financial reporting were operating effectively
as at March 31, 2017, based on the internal control over
financial reporting criteria established by the Company and
respective entities considering the essential components
of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued
by the ICAI.
For M. M. Chaturvedi & Co.,
Chartered Accountants
(Firm Reg. No. 112941W)
Apurva Chaturvedi
Mumbai, Partner
25th November, 2017 Membership No. 126439
125 125
 Essar Steel India Limited

Consolidated Balance Sheet as at 31st March, 2017

` in Crore
Particulars Note As at As at As at
No. 31st March, 2017 31st March, 2016 1st April, 2015
Assets
Non Current Assets
Property, Plant and Equipment 8(a) 43,433.37 46,440.49 45,125.83
Intangible Assets 8(b) 18.34 17.48 24.31
Capital Work-in-Progress 4,073.77 3,396.75 4,582.37
47,525.48 49,854.72 49,732.51
Financial Asset
Investments in Subsidiaries and Associates 9 530.87 566.74 664.38
Other Investments 10 4.09 14.01 188.05
Other Non Current Financial Assets 11 223.09 179.56 248.68
758.05 760.31 1,101.11
Other Non-Current Assets 12 543.79 536.93 544.40
Deferred Tax Assets (net) 13 4,694.44 3,228.40 1,196.47
Current Assets
Inventories 14 2,754.18 2,332.21 2,709.56
Financial Asset
Trade Receivables 15 1,230.69 984.27 1,491.20
Cash and Bank Balances 16 383.66 108.42 281.99
Other Bank Balances 17 384.67 437.90 555.39
Current Loans and Advances 18 384.32 479.94 540.17
Derivative Financial Assets 19 - 0.11 8.04
Other Current Financial Assets 20 20.50 1,432.42 3,917.04
2,403.84 3,443.06 6,793.83
Other Current Asset 21 3,106.86 2,934.01 4,287.58
Current Tax Assets (Net) 22 44.35 8.46 -
TOTAL 61,830.99 63,098.10 66,365.46
Equity and Liabilities
Equity
Equity Share Capital 23 3,109.63 3,109.63 3,109.63
Other Equity 24 (7,083.24) (1,320.81) 2,969.34
Non-Controlling Interest 1.56 - -
(3,972.05) 1,788.82 6,078.97
Non Current Liabilities
Financial Liabilities
Non Current Borrowings 25 19,255.86 22,046.61 26,907.79
Other Non Current Financial Liabilities 26 - - 6,985.98
Derivative Financial Liabilities 27 21.74 60.66 219.86
19,277.60 22,107.27 34,113.63
Other Non Current Liabilities 28 225.62 243.32 3,403.38
Non Current Provisions 29 380.58 371.71 360.73
Current Liabilities
Financial Liabilities
Current Borrowings 30 13,589.72 12,701.95 8,937.77
Trade Payables 31 5,052.86 4,404.31 3,699.31
Derivative Financial Liabilities 32 6.24 162.82 362.65
Other Current Financial Liabilities 33 25,752.35 15,926.34 4,991.83
44,401.17 33,195.42 17,991.56
Other Current Liabilities 34 1,435.83 4,057.69 4,334.77
Current Provisions 35 82.24 1,333.87 82.42
TOTAL 61,830.99 63,098.10 66,365.46
Notes to Consolidated Financial Statements form an integral part of the Balance Sheet.
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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 25th November, 2017

126 126 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Consolidated Statement of Profit and Loss for the year ended 31st March, 2017
` in Crore
Particulars Note For Year ended For Year ended
No. 31st March, 2017 31st March, 2016
Income
Revenue from Operations 36 23,148.19 15,649.69
Other Income 37 184.11 528.19
23,332.30 16,177.88
Expenses
Cost of Materials Consumed 38 13,064.10 9,613.67
Purchase of Traded Goods 150.27 160.50
Energy Cost 39 3,075.66 1,893.60
(Increase)/Decrease in Inventories of Finished Goods, 40 (487.66) 147.25
Work in Progress and Stock in Trade
Employee Benefits Expense 41 442.86 466.52
Excise Duty on Sale of Goods 1,856.85 1,268.79
Other Expenses :
Manufacturing & Asset Maintenance 42 1,322.75 969.79
Administrative Expenses 43 311.21 673.28
Selling & Distribution Expenses 44 604.96 478.56
20,341.00 15,671.96
Profit before Finance Costs, Exchange Variation 2,991.30 505.92
and Derivative Gains/ Losses, Depreciation /
Amortisation, Exceptional and Tax
Finance Costs 45 5,957.60 5,134.30
Exchange Variation & Derivative Losses(net) 46 185.39 443.37
Depreciation / Amortization Expense 2,063.43 2,060.82
Profit / (Loss) before Exceptional and Tax (5,215.12) (7,132.57)
Exceptional Items (Expense) / Income 47 (1,921.28) 633.82
Profit / (Loss) before Tax (7,136.40) (6,498.75)

Tax Expense/ (Benefit) 48 (1,552.06) (2,167.46)

Profit / (Loss) after Tax for the period (5,584.34) (4,331.29)
Add: Share of Profit / (Loss) from Associates (35.87) (72.09)
Profit / (Loss) for the period (5,620.21) (4,403.38)
Less: Non Controlling Interest 0.16 -
Profit / (Loss) for the period (Owners) (5,620.37) (4,403.38)
Other Comprehensive Income 49
A (i) Items that will not be reclassified to profit or (25.37) 2.73
loss
(ii) Income tax relating to items that will not be 8.98 0.19
reclassified to profit or loss
B (i) Items that will be reclassified to profit or loss (9.99) (79.34)
(ii) Income tax relating to items that will be 3.46 27.45
reclassified to profit or loss
Total other comprehensive income (22.92) (48.97)
Total Comprehensive Income for the period (5,643.29) (4,452.35)
(Comprising Profit (Loss) and Other Comprehensive
Income for the period)
Earning/(Loss) per Share (in Rupees) 60 (18.08) (14.16)
Basic [Nominal value of Shares ` 10 each (Previous Year
` 10 each)]
Diluted [Nominal value of Shares ` 10 each (Previous
Year ` 10 each)]
Notes to Consolidated Financial Statements form an integral part of the Profit & Loss
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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 25th November, 2017

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 127 127

 Consolidated Statement of Changes in Equity for the year ended 31st March 2017

128 128
(` in Crore)
Particulars Treasury Reserves and Surplus Fair Value Hedging Attributable Non- Total
shares Capital Capital Securities General Foreign Foreign Share in Consolidation Revaluation Retained through Other Reserve to Owners Controlling
Reserve Redemption Premium Reserve Currency Currency Reserve of Reserve Reserve Earnings Comprehensive of the Interest
Reserve Account Monetary Translation Associates/ Income- Equity Parent
Item Reserve Subsidiaries Instrument
Translation
Difference
Opening Balance as on 1st April, 2015 (766.07) 12.73 202.92 7,814.61 77.51 (62.49) (713.05) 1.10 - 4,565.13 (7,802.04) - (361.01) 2,969.34 - 2,969.34
Profit / (Loss ) for the year - - - - - - - - - - (4,403.38) - - (4,403.38) - (4,403.38)
Other Comprehensive Income / (Loss) - - - - - - - - - - - (48.97) - (48.97) - (48.97)
for the year
Essar Steel India Limited

Transfer to Retained Earnings - - - - - - - - - - - 51.88 (51.88) - - -

Total Comprehensive Income for - - - - - - - - - - (4,403.38) 2.91 (51.88) (4,452.35) - (4,452.35)
the year
Additional depreciation (transfer to - - - - - - - - - (109.74) 109.74 - - - - -
Retained Earnings)
Effect of foreign exchange rate - - - - - (14.48) (197.79) - - - - - - (212.27) - (212.27)
variations during the year
Transferred to statement of Profit and - - - - - 65.89 - - - - - - 308.58 374.47 - 374.47
Loss during the year
Balance as on 31st March, 2016 (766.07) 12.73 202.92 7,814.61 77.51 (11.08) (910.84) 1.10 - 4,455.39 (12,095.68) 2.91 (104.31) (1,320.81) - (1,320.81)
Profit/ (Loss) for the year - - - - - - - - - - (5,620.37) - - (5,620.37) 0.16 (5,620.21)
Other Comprehensive Income (Loss) - - - - - - - - - - - (22.92) - (22.92) - (22.92)
for the year
Transfer to Retained Earnings - - - - - - - - - - - 6.53 (6.53) - - -
Total Comprehensive Income for - - - - - - - - - - (5,620.37) (16.39) (6.53) (5,643.29) 0.16 (5,643.13)
the year
Additional depreciation (transfer to - - - - - - - - - (133.14) 133.14 - - - - -
Retained Earnings)
Effect of foreign exchange rate - - - - - 3.70 94.42 - - - - - - 98.12 - 98.12
variations during the year
Addition on account of Acquisition of - - - - - - - - (329.16) - - - - (329.16) 1.40 (327.76)
Subsidiaries
Transferred to statement of Profit and - - - - - 1.06 - - - - - - 110.84 111.90 - 111.90
Loss during the year
Balance as on 31st March, 2017 (766.07) 12.73 202.92 7,814.61 77.51 (6.32) (816.42) 1.10 (329.16) 4,322.25 (17,582.91) (13.48) - (7,083.24) 1.56 (7,081.68)
Notes to Financial Statements form an integral part of statement of changes in equity.

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

Apurva Chaturvedi Dilip Oommen Rajiv Kumar Bhatnagar

Partner Managing Director & Dy. CEO Director (Projects)

Suresh Jain Pankaj S Chourasia

41 st A N N U A L R E P ORT 2016-17
Mumbai, 25th November, 2017 Chief Financial Officer Company Secretary
 Essar Steel India Limited

Consolidated Cash Flow Statement for the year ended 31st March, 2017
(` in Crore)
Particulars For the Year ended For the Year ended
31st March, 2017 31st March, 2016
A. Cash Flow from Operating Activities
Net Profit/(Loss) before Taxation (7,136.40) (6,498.75)
Adjustments for -
Depreciation / Amortisation 2,063.43 2,060.82
Loss on Sale/Write Off of Fixed Assets (Net) - 0.76
Gain due to reclassification of Finance Lease - (254.83)
Profit on Sale of Non Current Investment (25.03) (0.01)
Exceptional Items Expense/ (Income) 1,918.40 (223.90)
Finance Costs 5,957.61 4,897.43
Exchange Variation & Derivatives (Net) 169.59 648.53
Interest on Deposit with Banks and Others (101.07) (211.71)
Amortisation of Deferred Gain (17.70) (4.42)
Allowance for Doubtful Debt - 221.18
Provision for Impairment in Investment - 106.56
Liabilities / Provision no longer required written back (net) - (404.80)
9,965.22 6,835.59
Operating Profit before Movements in Operating Assets and 2,828.82 336.84
Liabilities
Movements in Operating Assets and Liabilities:
Increase in Trade Payables 992.33 712.36
Increase/ (Decrease) in Other Financial Current Liabilities 220.33 (227.02)
Increase/ (Decrease) in Other Current Liabilities (395.06) 131.00
Increase/ (Decrease) in Long Term Provisions 3.11 (7.90)
Increase /(Decrease) in Short Term Provisions (0.50) (1.74)
(Increase) / Decrease in Inventories (259.96) 377.36
(Increase) / Decrease in Trade Receivables (213.75) (125.80)
(Increase) / Decrease in Short Term Loans and Advances (13.26) 721.33
(Increase) / Decrease in Other Current Assets (32.68) (310.64)
(Increase) / Decrease in Other Non Current Assets (4.83) 1.27
Decrease in Other Current Financial Assets 7.12 35.50
Foreign Currency Translation Reserve (0.59) 3.86
302.26 1,309.59
Cash Generated from Operations 3,131.09 1,646.44
Direct Taxes (Paid)/Refunded (net) (17.07) (8.90)
Net Cash Generated from Operating Activities 3,114.01 1,637.54

B. Cash Flow from Investing Activities

Purchase of Fixed Assets, including intangible assets, Capital (172.86) (172.08)
Work in Progress, Capital Advances and Trial Run Profits/Loss
Proceeds from Sale of Fixed Assets - 2,324.46
Proceeds from Sale of Non Current Investments - 33.88
Proceeds from redemption of Non Current Investments 2.05 1.93

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 129 129

 Essar Steel India Limited

Consolidated Cash Flow Statement for the year ended 31st March, 2016
(` in Crore)
Particulars For the Year ended For the Year ended
31st March, 2017 31st March, 2016
Purchase of Non Current Investments (including Share - (1,389.87)
Application Money)
Interest Income 75.94 184.69
Inter Corporate Deposit Given/ (Refund) (Net) (4.38) 46.79
Refund of Deposit Placed with Banks 82.00 81.83
Net Cash used/generated in/from Investing Activities (17.25) 1,111.61

C. Cash Flow from Financing Activities

Proceeds from Borrowings (net) 236.80 13,576.47
Repayment of Borrowings (86.13) (4,011.65)
Advance against Export Performance Bank Guarantee (35.92) (6,948.31)
Finance Cost paid (2,757.28) (4,064.87)
Exchange Variation & Derivatives (net) (248.48) (1,474.33)
Net Cash Generated from Financing Activities (2,891.01) (2,922.69)
Net Increase/(Decrease) in Cash and Cash Equivalents 205.75 (173.54)

Cash and Cash Equivalents at the beginning of the year (see 109.02 282.56
Note 3 below)
Addition due to acquisition of Subsidiary 69.48 -
Cash and Cash Equivalents at the end of the year
(see Note 3 below) 384.25 109.02
Net Increase/(Decrease) in Cash and Cash Equivalents 205.75 (173.54)

Notes:
1 The above Cash Flow Statement has been prepared using the “indirect method” set out in IND AS 7 - Statement of
Cash Flows.
2 Previous year’s figures have been regrouped where necessary to conform with Current Year’s classification.
3 Cash and Cash Equivalents included in the Cash Flow Statement comprise the following Balance Sheet amounts :

(` in Crore)
As at As at
31st March, 2017 31st March, 2016
Cash and Cash Equivalents (Refer Note 16) 383.66 108.42
Less: Exchange Variation Gain (0.59) (0.60)
Cash and Cash Equivalents at the end of the year 384.25 109.02

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., Dilip Oommen Rajiv Kumar Bhatnagar
Chartered Accountants Managing Director & Dy. CEO Director (Projects)

Apurva Chaturvedi Suresh Jain Pankaj S Chourasia

Partner Chief Financial Officer Company Secretary

Mumbai, 25th November, 2017

130 130 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
1. Nature of Operations / Corporate Information
The Company is a public limited company incorporated and domiciled in India. The address of its registered office is
27th Km, Surat Hazira Road, Hazira, Dist- Surat. The Company owns and operates an integrated steel manufacturing
facility comprising the unit for manufacturing of flat rolled products at Hazira, a Precoated facility at Pune, a Beneficiation
Plant at Kirandul and Dabuna, Slurry Pipeline, Pelletisation Plant at Vizag and at Paradeep. The Company also
operates Processing and Distribution centers, Hypermarts and Express Marts at various locations across India. 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.
The Consolidated financial statements for the year ended 31st March 2017 were approved by the Resolution
Professional on the representation and conformation of management and he has authorised to issue the same on
25th November, 2017. Please also refer Report of Resolution Professional in this regard.
2. Basis of Preparation
The Consolidated Financial Statements have been prepared to comply in all material aspects with the Accounting
Standards notified under Section 133 of Companies Act, 2013 as per Companies (Indian Accounting Standards (Ind
AS)) Rules, 2015 and other relevant provisions of the Companies Act, 2013 and rules framed thereunder. Till the
year ended 31 March 2016 the financial statements of the company have been prepared as Companies (Accounting
Standards) Rules, 2006 as amended and other relevant provisions of the Companies Act, 2013 and rules framed
thereunder. These are the first Ind AS Financial statements of the company. As per the principles of Ind AS 101, the
transition date to Ind AS is 1 April 2015 and hence the comparatives for the previous year ended 31 March 2016 and
balances as on 1 April 2015 have been restated as per the principles of Ind AS, wherever deemed necessary. Refer
note 61 for understanding the transition from previous GAAP to Ind AS and its effect on the company’s financial
position, financial performance and cash flows.
The Consolidated Financial Statements have been prepared under the historical cost, except for certain financial
assets and liabilities (including derivative instruments) measured at fair value at the end of each reporting.
3 Principles of consolidation and equity accounting
Subsidiaries
Subsidiaries are entities over which the Company has control. The Company controls an entity when the Company
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the relevant activities of that entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Company.
The Company combines the financial statements of its subsidiaries line by line adding together like items of assets,
liabilities, equity, income and expenses. Intra-Company transactions, balances and unrealised gains on transactions
between entities within the Company are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Company. Non-controlling interests in the
results and equity of subsidiaries are shown separately in the Consolidated Statement of Profit and Loss, Consolidated
Statement of Changes in Equity and the Consolidated Balance Sheet respectively.
Associates and equity method accounting
Associates are entities over which the Company has significant influence but not control or joint control. Investments
in associates are accounted for using the equity method of accounting, after initially being recognised at cost.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the Company’s share of the post-acquisition profits or losses of the investee in the Consolidated Statement
of Profit and Loss, and the Company’s share of other comprehensive income of the investee in Other Comprehensive
Income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the
carrying amount of the investment. When the Company’s share of losses in an equity-accounted investment equals
or exceeds its interest in the entity, including any other unsecured long-term receivables, the Company does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealised
gains on transactions between the Company and its Associates and Joint Ventures are eliminated to the extent of the
Company’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed
where necessary to ensure consistency with the policies adopted by the Company. The carrying amount of equity
accounted investments are tested for impairment.
The financial statements of subsidiaries and associates consolidated are drawn upto the same reporting date as that
of the Company.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 131 131

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Changes in ownership interests
The Company treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the Company. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or received
is recognised within equity.
When the Company ceases to consolidate or equity account for an investment because of a loss of control, joint
control or significant influence, any retained interest in the entity is re-measured to its fair value with the change in
carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in Other Comprehensive Income in respect of that entity are accounted for as if the
Company had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised
in Other Comprehensive Income are reclassified to the Statement of Profit and Loss. If the ownership interest in a
joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share
of the amounts previously recognised in Other Comprehensive Income are reclassified to the Statement of Profit and
Loss where appropriate.
4 Statement of Significant Accounting Policies
(i) Property, Plant & Equipment
On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant
and equipment recognised as at 1 April 2015 measured as per the previous GAAP and use that carrying value
as the deemed cost of the property, plant and equipment.
Property, Plant & Equipment are stated at cost, 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 property, plant & equipment are also
included to the extent they relate to the period till such assets are ready for their intended use. In respect of
accounting periods commencing on or after 7th December, 2006, exchange differences arising on reporting of
the long-term foreign currency monetary which are recognised in the financial statements till the period ending
31 March 2016 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 assets and are depreciated
over the balance life of the asset, if these monetary items pertain to the acquisition of a depreciable property,
plant & equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. When a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other
repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
(ii) 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.
(iii) Expenditure on Substantial Expansion
All direct capital expenditures 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.
(iv) Depreciation and Amortisation
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 (SLM). Depreciation on additions to / deletions from property, plant & equipment 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

132 132 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
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 Average useful life as

Companies Act, 2013 per Technical Evaluation
(Years) (Years)
Sinter Plant, Rolling Mill and Blast Furnace 20 30
Power Generation Plant 40 30
Others 25 30
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
Intangible Assets
Costs relating to software’s, which are acquired, are capitalised and amortised on straight-line method over
estimated useful life of 5 to 6 years.
(v) Impairment of non-financial Assets
The carrying amounts of assets are reviewed at each reporting 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 asset’s fair value less costs of
disposal 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 which is a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
If impairment loss is provided, depreciation is calculated on the revised carrying amount of the assets over its
remaining useful life.
(vi) 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. Revenue is measured at the fair value of the consideration received or
receivable.
Sale of Goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer. Amounts disclosed as revenue are inclusive of excise duty and net of returns, quality claims, volume
discounts, trade allowances, rebates, taxes collected on behalf of the government and amounts collected on
behalf of third parties.
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 income
Interest income for debt instruments is recognised using the effective interest rate method. The effective interest
rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset
to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company
estimates the expected cash flows by considering contractual terms of the financial instrument but does not
consider the expected credit losses.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 133 133

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Dividends
Dividends are recognised in profit or loss only when the right to receive payment is established.
Rental income
Rental income arising from operating leases on investment properties is accounted for on a straight-line basis
over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.
(vii) Taxes on Income
Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected
to be paid on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in
accordance with the Income Tax Act, 1961. Current income tax and deferred tax relating to items recognised
outside profit or loss is recognised either in other comprehensive income or in equity.
Deferred 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, using the balance sheet approach, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. 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 are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
The deferred tax assets are reviewed at each Balance Sheet date. It recognises, unrecognised deferred tax
assets to the extent that it is probable that taxable profit will be available against which such deferred tax assets
can be realised. The Company writes down the carrying amount of a deferred tax asset to the extent that it is
no longer reasonably certain, as the case may be, that sufficient future taxable income will be available against
which deferred tax assets can be realised.
Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax
liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
(viii) 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. Cost of inventories also include all other costs incurred in bringing the
inventories to their present location and condition Costs of purchased inventory are determined after deducting
rebates and discounts. 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.
(ix) Financial Assets
Classification
The company classifies its financial assets in the following measurement categories:
(a) those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and
(b) those measured at amortised cost.

134 134 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses are recorded in profit or loss or other comprehensive
income. For investments in debt instruments, it depends on the business model in which the investment
is held. The company reclassifies debt investments only when its business model for managing those
assets changes.
Measurement
At initial recognition, the company measures a financial asset at its fair value. In case of a financial asset not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial
asset are added to the cost of acquisition to arrive at fair value. Transaction costs of financial assets carried at
fair value through profit or loss are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the company’s business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which the
company classifies its debt instruments:
(a) Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in Other Income using the effective interest rate method.
(b) Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets’ cash flows represent
solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition
of impairment gains or losses, interest revenue and foreign exchange gains and losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these
financial assets is included in other income using the effective interest rate method.
(c) Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is
included in other income.
Equity instruments
The company subsequently measures all equity investments at fair value. Where the company’s management
has elected to present fair value gains and losses on equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such
investments are recognised in profit or loss as Other Income when the company’s right to receive payments is
established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in Statement of
Profit and Loss. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether
there has been a significant increase in credit risk. For recognition of impairment loss on other financial assets
and risk exposure, the company determines that whether there has been a significant increase in the credit risk
since initial recognition. Expected credit losses (ECL) are provided for based on the changes in credit risk of
the counterparty.
ECL is the difference between all contractual cash flows that are due to the company in accordance with the
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original Effective Interest Rates (EIR).
Derecognition of financial assets
A financial asset is derecognised only when:
(a) The company has transferred the rights to receive cash flows from the financial asset or
(b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 135 135

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Where the entity has transferred an asset, the company evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where
the entity has not transferred substantial risks and rewards of ownership of the financial asset, the financial
asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognised if the company has not retained control of
the financial asset.
On derecognition of the asset, cumulative gain or loss previously recognised in other comprehensive income
(OCI) is reclassified from the equity to profit and loss (P&L).
Reclassification of financial assets
The company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments measured at fair value
through other comprehensive income and financial liabilities. For financial assets which are debt instruments,
a reclassification is made only if there is a change in the business model for managing those assets. Changes
to the business model are expected to be infrequent. The company determines change in the business model
as a result of external or internal changes which are significant to the company’s operations.
(x) Financial Liabilities
Initial recognition
All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables,
net of directly attributable transaction costs.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit and loss.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. This category includes
derivative financial instruments entered into by the company that are not designated as hedging instruments in
hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the profit and loss.
(xi) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The
dividends on these preference shares are recognised in profit or loss as finance costs.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged
or cancelled. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss as other gains/(losses).
(xii) Financial guarantee contracts
Financial guarantee contracts issued by the company are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the counter party fails to make a payment when due in
accordance with the terms of a debt instrument. The company accounts for financial guarantee contracts as per
the principles of Ind AS 104 as it consider that such contracts are in the nature of insurance contracts. Once the
arrangements are designated as insurance contracts, these are disclosed as contingent liabilities unless the
obligations under guarantee become probable.

136 136 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(xiii) Foreign Currency Transactions
Items included in the financial statements are measured using the currency of the primary economic environment
in which the company operates (‘the functional currency’). The financial statements are presented in Indian
rupee (INR), which is also the company’s functional currency.
Initial Recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the
transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at reporting date exchange
rates are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow
hedges. All foreign exchange gains and losses are presented in the statement of profit and loss.
Measurement of Foreign Currency Monetary Items at Balance Sheet Date
Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates
of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value is determined.
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 which are recognised in the financial statements till
the period ending 31 March 2016 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 (FCMITDA)” in the Financial Statements and are amortised over the balance period of such long-term
asset/liability.
(xiv) 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 is 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.
(xv) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when there is a present legal or constructive 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. Provisions are measured at the present value of
best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The
discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as interest expense.
Contingent liabilities and Contingent assets are not recognised but disclosed in the notes to the Financial
Statements.
(xvi) 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.
(xvii) Derivative Instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 137 137

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged and the type of hedge relationship designated.
The Company had Principal only swap (POS) contracts to hedge risks associated with foreign currency
fluctuations relating to highly probable forecasted transactions. The company documents at the inception of
the hedging transaction the economic relationship between hedging instruments and hedged items including
whether the hedging instrument is expected to offset changes in cash flows of hedged items. The company
documents its risk management objective and strategy for undertaking various hedge transactions at the
inception of each hedge relationship.
The Company had designated certain POS contracts in a cash flow hedging relationship by applying the hedge
accounting principles. 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
in the other comprehensive income in cash flow hedging reserve within equity (net of applicable deferred taxes)
and the ineffective portion is recognised immediately in the 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 equity as Hedging
Reserve 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 Profit and Loss.
Mark to market gains and losses on all other derivative contracts, other than forward contracts which are in the
nature if long term foreign currency monetary items, outstanding at the balance sheet date are recognised in
the profit and loss.
(xviii) Employee Benefits
Short term employee benefits
Liabilities for wages and salaries, including any non-monetary benefits that are expected to be settled within
the next 12 months from the end of the reporting period in which the employees render the related service are
recognised as employees cost up to the end of the reporting period and are measured at the amounts expected
to be paid when the liabilities are settled.
Other long term employee benefits –
Compensated Absences
Provision for compensated absences is determined based on actuarial valuation. Therefore it is measured as
the present value of expected future payments to be made in respect of services provided by employees up to
the end of period ending 31st December 2014 using the projected unit credit method. Post this date, there are no
compensated absences provided to the employees and hence not provided for. The obligations are presented
as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for
at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Post-employment Benefits
Provident Fund
Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are
charged to the 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.
Gratuity
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service cost.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included
in retained earnings in the statement of changes in equity and in the balance sheet. Remeasurements are not
reclassified to profit or loss in subsequent periods.

138 138 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(xix) 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.
(xx) 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.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
(xxi) Leases
Where the Company is the Lessee
Finance leases entered, 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 Profit
and Loss on a straight-line basis over the lease term.
Where the Company is the Lessor
Assets subject to operating lease are included in property, plant & equipment. 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.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use
the asset or assets, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to 1 April 2015, the company has determined whether the arrangement
contain lease on the basis of facts and circumstances existing on the date of transition.
(xxii) 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.
(xxiii) Measurement of EBIDTA
The company has elected to present earnings before finance costs, exchange variation and derivative gains
& 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) for the period
and does not include finance costs, exchange variation and derivative losses, depreciation and amortisation
expenses, exceptional items and taxes.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 139 139

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(xxiv) Current versus non-current classification
All the assets and liabilities in the balance sheet are classified as current and non-current based on the below
mentioned factors except deferred tax assets and liabilities which is always classified as non-current. An asset
is classified as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period
All other assets are classified as non-current.
A liability is classified as current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
All other liabilities are classified as non-current.
(xxv) Fair value measurement
The company measures financial instruments, such as, derivatives of equity investments at fair value at each
balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
(xxvi) Treasury shares
Own equity instruments (Treasury Shares) that are reacquired pursuant to scheme of amalgamation of Essar
Steel (Hazira) Limited and Essar Steel Orissa Limited are recognised at cost and deducted from equity. No gain
or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company’s own equity
shares. Any difference between the carrying amount and the consideration, if reissued, is recognised in equity.
5 List of critical estimates and judgments:
The preparation of Financial Statements in conformity with Ind AS which requires management to make estimates,
assumptions and exercise judgment in applying the accounting policies that affect the reported amount of assets,
liabilities and disclosure of contingent liabilities and contingent assets 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.
a) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of
disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for
similar assets or observable market prices less incremental costs for disposing of the asset. The value in use
calculation is based on a DCF model. The cash flows are derived from the budget for the period up to five years.
The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future
cash-inflows and the growth rate used for extrapolation purposes.

140 140 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
b) Control assessments for investment in associates
An entity is said to be an associate of an investor entity when the later has significant influence over the former.
There is a rebuttable presumption that significant influence exist if an investor holds 20% or more voting rights
in the investee entity. However demonstration of significant influence over an entity is a matter of judgment and
is not always evident from the percentage of voting rights.
c) Recognition of deferred tax assets for unused tax losses and unabsorbed depreciation
The Deferred Tax Assets has been recognized to the extent that it is probable that taxable profit will be available
against which the such deferred tax assets can be realized. During the year, the Company has successfully
scaled up its operations with significant improvements in capacity utilization, sales and EBIDTA margins.
In order to address the transient liquidity challenge and further to ensure long term viability, the Company
has been in active discussions with its lenders for implementing a scheme of restructuring as per the RBI
guidelines. Mecon Limited, appointed by the lenders as an independent Techno Economic Viability consultant
for the purposes of restructuring, have submitted a draft report incorporating their assessment of the company’s
profitability in future years based on current performance and future potential. Considering these financial
projections in future years contained in the restructuring plan the management believes that there will be
sufficient future taxable income (post implementation of restructuring scheme) against which deferred tax asset
can be realized.
Meanwhile on 13th June 2017, RBI directed the lenders to refer certain companies including Essar Steel India
Ltd. to National Company Law Tribunal (NCLT) under Insolvency Bankruptcy Code (IBC), 2016. The Company
believes that upon implementation of suitable restructuring/Resolution plan, there would be reasonable
probability of sufficient future taxable income.
d) Defined benefit obligation
The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves
making assumptions about discount rates, expected rate of return on assets, future salary increases and
mortality rates. Due to the long term nature of these plans such estimates are subject to significant uncertainty.
e) Impairment of financial assets
The impairment provisions for financial assets disclosed are based on assumptions about risk of default and
expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to
the impairment calculation, based on the Company’s past history, existing market conditions as well as forward
looking estimates at the end of each reporting period.
f) Determination of functional currency
The Company determines its functional currency as INR since it is the currency that mainly influences the
prices of goods and also the prices are determined basis the economic environment prevalent in India. There
are exports which are denominated in US dollars, however this does not have a significant impact on the
Company. Also, major financing of the company is in INR.
g) Arrangements in the nature of Lease
The company applies Appendix C to Ind AS 17, to contracts entered with some entities to determine whether
the transaction is in the nature of lease or not. The Company has determined, based on an evaluation of the
terms and conditions of the arrangements, that such contracts are in the nature of operating/finance leases.
The assessment is done where the term of the agreement is for the major part of the estimated economic life
of the leased asset and present value of minimum lease payments amounts to at least substantially to all of
the fair value of the leased assets. Therefore, risks and rewards have substantially been not/transferred to the
Company, as a lessee, such arrangements are accounted for as finance lease.
6 Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments)
Rules, 2017, notifying amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”.
These amendments are in accordance with the recent amendments made by International Accounting Standards
Board (IASB) to IAS 7 “Statement of cash flows” and IFRS 2 “‘Share-based payment”, respectively. The amendments
are applicable to the Company from April 1, 2017.
Amendment to Ind AS 7
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and
non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 141 141

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the
requirements of the amendment and its effect on the financial statements.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of
cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-
settled awards. Market-based performance conditions and non-vesting conditions are reflected in the “”fair values””,
but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of
awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based
payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction,
the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award
that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The
cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not apply
to the Company.
7. List of Direct and Indirect Subsidiaries considered for consolidation is as under:

Sr. Name of the Company Country of Proportion of Ownership Interest

No. Incorporation (%)
As at As at
31st March 2017 31st March 2016
A. Direct Subsidiaries
1 Essar Steel Middle East FZE Dubai 100 100
2 Essar Steel Trading FZE Dubai 100 100
3 Essar Steel Offshore Limited Mauritius 100 100
4 Essar Steel Logistics Limited India 100 100
5 Paradeep Steel Company Limited India 100 100
B. Step Down Subsidiaries
6 Essar Minerals Limited Mauritius 100 100
7 Essar Mineral Cooperatief U.A. Netherlands 100 100
8 Essar Minerals Canada Limited Canada 100 100
9 Essar Steel (UAE) Limited UAE 100 -
10 New Trinity Holdings LLC USA 100 100
11 New Trinity Coal Inc. USA 100 100
12 New Resources Inc. USA 100 100
13 Essar Minerals INC USA 100 100
14 Trinity Parent Corporation USA 100 100
15 Trinity Coal Corporation USA 100 100
16 Trinity Coal Partners LLC USA 100 100
17 Bear Fork Resources LLC USA 100 100
18 Deep Water Resources LLC USA 100 100
19 Levisa Fork Resources LLC USA 100 100
20 North Springs Resources LLC USA 100 100
21 Little Elk Mining Company LLC USA 100 100
22 Banner Coal Terminal LLC USA 100 100

142 142 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Sr. Name of the Company Country of Proportion of Ownership Interest
No. Incorporation (%)
As at As at
31st March 2017 31st March 2016
23 Hughes Creek Terminal LLC USA 100 100
24 Trinity Coal Marketing LLC USA 100 100
25 Frasure Creek Mining LLC USA 100 100
26 Falcon Resources LLC USA 100 100
27 Prater Branch Resources LLC USA 100 100
28 Trinity RMG Holdings LLC USA 100 100
29 RMG INC USA 100 100
30 PT Essar Indonesia Indonesia 99.74 -

List of Associates considered for consolidation is as under :

Sr. Name of the Company Proportion of Ownership in Equity

No. Share Capital(%)
As at As at
31st March 2017 31st March 2016
1 Bhander Power Limited 26.00 26.00
2 Essar Bulk Terminal Limited * 26.00 26.00
3 Essar Power Hazira Limited # 26.00 26.00
4 Essar Power Orissa Limited @ 26.00 26.00
5 Essar Steel Chhattisgarh Limited 47.38 47.38
6 Essar Power MP Limited$ 26.00 26.00
7 Essar Steel Processing 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 0.45% 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 0.70% 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 3.10% which is calculated after
considering Cumulative Convertible Participating Preference shares (CCPPS) issued by this entity and held
outside the group.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 143 143

 8(a) Property, Plant and Equipment

144 144
(` in Crore)
Particulars Freehold Leasehold Buildings Leasehold Plant and Leasehold Furniture Minning Office Computers Vehicles Ships and Railway Railway Aircraft Total
Land Land Building Machinery Plant and and Property Equipment Vessels Sidings and Sidings and
Machinery Fixtures Wagons Wagons
under lease
Cost / Deemed Cost
At 1st April 2015 (Note-3) 3,598.17 60.78 4,144.16 2.34 45,998.38 7.92 47.54 2,856.04 31.18 105.98 19.72 16.90 73.17 17.92 9.08 56,989.28
Additions - - 501.06 - 504.81 4,850.00 0.10 - 0.34 1.16 0.20 - - - - 5,857.67
Deletions - - 5.89 - 696.95 4,000.00 0.15 - - 60.53 3.97 0.38 - - - 4,767.87
Effect of foreign currency - - 29.01 - 1,031.29 - 0.03 160.38 - - - - - - - 1,220.71
exchange differences
Borrowing cost - - 340.42 - 333.96 - - - - - - - - - - 674.38
Essar Steel India Limited

capitalised
At 31st March 2016 3,598.17 60.78 5,008.76 2.34 47,171.49 857.92 47.52 3,016.42 31.52 46.61 15.95 16.52 73.17 17.92 9.08 59,974.17
Additions 28.73 0.43 588.46 - 1,695.86 - - - 14.96 0.66 2.16 - - - - 2,331.26
Deletions - - - - - - 7.67 - 8.64 0.01 0.39 - - - - 16.71
Effect of foreign currency - - (0.09) - (166.58) - (0.01) (64.04) - - - - - - - (230.72)
exchange differences
At 31st March 2017 3,626.90 61.21 5,597.13 2.34 48,700.77 857.92 39.84 2,952.38 37.84 47.26 17.72 16.52 73.17 17.92 9.08 62,058.00
Accumulated depreciation
At 1st April 2015 (Note-3) - 3.33 859.64 0.26 10,635.51 2.39 29.12 173.51 20.23 90.34 12.35 2.82 12.22 17.23 4.50 11,863.45
Charge for the year - 0.63 142.68 0.04 1,676.23 214.32 5.15 - 3.57 5.20 1.72 0.57 1.92 - 0.38 2,052.41
Disposals - - 0.71 - 117.43 200.00 0.09 - - 59.89 3.82 0.24 - - - 382.18
At 31st March 2016 - 3.96 1,001.61 0.30 12,194.31 16.71 34.18 173.51 23.80 35.65 10.25 3.15 14.14 17.23 4.88 13,533.68
Charge for the period - 0.63 189.91 0.04 1,793.84 56.88 4.14 - 2.93 3.53 1.76 0.56 1.92 - 0.38 2,056.52
Impairment - - - - - - - 2,334.19 - - - - - - - 2,334.19
Addition due to Acquisition - - 143.66 - 556.51 - - - 14.25 - 1.24 - - - - 715.66
of Subsidiaries
Disposals - - - - - - 6.94 - 8.18 - 0.30 - - - - 15.42
At 31st March 2017 - 4.59 1,191.52 0.34 13,988.15 73.59 31.38 2,507.70 32.80 39.18 12.95 3.71 16.06 17.23 5.26 18,624.63
Net book value
At 31st March 2017 3,626.90 56.62 4,405.61 2.00 34,712.62 784.33 8.46 444.68 5.04 8.08 4.77 12.81 57.11 0.69 3.82 43,433.37
At 31st March 2016 3,598.17 56.82 4,007.15 2.04 34,977.18 841.21 13.34 2,842.91 7.72 10.96 5.70 13.37 59.03 0.69 4.20 46,440.49
At 1st April 2015 (Note-3) 3,598.17 57.45 3,284.52 2.08 35,362.87 5.53 18.42 2,682.53 10.95 15.64 7.37 14.08 60.95 0.69 4.58 45,125.83

Expected Useful Life of NA NA 3-60 18-60 3-42 15-30 10 NA 5 3-6 8-10 28 15-30 15 20
the assets (years)
Method of depreciation NA NA SLM SLM SLM SLM SLM UOP SLM SLM SLM SLM SLM SLM SLM
Notes:
1. Railway Sidings and Wagons under lease are the railway wagons (at Gross value) of ` 0.69 Crore given on operating lease to Railway Authorities under ‘Own your Wagon’
scheme.
2. Plant and machinery under lease includes equipments at Retail outlet of `1.05 Crore (at Gross Value) given on lease , depreciation debited to Statement of Profit and Loss `0.04
crore
3. Net book value at 1 April, 2015 represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have been
disclosed for the purpose of better understanding of the original cost of assets.

41 st A N N U A L R E P ORT 2016-17
Notes to Consolidated Financial Statements for the year ended 31st March, 2017

4. Certain property, plant and equipment are pledged against borrowings. The details relating to the same have been described in Note 66.
 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
8(b) Intangible Assets
 (` in Crore)

Particulars Software
Cost / Deemed Cost
At 1 April 2015* 84.20
Additions 1.77
Deletions 0.58
At 31 March 2016 85.39
Additions 7.77
At 31 March 2017 93.16

Accumulated depreciation
At 1 April 2015* 59.89
Charge for the year 8.58
Disposals 0.56
At 31 March 2016 67.91

Charge for the period 6.91

At 31 March 2017 74.82
Net book value
At 31 March 2017 18.34
At 31 March 2016 17.48
At 1 April 2015* 24.31
Expected Useful Life of the assets (years) 3-6
Method of depreciation SLM

* Net book value represents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation
from the previous GAAP have been disclosed for the purpose of better understanding of the original cost of assets.
Details of Depreciation are as follows: (` in Crore)

Particulars For the Year ended

31st March 2017 31st March 2016
Depreciation for the year as above 2,063.43 2,060.99
Less : Depreciation transferred to Expenditure incurred during the
construction period - 0.17
Depreciation as per Statement of Profit and Loss 2,063.43 2,060.82

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 145 145

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
9 Non-Current Investments in Subsidiaries and Associates
Face As at As at As at
Value 31st March, 2017 31st March, 2016 1st April, 2015
Units ` in Crores Units ` in Crores Units ` in Crores
(A) Investment in Subsidiaries
Unquoted Equity Shares
Odisha Slurry Pipe Line 10 - - - - 25,500,000 25.50
Infrastructure Limited
Essar Steel Logistics Limited 10 - - - - 50,000 0.05
Investment in Subsidiaries - - 25.55

(B) Investment in Associates

Unquoted Equity Shares
Bhander Power Limited 10 96,905,000 104.77 96,905,000 104.77 96,905,000 104.77
Add: Share of Accumulated 373.25 444.25 444.25
Reserves of Associates
Add: Share of Profits/(Loss) from (34.09) (71.00) -
Associates for the current year
443.93 478.02 549.02
Essar Steel Chhattisgarh Limited 10 5,781,944 5.78 5,781,944 5.78 5,781,944 5.78
Add: Share of Accumulated 0.06 0.11 0.11
Reserves of Associates
Add: Share of Profits/(Loss) from - (0.05) -
Associates for the current year
5.84 5.84 5.89
Essar Power MP Limited 10 68,900,000 68.90 68,900,000 68.90 68,900,000 68.90
Add: Share of Accumulated 1.60 3.39 3.39
Reserves of Associates
Add: Share of Profits/(Loss) from (2.58) (1.79) -
Associates for the current year
67.92 70.50 72.29
Essar Steel Processing FZCO AED 2 0.25 2 0.25 2 0.25
Dubai 0.1 Mn
Add: Share of Accumulated (0.25) (0.25) (0.25)
Reserves of Associates
- - -
Essar Bulk Terminal Limited 10 1,300,000 1.30 1,300,000 1.30 1,300,000 1.30
Add: Share of Accumulated 5.97 5.22 5.22
Reserves of Associates
Add: Share of Profits/(Loss) from 0.76 0.75 -
Associates for the current year
8.03 7.27 6.52
Essar Power Hazira Limited 10 2,600,000 2.60 2,600,000 2.60 2,600,000 2.60
Add: Share of Accumulated (0.02) (0.02) (0.02)
Reserves of Associates
Add: Share of Profits/(Loss) from 0.01 - -
Associates for the current year
2.59 2.58 2.58
Essar Power Orissa Limited 10 2,600,000 2.60 2,600,000 2.60 2,600,000 2.60
Add: Share of Accumulated (0.07) (0.07) (0.07)
Reserves of Associates
Add: Share of Profits/(Loss) from 0.03 - -
Associates for the current year
2.56 2.53 2.53
Investment in Associates 530.87 566.74 638.83
Non-Current Investments in 530.87 566.74 664.38
Subsidiaries and Associates

146 146 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
10 Other Investments
Face As at As at As at
Value 31st March, 2017 31st March, 2016 1st April, 2015
Units ` in Crores Units ` in Crores Units ` in Crores
Equity Instrument-Unquoted
Equity Shares
Essar Bulk Terminal Paradip 10 2000 *** 2000 *** 2000 ***
Limited (*** ` 20,000)

Essar Commvision Limited 10 20 # 20 # 20 #

(# ` 200 )
Essar Steel Jharkhand Limited 10 - - 95,000 0.10 95,000 0.10

Frontline Roll Forms Private 10 250,000 0.25 250,000 0.25 250,000 0.25
Limited
Odisha Slurry Pipe Line 10 25,500,000 25.50 - - - -
Infrastructure Limited
Provision for Impairment - (25.50) - - - -
Equity Instrument- Quoted
Equity Shares
Essar Ports Limited 10 - - - - 2,547,223 31.32
Essar Shipping Limited 10 1,273,611 3.56 1,273,611 3.19 1,273,611 2.79
Debentures (Unquoted)
Essar Oil Limited (12.5% 105 - - 1,226,300 10.17 1,226,300 12.10
Secured Redeemable and
Non Convertible)
AMW Auto Component Limited 1000 1,065,585 106.56 1,065,585 106.56 1,065,585 141.19
(Compulsory Convertible and
Cumulative)
Odisha Slurry Pipe Line 100 50,100,810 501.01 - - - -
Infrastructure Limited (Comp.
Conv. Debenture)
Provision for Impairment - (607.57) - (106.56) - -
Investments in Unit Linked
Insurance Policy
ULIP Scheme of Canara HSBC 190,931 0.28 190,931 0.30 190,931 0.30
Oriental Bank of Commerce
Life Insurance Company
Limited
4.09 14.01 188.05

Aggregate amount of Quoted

Investments 3.84 3.49 34.41
Aggregate amount of Unquoted
Investments 531.12 577.26 818.02
534.96 580.75 852.43

9,69,05,000 shares of Bhander Power Limited and 12,73,611 shares of Essar Shipping Limited have been pledged
with Banks as security for the borrowings.
Odisha Slurry Pipeline Infrastructure Limited ceased to be subsidiary w.e.f 11th September, 2015.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 147 147

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
11 Other Non Current Financial Assets
(Unsecured unless otherwise stated)
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Security Deposit 151.82 138.99 132.65
Deposits with Banks with Maturity Period more than12 months 18.35 40.57 4.92
(Refer note 17)
Inter Corporate Deposits (ICD) 50.86 - 111.11
Other Receivables 2.06 - -
223.09 179.56 248.68

12 Other Non-Current Assets

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Capital Advances 476.18 458.37 461.96
Prepaid Expenses 67.61 78.56 82.44
543.79 536.93 544.40
13 Deferred Tax Assets (net)
Deferred Tax Asset/(Liability) Movement for FY 2015-16 (` in Crore)
Particulars As at Recognised/ Recognised in/ Recognised As at
1st April reversed reclassified in/reclassified 31st
2015 through profit from other from Equity/ March
and loss comprehensive Addition on 2016
income Acquisition
of Subsidiary
Property, plant and equipment (7,187.59) (327.24) - - (7,514.83)
Carried forward business loss/ 8,162.04 1,990.42 - - 10,152.46
unabsorbed depreciation
Finance lease obligation - 293.12 - - 293.12
Deferred Gain on Finance Lease - 90.33 - - 90.33
Provision for doubtful Debts 2.48 113.42 - - 115.90
Cash Flow Hedge Reserve and 169.43 17.79 27.45 (163.30) 51.37
FCMITDA
Others 50.11 (10.25) 0.19 - 40.05
Net Deferred Tax 1,196.47 2,167.59 27.64 (163.30) 3,228.40

Deferred Tax Asset/(Liability) Movement for FY 2016-17 (` in Crore)

Particulars As at Recognised/ Recognised in/ Recognised As at
1st April reversed reclassified in/reclassified 31st
2016 through profit from other from Equity/ March
and loss comprehensive Addition on 2017
income Acquisition
of Subsidiary
Property, plant and equipment (7,514.83) (378.21) - (66.94) (7,959.98)
Carried forward business loss/ 10,152.46 1,702.33 - - 11,854.79
unabsorbed depreciation
Finance lease obligation 293.12 9.66 - - 302.78
Deferred Gain on Finance Lease 90.33 (6.12) - - 84.21
Provision for doubtful Debts 115.90 (1.42) - - 114.48
Cash Flow Hedge Reserve and 51.37 1.65 3.46 (58.67) (2.19)
FCMITDA
Others 40.05 247.99 8.98 3.33 300.35
Net Deferred Tax 3,228.40 1,575.88 12.44 (122.28) 4,694.44

148 148 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
14 Inventories1

(Valued at lower of cost and net realizable value)
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Raw Materials and components 210.94 249.99 225.55
Goods-in transit 91.09 197.73 350.70
Stock-in-trade 3.95 4.11 -
Stores and spares 328.87 348.81 391.06
Goods-in transit 19.55 7.50 8.74
Production Consumable 89.04 68.33 129.81
Goods-in transit 88.36 29.89 34.79
Fuel 22.20 13.49 8.31
Work-in-progress* 1,261.35 967.42 1,275.55
Finished goods 638.83 444.94 285.05
2,754.18 2,332.21 2,709.56

* Work-in-progress includes trial run Inventory of Nil. (Previous Year - ` 3.13 Crores)
15 Trade Receivables1
(Unsecured unless otherwise stated)
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Debts outstanding for a period exceeding six months from the
date they are due for payment
Considered Good 134.88 252.47 279.70
Considered Doubtful 224.31 192.56 7.15
359.19 445.03 286.85
Less : Provision for Expected Credit Losses 224.31 192.56 7.15
134.88 252.47 279.70
Debts outstanding for a period less than six months from the
date they are due for payment 1,095.81 731.80 1,211.50
1,230.69 984.27 1,491.20
16 Cash and Cash Equivalents1
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Cash on hand 0.02 0.10 0.10
Balances with banks in Current Accounts 383.64 108.32 281.89
383.66 108.42 281.99
1
Current Assets are pledged against borrowings, the details relating to which have been described in Note 66 pertaining to
borrowings.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 149 149

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
17 Other Bank Balances1

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Deposits with original maturity of less than three months 14.84 10.35 11.89
Deposits with original maturity for more than 3 months but less 151.10 53.13 129.79
than 12 months
Deposits with original maturity for more than 12 months 218.73 374.42 413.71
384.67 437.90 555.39

Deposits (including long term deposits in Other Non Current Assets with balance maturity period of more than 12
months) of ` 401.41 Crore (Previous Year ` 454.74 Crore), have been pledged with banks as a security for opening
Letters of Credit, Buyer’s Credit, Short Term Loans and against Bank Guarantee.
Details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th
December, 2016:
Amount in Rupees

Particulars SBN Other Denomination Notes Total

Closing Cash in Hand as on 08.11.2016 786,500 45,351 831,851
(-) Amount deposited in Banks (786,500) (149) (786,649)
Closing Cash in Hand as on 30.12.2016 - 45,202 45,202
Explanation: For the purposes of this clause, the term ‘Specified Bank Notes’(SBN) shall have the same meaning
provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs
number S.O. 3407(E), dated the 8th November, 2016.
18 Current Loans and Advances
(Unsecured and Considered good unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Inter Corporate Deposits (ICD) - Related Parties 29.35 127.88 183.24
Security Deposits 353.18 350.50 354.45
Loans and Advances to Staff 1.79 1.56 2.48
384.32 479.94 540.17
19 Derivative Financial Assets

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Derivative Financial Assets - Forward Contracts - 0.11 8.04
- 0.11 8.04
1
Current Assets are pledged against borrowings, the details relating to which have been described in Note 66 pertaining to
borrowings.

150 150 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
20 Other Current financial Assets
(Unsecured and Considered good unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Interest Accrued on ICDs, Loans & Deposits 10.63 9.43 -
Other Receivables 9.87 1,422.99 3,917.04
20.50 1,432.42 3,917.04

21 Other Current Assets

(Unsecured and Considered good unless otherwise stated)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Deposits with Govt & Semi Govt 392.35 351.78 357.64
Loans and Advances to Suppliers 877.73 1,081.34 2,683.63
Claims Receivables 1,655.44 1,349.19 1,067.40
Export Benefit 121.30 98.48 98.38
Prepaid Expenses 60.04 53.22 80.53
3,106.86 2,934.01 4,287.58

22 Current Tax Assets (Net)

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Advance Income Tax 44.35 8.46 -
44.35 8.46 -
23 Equity Share Capital

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Authorised
717,50,00,000 (Previous Year - 717,50,00,000) Equity Shares 7,175.00 7,175.00 7,175.00
of ` 10 each
10,00,00,000 (Previous Year - 10,00,00,000) 10% Cumulative 100.00 100.00 100.00
Redeemable Preference Shares of ` 10 each
7,275.00 7,275.00 7,275.00

Issued, Subscribed and Paid-up

3,10,89,57,660 (Previous Year 3,10,89,57,660) Equity Shares 3,108.96 3,108.96 3,108.96
of ` 10 each
Add: 45,20,703 (Previous Year 45,20,703) shares Forfeited 0.67 0.67 0.67
3,109.63 3,109.63 3,109.63

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 151 151

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
a Reconciliation of number of shares and amount outstanding at the beginning and at the end of the
reporting period:

Equity Shares 31st March, 2017 31st March, 2016 1st April, 2015
Number ` in Number ` in Number ` in
Crores Crores Crores
At the beginning of 3,108,957,660 3,108.96 3,108,957,660 3,108.96 3,108,957,660 3,108.96
the year
Issued during the - - - - - -
year
Outstanding at the 3,108,957,660 3,108.96 3,108,957,660 3,108.96 3,108,957,660 3,108.96
end of the year

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.
c Shares held by Holding Company
Out of above equity shares, 2,240,939,040 equity shares (Previous year 2,155,213,248) are held by Essar
Steel Asia Holdings Limited, Mauritius, the holding Company.
d Details of shareholders holding more than 5% shares in the Company

31st March, 2017 31st March, 2016 1st April, 2015

Number % of Number % of Number % of
Holding Holding Holding
Equity Shares
Essar Steel Asia Holdings 2,240,939,040 72.08 2,155,213,248 69.32 2,153,587,448 69.27
Limited1
Essar Steel Jharkhand 490,000,000 15.76 - - - -
Limited3
Shares under Trust 191,517,500 6.16 191,517,500 6.16 191,517,500 6.16
Imperial Consultants & 2,775,483 0.09 672,232,720 21.62 - -
Securities
Imperial Consultants & - - - - 629,656,758 20.25
Securities Pvt. Limited2
2,925,232,023 94.09 3,018,963,468 97.10 2,974,761,706 95.68
1. Number of shares includes 49,24,85,501 shares acquired from Essar Steel Limited, Mauritius and
8,57,25,792 shares acquired from Imperial Consultants & Securities, 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 89 of Companies Act, 2013 regarding beneficial ownership
of such shares.
2. 27,75,483 shares acquired from Imperial Consultants & Securities Pvt. Limited , for which transfer of
shares in demat account is pending and in respect of such shares Imperial Consultants & Securities has
made necessary declaration under Section 89 of Companies Act, 2013 regarding beneficial ownership
of such shares.
3. Number of shares includes 49,00,00,000 shares acquired from Imperial Consultants & Securities,
for which transfer of shares in demat account is pending and in respect of such shares Essar Steel
Jharkhand Limited has made necessary declaration under Section 89 of Companies Act, 2013 regarding
beneficial ownership of such shares.

152 152 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
24 Other Equity

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Capital Reserves 12.73 12.73 12.73
Capital Redemption Reserve 202.92 202.92 202.92
Securities Premium Account 7,814.61 7,814.61 7,814.61
Treasury Shares (766.07) (766.07) (766.07)
Revaluation Reserve 4,322.25 4,455.39 4,565.13
Foreign Currency Translation Reserve (816.42) (910.84) (713.05)
Consolidation Reserve (329.16) - -
Share in Reserve of Associates 1.10 1.10 1.10
Hedging Reserve (Net of deferred tax) - (104.31) (361.01)
General Reserve 77.51 77.51 77.51
Foreign Currency Monetary Item Translation Difference (6.32) (11.08) (62.49)
Account
Retained Earnings (17,582.91) (12,095.68) (7,802.04)
Other Comprehensive Income (13.48) 2.91 -
(7,083.24) (1,320.81) 2,969.34
Treasury Shares
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.
Hedging Reserve
The Company designates certain Principal Only Swaps (POS) contracts in a cash flow hedging relationship by applying
the hedge accounting principles. 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 in
the other comprehensive income in cash flow hedging reserve within equity (net of applicable deferred taxes) and the
ineffective portion is recognised immediately in the profit and loss.
25 Non Current Borrowings

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Secured (Refer Note 66 )
Non Convertible 131.09 259.67 321.61
Debentures of ` 10,00,000
each
Term Loans
From Banks 14,577.19 18,351.76 22,006.88
From Others 2,757.99 1,398.42 1,468.41
17,335.18 19,750.18 23,475.29
Buyers Credit Capex - - 51.12

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 153 153

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Unsecured
Dollar / Rupee Notes
From Banks - 213.26 208.65
From Others - 0.44 1.28
Redeemable Preference 21.62 61.14 55.35
Shares
Sales Tax Deferral Loan 31.74 33.32 33.32
Finance lease obligation 823.72 837.89 2.84
Inter corporate Deposit
Received
Related Parties 912.51 876.66 2,448.33
Others - 14.05 310.00
19,255.86 22,046.61 26,907.79

26 Other Non Current Financial Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Advance from Customer against Export Performance Bank
Guarantee - - 6,985.98
- - 6,985.98
27 Non Current Derivative Financial Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Cross Currency Interest Rate Swap 21.74 30.49 28.54
Principal Only Swap - 30.17 191.32
21.74 60.66 219.86
28 Other Non Current Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Deferred gain 225.62 243.32 2,653.38
Advance against Sale of Property, Plant & Equipment - - 750.00
225.62 243.32 3,403.38

154 154 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
29
Non Current Provisions

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Provision for employee benefits
Gratuity 39.72 24.11 24.40
Leave Encashment 13.84 13.04 20.65
Assets Retirement Obligation 327.02 334.56 315.68
380.58 371.71 360.73
30 Current Borrowings

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Secured (Refer Note 66 )
Loans From Banks 198.80 101.28 100.00
Loans From Others 5.81 5.00 100.00
Working Capital Loans - From Banks 8,764.82 5,597.29 2,026.02
Buyers' credit for Operational use - 516.31 1,085.27
Acceptance for Capital Expenditures 7.14 14.07 36.14
Acceptance for Goods and Expenses 828.12 2,084.35 3,175.67
Liability for Bills Discounting - - 430.94
Unsecured
Inter corporate Deposit
Related Parties 3,639.65 4,347.72 1,885.97
Others 145.38 35.93 97.76
13,589.72 12,701.95 8,937.77
31 Trade Payables

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Trade Payables for Goods and Expenses 3,899.95 3,305.93 2,436.52
Accrued Liabilities and Provisions 1,152.91 1,098.38 1,262.79
5,052.86 4,404.31 3,699.31
32 Current Derivative Financial Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Forward Contracts 3.13 33.30 6.90
Principal Only Swap - 127.05 354.98
Cross Currency Interest Rate Swap 3.11 2.47 -
Rupee Indexed Interest Rate Swaps - - 0.77
6.24 162.82 362.65

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 155 155

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
33
Other Current Financial Liabilities

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Current maturities of long-term debt (Refer Note 66) 11,479.94 7,428.07 4,245.65
Current maturities of finance lease obligations 71.22 33.56 1.91
Creditors for Capital Expenditures 696.11 251.24 263.24
Advance against Export Performance Bank Guarantee - 911.51 967.85 283.24
Current (Refer Note 66)
Security Deposits Received 5.53 5.57 5.42
Invoked Advance against Export Performance Bank 7,056.88 6,970.05 -
Guarantee (Refer Note 66)
Invoked Standby Letter of Credit (Refer Note 66) 459.66 - -
Other Liabilities 5,071.50 270.00 192.37
25,752.35 15,926.34 4,991.83
34 Other Current Liability

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Advances from Customers 1,131.26 3,753.06 4,037.32
Deferred gain 17.70 17.70 139.65
Statutory Liabilities 286.87 286.93 157.80
1,435.83 4,057.69 4,334.77
35 Current Provisions

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Provision for employee benefits
Leave Encashment 3.04 3.54 5.28
Indirect Taxes (Refer Note 64) 19.73 19.73 19.73
Provision against losses on unwinding of sale of Business - 1,249.76 -
undertaking
Provision for Assets Retirement Obligation 59.47 60.84 57.41
82.24 1,333.87 82.42
36 Revenue from Operations

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Sale of products (Inclusive of Excise Duty) 22,987.45 15,536.19
Sale of services 61.75 26.76
Other operating revenues 98.99 86.74
23,148.19 15,649.69

156 156 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
37 Other Income

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Interest Income on Financial Instrument measured at Amortised Cost
Inter Corporate Deposits 38.87 111.00
Bank Deposits 30.76 46.21
Others 31.45 54.51
Rent 22.58 21.88
Profit on sale of Investments 25.03 -
Interest on Swaps 15.80 31.71
Gain Due to change in classification of lease - 254.83
Amortisation of Deferred Gain 17.70 4.42
Profit on sale of Property, Plant & Equipment - 0.08
Miscellaneous Income 1.92 3.55
184.11 528.19
38 Cost of Materials Consumed

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Raw Materials Consumed 11,343.14 8,198.85
Production Consumables 1,685.49 1,349.26
Excise Duty* 35.47 65.56
13,064.10 9,613.67
* Represents differential excise duty in respect of closing stock and opening stock, etc.

39 Energy Cost

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Petroleum Products - Fuel 735.81 436.80
Power and Water Charges 2,339.85 1,456.80
3,075.66 1,893.60

40 (Increase)/Decrease in Inventories of Finished Goods, Work in Progress and Stock in Trade

Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crores ` in Crores
Opening Stock
Finished Goods 444.94 285.05
Work-in-Progress 967.42 1,275.55
Traded Goods 4.11 1,416.47 - 1,560.60
Closing Stock
Finished Goods 638.83 444.94
Work-in-Progress 1,261.35 964.30
Traded Goods 3.95 1,904.13 4.11 1,413.35
(487.66) 147.25

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 157 157

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
41 Employee Benefits Expense

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Salaries 354.24 367.32
Contribution to Provident and Other Funds 25.53 28.41
Staff Welfare Expenses 63.09 70.79
442.86 466.52

42 Manufacturing & Asset Maintenance

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Repairs, Maintenance and Equipment Hire Charges 540.90 446.98
Stores and Spares 512.62 291.05
Labour and Sub Contracting Charges 249.00 211.84
Plant Insurance 20.23 19.92
1,322.75 969.79

43 Administrative Expenses

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Traveling, Conveyance and Vehicle Hire & Maintenance Charges 30.50 44.64
Printing, Stationery, Postage and Telephone 12.00 12.63
Professional Fees 78.25 146.14
Operating Lease Rent 52.33 46.55
Repairs, Maintenance - Other than Plant 16.81 12.39
Insurance - Other than Plant 3.90 5.19
Rates and Taxes 15.78 22.67
Auditor's Remuneration* 2.16 2.07
Loss on sale/disposal/write off of Property Plant & Equipment 1.30 0.84
Allowance for Doubtful Debt 8.20 221.18
Miscellaneous Expenses 89.98 52.42
Provision for Impairment in Investment - 106.56
311.21 673.28
Auditor's Remuneration
Audit Fees 2.00 2.00
Other Services 0.16 0.07
2.16 2.07

44 Selling & Distribution Expenses

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Sales Commission 100.28 68.08
Freight Outward (net), Intercarting and Packing Charges 481.18 358.56
Other Selling Expenses 23.50 51.92
604.96 478.56

158 158 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
45 Finance Costs

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Guarantee and Other Bank Charges 228.46 564.82
Interest
on Term Loans 3,606.36 2,465.41
on Debentures 38.82 19.68
on Export Performance Bank Guarantees 23.11 125.51
on Finance Lease Obligations 143.95 159.61
on Inter Corporate Deposits 321.64 507.12
to Banks and Others 1,570.72 1,049.48
5,704.60 4,326.81
Dividend on Preference Shares 6.40 5.80
Exchange Variation on Borrowings 18.14 236.87
5,957.60 5,134.30

46 Exchange Variation & Derivative Losses(net)

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Exchange Variation (net) 49.00 (21.38)
Loss/(Gain) on cancellation of Derivative and Forward Exchange Contracts 176.75 433.06
Mark to Market on derivative contract (40.36) 31.69
185.39 443.37

47 Exceptional items

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Impairment in Subsidiaries (Refer Note 65) (2,334.19) -
Others 412.91 633.82
(1,921.28) 633.82

48 Income Tax Expense

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Current Tax
Current Tax Expenses 26.20 -
Excess Provision of Earlier Years (Net) (2.38) 23.82 0.13 0.13
Deferred Tax
Effect of Tax of Earlier Years (13.84) 68.64
Deferred Tax Charge / (Credit) (1,562.04) (1,575.88) (2,236.23) (2,167.59)
(1,552.06) (2,167.46)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 159 159

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Reconciliation of tax expense and the accounting profit multiplied by tax rate

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crore ` in Crore
Loss before Tax as per Books (7,136.40) (6,498.75)
Tax expenses on above PBT (@ tax rate applicable for each subsidiary) (2,315.50) (2,249.09)
Deferred Tax Assets not recognised 752.65 -
Effect of Tax of earlier years (16.22) 68.77
Tax Effect of amount which are not deductible (taxable) in calculating taxable 25.42 17.84
Income
Others 1.59 (4.98)
Income Tax Expenses - Charge / (Credit) (1,552.06) (2,167.46)

49 Other Comprehensive Income

Year Ended Year Ended

31st March, 2017 31st March, 2016
` in Crores ` in Crores
A (i) Items that will not be reclassified to profit or loss
Gain on sale of Investments - 2.56
Fair Value Changes on Financial Assets (25.14) 0.40
Actuarial (Loss) / Gain on DBO (0.23) (0.23)
(25.37) 2.73
(ii) Income tax relating to items that will not be reclassified to profit
or loss
Gain on sale of Investments - (0.01)
Fair Value Changes on Financial Assets 8.90 0.12
Actuarial (Loss) / Gain on DBO 0.08 0.08
8.98 0.19
B (i) Items that will be reclassified to profit or loss
Cash flow hedges - Effective portion of changes in fair value - (14.26)
Cash flow hedges - Transfer to Profit & Loss (9.99) (65.08)
(9.99) (79.34)
(ii) Income tax relating to items that will be reclassified to profit or loss
Cash flow hedges - Effective portion of changes in fair value - 4.93
Cash flow hedges - Transfer to Profit & Loss 3.46 22.52
3.46 27.45

160 160 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
50 Financial Instruments and Risk Management
A Financial Instruments - Categories
(` in Crore)

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
FVOCI FVTPL Amortised FVOCI FVTPL Amortised FVOCI FVTPL Amortised
Cost Cost Cost
Financial Assets:
Investment in Equity Shares 3.56 0.53 530.87 3.19 0.65 566.74 34.11 0.65 664.38
and ULIP
Investment in Debentures - - - - - 10.17 - - 153.29
Trade Receivable - - 1,230.69 - - 984.27 - - 1,491.20
Cash and Bank balances - - 768.33 - - 546.32 - - 837.38
Other Financial Assets - - 627.91 - - 2,091.92 - - 4,705.89
Derivative Financial Assets - - - - 0.11 - - 8.04 -
Total Financial Assets 3.56 0.53 3,157.80 3.19 0.76 4,199.42 34.11 8.69 7,852.14
Financial Liabilities:
Borrowings incl. current - - 43,501.80 - - 41,338.74 - - 40,088.38
maturities
Finance lease obligation - - 894.94 - - 871.45 - - 4.75
Trade and Other Payables - - 5,748.97 - - 4,655.55 - - 3,962.55
Other Financial Liabilities - - 13,505.08 - - 8,213.47 - - 7,467.00
Derivative Financial Liability - 27.98 - 157.22 66.26 - 546.30 36.21 -
Total Financial Liabilities - 27.98 63,650.79 157.22 66.26 55,079.21 546.30 36.21 51,522.68

B Fair Value Hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For the company, the fair
valuations in this level of hierarchy include listed equity instruments. The fair value of all equity instruments which are
traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example derivatives) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible
on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2. The fair valuations in this level of hierarchy for the company mainly include derivatives.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. The Company does not have any financial assets and liabilities under this category.
Fair Value Hierarchy for Financial Assets & Liabilities measured at Fair Value -
(` in Crore)

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial Assets
Investment in Equity Shares 3.56 0.28 0.25 3.19 0.30 0.35 34.11 0.30 0.35
and ULIP
Derivative Financial Assets - - - - 0.11 - - 8.04 -
3.56 0.28 0.25 3.19 0.41 0.35 34.11 8.34 0.35
Financial Liabilities
Derivative Financial Liability - 27.98 - - 223.48 - - 582.51 -

- 27.98 - - 223.48 - - 582.51 -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 161 161

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Fair Value of Financial Assets and Liabilities measured at Amortised Cost for which Fair Values are disclosed-
(` in Crore)

Particulars As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
Fair Value Carrying Fair Value Carrying Fair Value Carrying
Value Value Value
Financial Assets
Other Non Current
Financial Assets 168.80 170.16 180.92 179.56 137.24 137.57
168.80 170.16 180.92 179.56 137.24 137.57
Financial Liabilities
Borrowings 43,495.68 43,501.80 41,350.66 41,338.75 40,085.38 40,088.37
Finance lease obligation 1,140.25 894.94 1,084.62 871.46 4.75 4.75
44,635.93 44,396.75 42,435.28 42,210.20 40,090.13 40,093.12
The carrying amounts of all other financial assets and liabilities are considered to be the approximately equal to their
fair values.
The fair values as disclosed above are calculated based on discounted cash flows using a rate that reflects market
risk.
The fair values of borrowings are based on discounted cash flows using a current borrowing rate.
C Financial Risk Management
The company is exposed to various risks in relation to financial instruments. The main types of risks are credit risk,
liquidity risk and market risk. In order to minimise any adverse effects on the financial performance of the company
due to market risks, the company enters into various derivative contracts. Derivatives are taken only to mitigate the
risk and not for speculative purposes.
The company’s risk management is carried out by the Risk Department under policies approved by the board of
directors. The board provides written principles for overall risk management, as well as policies covering specific
areas.
- Credit risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The
company is exposed to credit risk from investments measured at amortised cost, deposits with banks and other
parties, trade receivables, inter-corporate deposits, loans and advances to staff and derivative contracts.
The Company periodically assesses the financial reliability of the counter party, taking into account the financial
condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual
limits are set accordingly. Investments at Amortised Cost are strategic investments in associated lines of business
activity, the company closely monitors the performance of these Companies. Bank deposits are placed as collateral
/ margin money etc to avail much larger fund & non-fund based facilities from Banks / Financial Institutions. Hence,
there is no significant credit risk on such fixed deposits.
Trade Receivable: The Company trades with recognized and creditworthy third parties. It is the Company’s policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.
Also the company does not enter in to sales transaction with customers having credit loss history. There are no
significant credit risks with related parties of the Company.
The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with
respect to trade receivables is mitigated by the Company’s large customer base. Credit risk in majority of cases are
mitigated by letter of credit/ Advances from the customer.
- Liquidity risk
Liquidity risk is that the company might be unable to meet its obligations. Liquidity risk arises from mismatch in maturity
profile of receipts and payments, funds locked in excess inventories and where no additional funds are obtained.

162 162 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
The liquidity risks are dynamically managed through efficient scheduling of receipts and payments. Banks are
monitoring all the cash flows through Trust & Retention Account (TRA) mechanism and payment are pre-vetted by TRA
Auditors appointed by the Lenders. Liquidity risks arising from excess inventory are managed through a mix of efficient
supply chain management and just-in-time production schedules. Please refer note 63 for proposed restructuring of
borrowing and other financial liabilities.
The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual
maturities for:
(` in Crore)
Particulars As at
31st March, 2017
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 26,047.24 1,978.54 7,336.19 8,287.66 43,649.62
Trade and Other Payables 5,748.96 - - - 5,748.96
Finance lease obligation 214.24 157.06 470.13 1,395.33 2,236.76
Other Financial Liabilities 13,512.56 - - - 13,512.56
Derivative Financial Liability 6.24 3.11 14.91 3.73 27.98
Total 45,529.24 2,138.71 7,821.23 9,686.71 65,175.89

Particulars As at
31st March, 2016
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 20,208.95 4,063.42 6,639.98 10,619.38 41,531.72
Trade and Other Payables 4,655.56 - - - 4,655.56
Finance lease obligation 178.01 157.06 470.13 1,552.04 2,357.24
Other Financial Liabilities 8,222.38 - - - 8,222.38
Derivative Financial Liability 162.83 31.82 17.31 11.54 223.49
Total 33,427.72 4,252.30 7,127.42 12,182.96 56,990.40

Particulars As at
1st April, 2015
< 1 year 1-2 years 2-5 years > 5 years Total
Borrowings 17,759.82 4,579.10 8,105.94 9,885.42 40,330.28
Trade and Other Payables 3,962.55 - - - 3,962.55
Finance lease obligation 1.92 0.70 1.05 27.88 31.56
Other Financial Liabilities 480.45 279.05 1,503.66 5,281.79 7,544.95
Derivative Financial Liability 362.65 97.10 96.36 26.40 582.51
Total 22,567.39 4,955.95 9,707.03 15,221.49 52,451.85
- Market risk
The Company is exposed to substantial Financial Market Risks in its operations on account of:
• Foreign currency exchange risk
• Interest rate risk
• Commodity price risk
The Board has put in place detailed Market Risk Management Policy (RMP) documents and the market risks are
managed by various functionaries in terms of these Policy documents.
- Foreign Currency risk
The company is exposed to foreign exchange risk arising from export sales, operating and capital expenditure in
foreign currency, foreign currency loans and economic exposure on account of mismatch between foreign currency
and INR assets and liabilities. The risk is measured through a forecast of highly probable foreign currency cash flows.
The company enters into hedging transactions mainly to hedge the significant foreign exchange risks from concluded
and committed export sales, operating and capital expenditures and the foreign currency borrowings.
The company is mainly exposed to exchange risk from foreign currencies - USD, EUR and AED.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 163 163

 (a) The company’s exposure to foreign currency risk at the reporting date (expressed in ` Crores) is as follows:

164 164
(` In Crore)
st st st
Particulars As at 31 March, 2017 As at 31 March, 2016 As at 1 April, 2015
USD EUR AED Others Total USD EUR AED Others Total USD EUR AED Others Total
Trade Receivables 451.08 30.94 - - 482.02 27.94 27.96 3.54 - 59.44 77.61 6.23 1.08 - 84.92
Cash and Bank 77.61 - - - 77.61 14.20 - - - 14.20 51.02 - - - 51.02
balances
Other Financial Assets 293.76 - - - 293.76 304.41 - - - 304.41 279.65 - - - 279.65
Essar Steel India Limited

Financial Assets 822.45 30.94 - - 853.39 346.55 27.96 3.54 - 378.05 408.28 6.23 1.08 - 415.59
Covered by Derivative - - - - - - - - - - - - - - -
Contracts
Net Exposure to 822.45 30.94 - - 853.39 346.55 27.96 3.54 - 378.05 408.28 6.23 1.08 - 415.59
Foreign Currency risk
on Financial Assets
Borrowings 12,654.26 0.08 - - 12,654.34 13,679.37 18.50 - 1.90 13,699.77 15,980.24 50.18 5.76 - 16,036.17
Provisions 402.46 - - - 402.46 863.63 0.20 - - 863.83 2,023.20 1.26 - - 2,024.46
Trade and Other 993.76 81.88 77.20 0.73 1,153.57 771.53 83.30 119.89 3.38 978.11 679.05 89.86 28.37 2.99 800.27
Payables
Other Financial 919.42 - - - 919.42 976.76 - - - 976.76 7,347.17 - - - 7,347.17
Liabilities
Financial Liabilities 14,969.91 81.96 77.20 0.73 15,129.79 16,291.29 102.01 119.89 5.28 16,518.47 26,029.65 141.29 34.13 2.99 26,208.06
Covered by Derivative 57.52 - - - 57.52 1,554.15 11.19 - 1.90 1,567.23 1,239.44 26.67 - - 1266.11
Contracts
Net Exposure to 14,912.39 81.96 77.20 0.73 15,072.27 14,737.14 90.82 119.89 3.38 14,951.23 24,790.22 114.62 34.13 2.99 24,941.95
Foreign Currency
risk on Financial
Liabilities

41 st A N N U A L R E P ORT 2016-17
Notes to Consolidated Financial Statements for the year ended 31st March, 2017
 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(b) Sensitivity
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated
financial instruments and the impact on Other Comprehensive Income arises from application of hedge accounting on
certain derivative contracts.
` in Crore
Particulars Impact on Profit/Loss after Tax Impact on Other Comprehensive Income
As at As at As at As at
31st March, 2017 31st March, 2016 31st March, 2017 31st March, 2016
USD sensitivity
Increase by 5% 704.50 719.53 - (30.94)
Decrease by 5% (704.50) (719.53) - 30.94
EUR sensitivity
Increase by 5% (2.55) (3.13) - -
Decrease by 5% 2.55 3.13 - -
AED sensitivity
Increase by 5% (3.86) (5.82) - -
Decrease by 5% 3.86 5.82 - -
Others sensitivity
Increase by 5% (0.18) (0.17) - -
Decrease by 5% 0.18 0.17 - -
* Sensitivity impact on Profit/(Loss) includes increase/decrease of ` 315.78 Crores (Previous Year - ` 323.27 Crores)
pertaining to exposures for which the company has the policy of capitalising exchange differences to reserves -
FCMITDA or eligible items of Property, Plant and Equipment will be amortised to the statement of profit and loss over
the period of the underlying borrowing or remaining useful life of Property, Plant and Equipment.
- Interest rate risk
The interest rate exposure is mainly on account of floating interest rates where the company is exposed to upward
movements in the interest rates. The company explores possibility of interest rate swaps and interest rate structures
to hedge its risks.
(a) Interest rate risk exposure
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Variable Rate Borrowing 34,210.67 34,698.11 33,162.10
Other Financial Liabilities 9,295.66 7,796.88 7,245.12
Total Exposure 43,506.33 42,494.99 40,407.22
(b) Sensitivity
For the Year For the Year
31st March, 2017 31st March, 2016
` in Crores ` in Crores
Impact on Company’s Profit/ Loss If interest rates had been 50 basis points 217.53 212.47
higher / lower and all other variables were held constant.
1. The sensitivity analyses above have been determined based on the exposure to interest rates for floating rate
liabilities assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.
2. Sensitivity impact on profit /Loss includes impact pertaining to exposures for which the company capitalises the
borrowing cost to items of Property Plant and Equipment, which will be amortised to the statement of profit and
loss over the period of remaining useful life of property plant and equipments.
- Price risk
Commodity price risk
The Company has exposure to Commodity Price Risk on its raw materials required for Steel production and also on
its finished products (Steel and its variants). The Risk Department reviews the exposures, evaluates and hedges the
commodity price risks in close co-ordination with the Group Treasury in terms of the Board approved Policy document.
The Company hedges directly with International Commodity Exchanges and / or through International counterparties
using OTC derivative contracts based on appropriate Index / Exchange Listed Contracts.
As at the reporting date there are no outstanding commodity derivative contracts and hence the disclosures for
sensitivity has not been given.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 165 165

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Other price risks
The company’s exposure to price risks from investments in equity shares is considered immaterial.
51 Capital Management
The Company operates in a capital intensive industry. The objective of the Company’s capital management policies is
to maintain an optimal Capital Structure to reduce the Cost of Capital.
The Company’s capital requirement is mainly to fund capital expansion and fund the working capital requirement. The
Company sets the amount of Capital required on the basis of annual business plan and Long-Term operating plans.
The funding requirement is met through long term and short term borrowings along with internal accruals in the most
optimum manner.
52 Segment Information
The Company is in the business of manufacturing steel products having similar economic characteristics, primarily
operated in India. The information relating to revenue from external customers and location of non-current assets of
its single reportable segment has been disclosed as below:
(` in Crore)
Geographical Information Year ended 31st March, 2017 Year ended 31st March, 2016
India Outside Total India Outside Total
India India
Revenues (Income from operation) 16,836.05 6,312.14 23,148.19 12,921.11 2,728.58 15,649.69
Carrying amount of Non Current assets (other than 45,807.11 2,262.16 48,069.27 46,035.29 4,356.36 50,391.65
financial instruments and deferred tax assets)
53 Derivative Instruments

Sr Type of Transaction Amount Amount Amount Currency Purpose

No.
1 Principal Only Swap
2 Cross Currency Interest Rate
Swap
3 Rupee Indexed Interest Rate
Swaps (Overnight Index Swap)
4 Forward purchase contracts
(USD / INR)
5 Forward purchase contracts
(USD / INR)
6 Forward purchase contracts
(USD / INR)
7 Forward purchase contracts
(USD / INR)
8 Forward purchase contracts
(EURO / INR)
9 Forward purchase contracts
(EURO / INR)
10 Forward purchase contracts
(CAD / INR)
11 Forward sale contracts (USD /
INR)
12 Cross Currency EURO / USD
Forward purchase contracts
13 Cross Currency EURO / USD
Forward sale contracts
31st March 2017 31st March 2016 1st April 2015
- 4,675,000,000 16,490,000,000 INR To hedge the economic exposure
on future dollar-linked sales.
925,000,000 975,000,000 1,000,000,000 INR To convert floating rate Rupee
Term Loan into a floating
rate synthetic USD Liability
(equivalent of FC Loan)
- - 500,000,000 INR To reduce the interest cost on
Long Term Rupee Term loan
8,870,927 55,785,533 33,947,020 USD To hedge the exchange risk on
Letter of credit/Acceptance.
- 85,605,518 11,730,000 USD To hedge the exchange risk on
Sundry Creditors.
- 72,767,125 156,828,618 USD To hedge the exchange risk on
Buyers Credit.
- 33,200,000 - USD To hedge the exchange risk on
Interest on Credit facilities
- 599,610 - EUR To hedge the exchange risk on
letter of credit/acceptance
- 889,925 - EUR To hedge the exchange risk on
Buyers Credit.
- 370,430 - CAD To hedge the exchange risk on
letter of credit/acceptance
- - 255,000,000 USD To hedge the exchange risk on
export receivables
- - 3,950,550 EURO To hedge the exchange risk on
BC Payables
- - 3,500,000 EURO To hedge the exchange risk on
export receivables

166 166 41 st A N N U A L R E P ORT 2016-17

 54 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 at As at Year Ended Year Ended
31st March, 2017 31st March, 2016 31st March, 2017 31st March, 2016
As % of Amount As % of Amount As % of Amount As % of Amount
consolidated (` in consolidated (` in Crore) consolidated (` in consolidated (` in Crore)
net assets Crore) net assets profit or loss Crore) profit or loss
Parent Essar Steel India Limited 2.56% (101.51) 279.70% 5,003.38 91.77% (5,157.74) 98.95% (4,356.96)
Indian Paradeep Steel Company 0.27% (10.74) -0.56% (9.93) 0.01% (0.82) -0.01% 0.22
Subsidiary Limited
Essar Steel Logistics Limited -0.13% 5.15 0% 5.17 0.00% (0.02) (0.00) 5.12

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Foreign Essar Steel Trading FZE -1.30% 51.72 2.92% 52.32 0.01% (0.59) -0.09% 4.02
Subsidiary
Essar Steel Middle East FZE -10.46% 415.43 22.89% 409.52 -0.24% 13.54 -0.62% 27.26
Essar Steel (UAE) Limited -6.67% 265.12 - - - - - -
PT Essar Indonesia -15.23% 605.07 - - -0.99% 55.37 - -
Essar Steel Offshore Limited 13.21% (524.72) -16.39% (293.15) 4.39% (246.67) 3.06% (134.81)
Essar Minerals Limited -21.69% 861.50 55.48% 992.46 2.05% (115.13) 1.18% (51.74)
Essar Mineral Cooperatief U.A. -46.57% 1,849.94 107.79% 1,928.13 0.95% (53.21) 1.07% (47.30)
Essar Minerals Canada Limited -41.93% 1,665.67 94.86% 1,696.91 1.79% (100.57) 2.05% (90.20)
Essar Minerals INC 11.43% (453.85) -25.80% (461.46) 0.00% - -9.19% 404.80
New Trinity Holdings LLC and -70.17% 2,787.20 164.35% 2,939.83 -0.66% 37.08 1.73% (76.19)
Subsidiaries
Elimination/ Adjustment due to consolidation 300.07% (11,918.90) -615.23% (11,005.24) 0.28% (15.57) 0.35% (15.57)
Indian Essar Bulk Terminal Limited -0.20% 8.03 0.45% 8.03 -0.01% 0.76 -0.02% 0.76
Associates
Essar Power MP Limited -1.71% 67.92 3.80% 67.92 0.05% (2.58) 0.04% (1.79)
(Investment
as per Bhander Power Limited -11.18% 443.93 24.82% 443.93 0.61% (34.09) 1.61% (71.00)
the equity Essar Power Orissa Limited -0.06% 2.56 0.14% 2.56 0.00% 0.03 0.00% 0.03
method)
Essar Power Hazira Limited -0.07% 2.59 0.14% 2.59 0.00% 0.01 0.00% 0.01
Essar Steel Chhattisgarh Limited -0.15% 5.84 0.33% 5.84 0.00% (0.00) 0.00% (0.05)
Total 100.00% (3,972.05) 100.00% 1,788.82 100.00% (5,620.21) 100.00% (4,403.38)
Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017

167 167
 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
55 Related Party disclosures:
List of related parties and relationships
(a) Holding Companies
1 Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Ltd) Holding Company- (ESAHL)
2 Essar Steel Mauritius Limited – Intermediate Holding Company - (ESML)
3 Essar Global Fund Limited (FKA Essar Global Limited), Cayman Islands – Ultimate Holding Company
(EGFL)

(b) Fellow Subsidiaries (with whom transactions have taken place)

1 Aegis Limited (AEGIS)
2 AGC Networks Limited (AGCNL)
3 Arkay Logistics Limited (ALL)
4 Energy II Limited (EII)
5 Equinox Business Parks Pvt Limited 25
(EBPPL) (ceased to be fellow 26
subsidiary from 13.12.2016)
6 Essar Bulk Terminal (Salaya) Limited 27
(EBTSL)
7 Essar Bulk Terminal Paradip Limited 28
(EBTPL)
8 Essar Electric Power Development 29
Corporation Limited (EEPDCL)
9 Essar Energy Limited (FKA Essar 30
Energy Plc) (EEPLC)
10 Essar Energy Overseas Limited 31
(EEOL)
11 Essar Mineral Resources Limited 32
(EMRL)
12 Essar Offshore Subsea Limited 33
(EOSL)
13 Essar Oil Limited (EOL)
14 Essar Oilfields Services India Limited 35 Pt. Manoor Bulatn Lestari (PTMBL)
(EOSPL)
15 Essar Ports Limited (EPL)
16 Essar Ports Limited, Mauritius (FKA 37
Essar Africa Holdings Limited) (EAHL)
17 Essar Power (Jharkhand) Limited 38
(EPJL)
18 Essar Power Gujarat Limited (EPGL) 39
19 Essar Power Limited. (EPOL)
20 Essar Power Transmission Company 41
Limited (EPTCL)
21 Essar Project (India) Limited (EPIL)
22 Essar Projects Limited (EPLD)
23 Essar Shipping & Logistics Limited (ESALL)
24 Essar Shipping DMCC (ESLD)
Essar Shipping Limited (ESL)
Essar Steel Algoma Inc (ESA-INC)
Essar Steel Jharkhand Limited (ESJL)
Essar Steel Limited (FKA Essar Steel Holdings
Limited) (ESTLM)
Essar Steel Marketing Limited (EPML)
Essar Telecom Kenya Limited (ETKL)
Essar Vizag Terminal Limited (EVTL)
Ibrox Aviation and Trading Pvt. Ltd. (IV)
Jade Global Services FZE(FKA Essar Global Services
FZE)(EGSF)
34 PT Essar Minerals Indonesia (PTEMI)
36 Peak Trading Overseas Limited (PTOL)
Peakom SA (PKOM) (Ceased to be fellow subsidiary
w.e.f 24.02.2017)
The Mobilestore Services Private Limited. (TMSSL)
Vadinar Oil Terminal Limited (VOTL)
40 Vadinar Ports & Terminal Limited (VPTL)
Vadinar Power Company Limited (VPOCL)
42 Vadinar Properties Limited ( VPRL)

(c) Associates
1 Bhander Power Limited. (BPOL)
2 Essar Bulk Terminal Limited. (EBTL)
3 Essar Power (Orissa) Limited.
(EPOOL)
4 Essar Power Hazira Limited (EPHL)
5 Essar Power MP Limited(EPMPL)
6 Essar Steel Chhattisgarh Limited. (ESCL)
7 Essar Steel Processing FZCO (ESP-FZCO)
8 Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL)
(w.e.f. 21.05.2015 to 11.09.2015)

168 168 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(d) Key Management Personnel (with whom transactions have taken place)
1 Mr. Firdose A. Vandrevala, Executive Vice Chairman (FV) (ceased to be director w.e.f. 01.02.2016)
2 Mr. Dilip Oommen, Managing Director & DY. CEO (DO)
3 Mr. Mahadev Iyer, Director (Finance) & CFO (MI) (ceased to be director w.e.f 30.06.2017)
4 Mr. Rajiv Kumar Bhatnagar, Director (Projects) (RB)
5 Mr. Arvind Pande, Independent Director
6 Mr. V. G. Raghavan, Independent Director
7 Mr. S Santhanakrishnan, Nominee Director (ceased to be director from 06.07.16)
8 Mr. H Biswas, Nominee Director (ceased to be director from 27.11.2016)
9 Mr. Aloke Sengupta, Nominee Director
10 Mr. Sunit V Joshi. Nominee Director
11 Mr. Parveen Kumar Malhotra, Director

(e) Enterprise having influence over the Company

1 Imperial Consultants and Securities Private Limited (ceased to be related party w.e.f. 03.03.2016)
(ICASPL)
2 Imperial Consultants and Securities (ceased to be related party w.e.f. 03.06.2016) (ICAS)

Terms and conditions

Sales/Purchases:
The related party transactions attracting the compliance under Section 177 of the Companies Act were placed before
the Audit Committee for necessary approval/review. These transactions are in the ordinary course of business and
on prevailing pricing based on contractual terms and agreement.

ICD Given/Taken:
The Company had given/taken ICDs to/from related parties for general corporate purposes. These ICDs are
unsecured, carry an interest rate ranging from 3.5% to 16.25% and receivable/repayable on demand.

Guarantees to Related parties:

Guarantees given on behalf of related parties are for availing loan facilities from lenders and to government
authorities for general business purposes.

Guarantees from Related parties:

Guarantees provided by the related parties to lender of the company are for availing bank loan facilities.

During the year, following transactions were carried out with the related parties in the ordinary course of
business: (excluding reimbursement)

(` in Crore)
Sr. Particulars Holding Fellow Associates Key Management Enterprise
No. Companies Subsidiaries Personnel having influence
(a) Sales (Net) - 58.34 24.20 - -
- (78.33) (3.25) - -
(b) Income-Lease Rentals/Rent building - 4.85 14.00 - -
- (5.71) (13.85) - -
(c) Interest Income-Others - 41.74 - - -
(3.32) (93.04) (13.35) - -
(d) Sales of Fixed assets - - - - -
- - (0.11) - -
(e) Purchase of Raw Materials,Stores and - 997.12 450.01 - -
Spares, Production Consumables and - (808.33) (490.27) - -
Services

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 169 169

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(` in Crore)
Sr. Particulars Holding Fellow Associates Key Management Enterprise
No. Companies Subsidiaries Personnel having influence
(f) Purchase of Petroleum Products (Fuel) - 79.19 - - -
- 0.01 - - -
(g) Power Processing Charges / Recovery - -0.03 1,146.02 - -
- (-4.03) (191.56) - -
(h) Repairs and Maintenance - 8.23 - - -
- (5.73) - - -
(i) Plant and Equipment Hire Charges - 4.23 18.18 - -
- (16.60) - - -
(j) Labour Sub Contract Charges - 0.18 - - -
- (1.21) - - -
(k) Professional Fees - 5.38 - - -
- (30.11) - - -
(l) Office Rent - -7.25 - - -
- (7.26) - - -
(m) Freight Outwards Expenses - 283.43 45.14 - -
- (228.73) (57.01) - -
(n) Sales Commission - -1.94 - - -
- (-17.61) - - -
(o) Interest Expenses 34.10 128.67 93.23 - 1.86
(99.44) (404.13) (82.93) - -
(p) Capital Contract - 327.35 - - -
- (58.10) - - -
(q) Sale of stores & Spares - - - - -
- (1.30) (5.36) - -
(r) Directors' Remuneration* - - - 6.46 -
- - - (15.42) -
(s) ICD Given - - - - -
- (114.41) (499.95) - -
(t) Invocation of SBLC - - - - -
- - - - -
(u) Repayment of ICD given - 114.41 - - -
- - - - -
(v) ICD taken - 38.00 - - -
- (2,742.33) (376.65) - -
(w) Repayment of ICD taken - 1.74 361.95 - -
- (1,266.17) (289.70) - -
(z) Sale of Investment - - - - -
- - - - (33.87)
(aa) Sitting Fees - - - 0.27 -
- - - (0.30) -
* During the current financial year, the managerial remuneration ` 6.46 Crore paid by the Company is within the limits
prescribed under provision of Section 197 read with Schedule V of the Companies Act 2013 and the Company had
taken requisite shareholder’s approval for appointment and payment of managerial remuneration as required under
the Companies Act, 2013 subject to the approval of Central Government. The remuneration of ` 1.51 crores (out of
` 6.46 Crore) is pertaining to appointments made during current financial year, which needs approval of the Central
Government. The Company has made necessary applications to the Central Government seeking permission for this
payment of remuneration and the approval is awaited.

170 170 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Balance outstanding at year end

(` in Crore)
Sr. Particulars Holding Fellow Associates Key Enterprise
No. Companies Subsidiaries Management having
Personnel influence
(a) Long Term Investments - 3.56 186.20 - -
* - (21.74) (186.20) - -
** - (46.82) (186.20) - -
(b) Debtors - 26.92 0.10 - -
* - (31.15) - - -
** - (17.30) - - -
(c) Other Current Advance/Receivable - 38.56 - - -
* - (10.58) - - -
** - (0.32) (0.46) - -
(d) Deposits - - - - -
* - (4.37) - - -
** - (4.37) - - -
(e) Other Advance( Including Advance 0.50 102.58 3.57 - -
Towards Equity) * (0.50) (168.85) (13.88) - -
** (0.50) (1,972.08) (0.28) - (13.63)
(f) Sundry Creditors /Other Payable - 4,230.33 544.00 - -
* - (1,071.48) (494.63) - (119.36)
** (17.52) (1,166.42) (628.44) - (22.50)
(g) Capital Advances (CWIP) - 11.92 - - -
* - (16.49) - - -
** - (14.59) - - -
(h) Advance From Customer - 131.99 411.66 - -
* - (324.74) (0.25) - (177.22)
** - (494.28) (0.15) - -
(i) Inter Corporate Deposits Given - 67.13 - - -
* - (114.41) - - -
** (111.11) (77.43) - - -
(j) Inter Corporate Deposits Taken 1,346.85 2,915.85 - - -
* (1,327.13) (3,049.48) (361.95) - (87.50)
** (1,731.05) (1,862.41) (275.00) - -
(k) Security Deposits Received - 4.22 - - -
* - (4.22) - - -
** - (4.22) - - -
(l) Guarantees Given - 49.23 182.99 - -
* - (49.23) (182.99) - -
** - (49.23) (182.99) - -
(m) Guarantees Received 14,375.97 5,859.85 - - -
* (14,489.86) (5,881.51) - - -
** (14,301.82) (5,787.71) - - -
Note : * Figures mentioned pertains to 31st March 2016
** Figures mentioned pertains to 1st April 2015.
Balances are net of impairment / provision, if any.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 171 171

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Details of Party wise transactions :
(` in Crore)
Nature of Transaction Name of Related Party
BPOL EBTL EPOL EPHL EOL EPGL EPMPL AEGIS ALL EPIL ESL
(a) Sales (Net) - 24.20 - - 1.93 0.06 - - 6.26 49.62 -
(0.02) (3.23) (0.03) - (0.08) - - - (1.38) (64.22) -
(b) Income - Lease 11.12 0.43 0.02 2.46 0.10 - - 0.05 0.42 4.05 0.11
Rentals/Rent building (11.22) (0.28) (0.12) (2.35) (0.08) - - (0.30) (0.20) (4.92) -
(c) Interest - - - - 4.57 - - - - - 14.47
Income-Others - - - - (5.71) - - - - - (11.29)
(d) Sale Of Fixed Assets - - - - - - - - - -
- (0.11) - - - - - - - - -
(e) Purchases of Raw - 450.01 0.01 - 8.46 - - - 375.07 19.65 351.56
Materials ,Stores - (456.18) - - (2.62) - - - (217.37) (19.66) (418.95)
and Spares, Prod.
Consumables and
services
(f) Purchase of - - - - - - - - - - -
Petroleum Products - - - - 0.01 - - - - - -
(Fuel)
(g) Power Processing 18.87 - -0.03 290.17 - - 754.27 - - - -
Charges / Recovery (12.68) - - (125.40) - (0.01) - - - - -
(h) Repairs and - - 1.57 - - - - - - 6.66 -
Maintenance - - (2.68) - - - - (0.17) (0.11) (2.69) -
(i) Plant and Equipment - 18.18 - - - - - - 1.48 2.75 -
Hire Charges - - - - - - - - (16.43) (0.18) -
(j) Labour Sub Contract - - - - - - - 0.18 - - -
Charges - - - - - - - (0.01) (1.21) - -
(k) Professional Fees - - - - - - - 0.82 - 4.56 -
- - - - (0.08) - - (29.74) - (0.28) -
(l) Office Rent - - - - - - - - - - -
- - - - - - - - - - -
(m) Freight Outwards - 45.14 - - - - - - 239.81 - 9.19
Expenses - (57.01) - - - - - - (202.64) - (9.59)
(n) Sales Commission - - - - - - - - - - -
- - - - - - - - - - -
(o) Interest & Other 12.55 67.67 0.51 3.76 7.78 - 1.57 - - 59.07 -0.95
Financial Expenses (13.00) (58.14) (7.53) - (254.34) - - - (10.17) (25.09) (0.95)
(p) Capital Contract - - - - - - - - - 339.35 -
- - - - - - - - - (58.10) -
(q) Sale of stores & - - - - - - - - - -
Spares - (5.36) - - - - - - - (1.30) -
(r) Directors - - - - - - - - - - -
Remuneration - - - - - - - - - - -
(including
perquisites)
(s) ICD Given - - - - - - - - - - -
- - - - - - - - - - (114.41)
(t) Invocation of SBLC - - - - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - - 114.41
- - - - - - - - - - -
(v) ICD taken - - - - - - - - - - -
- (376.65) - - (2,047.94) - - - (200.30) - -
(w) Repayment of ICD - 361.95 - - - - - - - - -
taken - (14.70) - - (643.76) - - - (340.64) - -
(x) Purchase of - - - - - - - - - - -
Investments - - - - - - - - - - -
(y) Share Application - - - - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

172 172 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
EBTPL ESTLM EPML EOSL EPOOL EPTCL ESAHL AGCNL EBTSL VPTL EBPPL
(a) Sales (Net) 0.38 - - 0.01 - - - - - - -
- - - - - - - - (0.73) (11.88) -
(b) Income - Lease - - - - - 0.10 - - - - -
Rentals/Rent building - - - - - (0.09) - - - - -
(c) Interest - 20.95 - - - - - - -
Income-Others - (42.41) - - - - (3.32) - - - -
(d) Sale Of Fixed Assets - - - - - - - - - - -
- - - - - - - - - - -
(e) Purchases of Raw 63.63 - - - - - - - - - -
Materials ,Stores (132.40) - - - - - - - - - -
and Spares, Prod.
Consumables and
services
(f) Purchase of - - - - - - - - - - -
Petroleum Products - - - - - - - - - - -
(Fuel)
(g) Power Processing - - - - 82.71 - - - - - -
Charges / Recovery (-4.04) - - - (53.49) - - - - - -
(h) Repairs and - - - - - - - - - - -
Maintenance - - - - - - - (0.09) - - -
(i) Plant and Equipment - - - - - - - - - - -
Hire Charges - - - - - - - - - - -
(j) Labour Sub Contract - - - - - - - - - - -
Charges - - - - - - - - - - -
(k) Professional Fees - - - - - - - - - - -
- - - - - - - - - - -
(l) Office Rent - - - - - - - - - - -7.25
- - - - - - - - - - (7.26)
(m) Freight Outwards 24.64 - - - - - - - - - -
Expenses (17.51) - - - - - - - - - -
(n) Sales Commission - -1.94 - - - - - - - - -
- (-17.61) - - - - - - - - -
(o) Interest & Other 45.61 - 4.03 0.23 7.69 - - - - - -
Financial Expenses (15.49) (4.35) (8.00) (0.56) (3.03) - - - - (41.30) -
(p) Capital Contract - - - - - - - - - - -
- - - - - - - - - - -
(q) Sale of stores & - - - - - - - - - - -
Spares - - - - - - - - - - -
(r) Directors - - - - - - - - - - -
Remuneration - - - - - - - - - - -
(including
perquisites)
(s) ICD Given - - - - - - - - - - -
- - - - - - - - - - -
(t) Invocation of SBLC - - - - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - - -
- - - - - - - - - - -
(v) ICD taken - - 38.00 - - - - - - - -
- (464.31) - - - - - - - (29.78) -
(w) Repayment of ICD - - - 1.74 - - - - - - -
taken - - (275.00) (5.48) - - - - - - -
(x) Purchase of - - - - - - - - - - -
Investments - - - - - - - - - - -
(y) Share Application - - - - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 173 173

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
VPOCL OSPIL VPRL ESCL DO MI FV RB EMRL EVTL TMSSL
(a) Sales (Net) - - - - - - - - - 0.07 -
- - - - - - - - - - -
(b) Income - Lease - - - - - - - - - - -
Rentals/Rent building - - - - - - - - - - -
(c) Interest - - - - - - - - - - -
Income-Others - (13.35) - - - - - - - - -
(d) Sale Of Fixed Assets - - - - - - - - - - -
- - - - - - - - - - -
(e) Purchases of Raw - - - - - - - - - 35.14 -
Materials ,Stores - (34.09) - - - - - - (0.15) (16.88) (0.29)
and Spares, Prod.
Consumables and
services
(f) Purchase of - - - - - - - - - - -
Petroleum Products - - - - - - - - - - -
(Fuel)
(g) Power Processing - - - - - - - - - - -
Charges / Recovery - - - - - - - - - - -
(h) Repairs and - - - - - - - - - - -
Maintenance - - - - - - - - - - -
(i) Plant and Equipment - - - - - - - - - - -
Hire Charges - - - - - - - - - - -
(j) Labour Sub Contract - - - - - - - - - - -
Charges - - - - - - - - - - -
(k) Professional Fees - - - - - - - - - - -
- - - - - - - - - - -
(l) Office Rent - - - - - - - - - - -
- - - - - - - - - - -
(m) Freight Outwards - - - - - - - - - -
Expenses - - - - - - - - - 0.02 -
(n) Sales Commission - - - - - - - - - - -
- - - - - - - - - - -
(o) Interest & Other - - - - - - - - - - -
Financial Expenses (26.95) - (2.82) (8.75) - - - - - - -
(p) Capital Contract - - - - - - - - - - -
- - - - - - - - - - -
(q) Sale of stores & - - - - - - - - - - -
Spares - - - - - - - - - - -
(r) Directors - - - 3.38 2.50 - 0.58 - - -
Remuneration - - - - (2.82) (2.14) (10.46) - - - -
(including
perquisites)
(s) ICD Given - - - - - - - - - - -
- (499.95) - - - - - - - - -
(t) Invocation of SBLC - - - - - - - - - - -
- - - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - - -
- - - - - - - - - - -
(v) ICD taken - - - - - - - - - - -
- - - - - - - - - - -
(w) Repayment of ICD - - - - - - - - - - -
taken (1.28) - - (275.00) - - - - - - -
(x) Purchase of - - - - - - - - - - -
Investments - - - - - - - - - - -
(y) Share Application - - - - - - - - - - -
Money Refunded - - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - - -
- - - - - - - - - - -

174 174 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(` in Crore)
Nature of Transaction Name of Related Party
EEOL EII PKOM EAHL EPLD ICAS ESLD EGFL PTOL ESA-INC
(a) Sales (Net) - - - - - - - - - -
- - - - - - - - - -
(b) Income - Lease Rentals/Rent - - - - - - - - - -
building - - - - - - - - - -
(c) Interest Income-Others - - - 1.76 - - - - - -
- - - - - - - - (33.63) -
(d) Sale Of Fixed Assets - - - - - - - - - -
- - - - - - - - - -
(e) Purchases of Raw Materials, - 106.36 37.24 - - - - - - -
Stores and Spares, Prod. - - - - - - - - - -
Consumables and services
(f) Purchase of Petroleum 79.19 - - - - - - - - -
Products (Fuel) - - - - - - - - - -
(g) Power Processing Charges / - - - - - - - - - -
Recovery - - - - - - - - - -
(h) Repairs and Maintenance - - - - - - - - - -
- - - - - - - - - -
(i) Plant and Equipment Hire - - - - - - - - - -
Charges - - - - - - - - - -
(j) Labour Sub Contract Charges - - - - - - - - - -
- - - - - - - - - -
(k) Professional Fees - - - - - - - - - -
- - - - - - - - - -
(l) Office Rent - - - - - - - - - -
- - - - - - - - - -
(m) Freight Outwards Expenses - - - - - - 9.78 - - -
- - - - - - - - - -
(n) Sales Commission - - - - - - - - - -
- - - - - - - - - -
(o) Interest & Other Financial - - - - - 1.86 - 34.10 1.39 10.06
Expenses - - - - - - - (99.44) - (6.60)
(p) Capital Contract - - - - -12.00 - - - - -
- - - - - - - - - -
(q) Sale of stores & Spares - - - - - - - - - -
- - - - - - - - - -
(r) Directors Remuneration - - - - - - - - - -
(including perquisites) - - - - - - - - - -
(s) ICD Given - - - - - - - - - -
- - - - - - - - - -
(t) Invocation of SBLC - - - - - - - - - -
- - - - - - - - - -
(u) Refund of ICD Given - - - - - - - - - -
- - - - - - - - - -
(v) ICD taken - - - - - - - - - -
- - - - - - - - - -
(w) Repayment of ICD taken - - - - - - - - - -
- - - - - - - - - -
(x) Purchase of Investments - - - - - - - - - -
- - - - - - - - - -
(y) Share Application Money - - - - - - - - - -
Refunded - - - - - - - - - -
(z) Sale of Investment - - - - - - - - - -
- - - - - (33.87) - - - -

Details of Sitting Fees (` in Crores)

Particulars Year ended Year ended
31st March, 2017 31st March, 2016
To Independent Directors 0.23 0.26
To Nominee Directors and other director 0.04 0.04

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 175 175

 Balance outstanding as at the year end (` in Crore)

176 176
Particulars BPOL ESTLM ESAHL ESML ESCL EPIL ALL EBTPL EGFL EOL EBTL EPOL
Long Term Investments 104.77 - - - 5.78 - - - - - 1.30 -
* (104.77) - - - (5.78) - - - - (10.17) (1.30) -
** (104.77) - - - (5.78) - - - - (12.10) (1.30) -
Debtors - - - - - 19.86 - 0.43 - 0.01 0.10 -
* - - - - - (20.85) - - - (0.01) - -
** - - - - - (13.35) - - - - - -
Other Current Advance/ - 25.23 - - - - - - - - - -
Receivable * - - - - - - - - - - - -
** - - - - - - - - - - - -
Essar Steel India Limited

Deposits - - - - - - - - - - - -
* - - - - - - - - - (0.02) - -
** - - - - - - - - - (0.02) - -
Other Advance( Including - - - - 3.57 0.07 0.08 0.87 0.50 - - -
Advance Towards Equity) * - - - - (3.41) (2.37) (4.47) (10.90) (0.50) (0.04) - -
** - (590.54) - - (0.28) (0.06) (4.25) - (0.50) (2.75) - -
Sundry Creditors /Other Payable 198.69 5.61 - - - 428.97 157.46 322.17 - - 245.30 19.48
* (195.50) (10.06) - - - (91.11) (54.81) (338.51) - (300.73) (215.64) (19.25)
** (202.83) (236.97) (17.52) - (22.81) (241.09) (84.96) (221.96) - (68.47) (392.83) (111.17)
Capital Advances (CWIP) - - - - - 11.92 - - - - - -
* - - - - - (16.49) - - - - - -
** - - - - - (14.59) - - - - - -
Advance From Customer - - - - - 131.97 - - - - 411.66 -
* - - - - - (317.24) - - - (0.77) (0.25) -
** (0.15) - - - - (487.38) (0.05) - - (0.14) - -
Inter Corporate Deposits Given/ - 41.50 - - - - - - - - - -
Invocation of SBLC * - - - - - - - - - - - -
** - (77.43) (111.11) - - - - - - - - -
Inter Corporate Deposits Taken - 244.41 18.15 453.87 - - - - 874.82 - - -
* - (211.48) (18.57) (464.38) - - - - (844.18) (2,320.99) (361.95) -
** - - (841.18) - (275.00) - (140.34) - (889.86) (916.81) - -
Security Deposits Received - - - - - - - 4.22 - - - -
* - - - - - - - (4.22) - - - -
** - - - - - - - (4.22) - - - -
Guarantees Given - - - - - - - - - - - -
* - - - - - - - - - - - -
** - - - - - - - - - - - -
Guarantees Received - 5,859.85 10,100.41 4,275.56 - - - - - - - -
* - (5,881.51) (10,160.68) (4,329.17) - - - - - - - -
** - (5,787.71) (9,810.02) (4,491.80) - - - - - - - -

41 st A N N U A L R E P ORT 2016-17
Notes to Consolidated Financial Statements for the year ended 31st March, 2017

Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.
 (` in Crore)
Particulars AEGIS EPGL EPL ESA-INC EPJL EOSL ESP- EPOOL EPHL EAHL EMRL
FZCO
Long Term Investments - - - - - - 0.25 2.60 2.60 - -
* - - - - - - (0.25) (2.60) (2.60) - -
** - - (23.14) - - - (0.25) (2.60) (2.60) - -
Debtors - 0.07 - 2.17 - - - - - - -
* - - - (2.17) (7.97) - - - - - -
** - - - (3.86) - - - - - - -
Other Current Advance/Receivable - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - (0.46) - -
Deposits - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Other Advance( Including Advance Towards 0.01 - - 0.16 0.54 - - - - 0.18 0.38
Equity) * (0.01) - - (0.16) (0.61) - - (0.50) - (0.18) (0.38)
** - (0.11) - (0.16) (0.55) - - - - (0.18) (0.53)
Sundry Creditors /Other Payable 28.02 - - - - - 9.15 56.13 28.43 - -
* (33.08) - - (26.46) (0.06) (0.11) (9.43) (49.48) (24.58) - -
** (24.74) - - (24.97) - (2.32) - (6.92) - - -
Capital Advances (CWIP) - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - (-1.21) - - -
Advance From Customer 0.01 - - - - - - - - - -
* (0.01) - - - - (0.01) - - - - -
** (0.01) - - - - (0.01) - - - - -
Inter Corporate Deposits Given/Invocation - - - - - - - - - 25.63 -
of SBLC * - - - - - - - - - - -
** - - - - - - - - - - -
Inter Corporate Deposits Taken - - - 120.79 - - - - - - -
* - - - (78.03) - (1.74) - - - - -
** - - - (73.63) - (7.22) - - - - -
Security Deposits Received - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Guarantees Given - 49.23 - - - - - 26.05 43.93 - -
* - (49.23) - - - - - (26.05) (43.93) - -
** - (49.23) - - - - - (26.05) (43.93) - -
Guarantees Received - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.
Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017

177 177
 (` in Crore)

178 178
Particulars EEPDCL EOSPL VOTL VPOCL ESL EPMPL EBPPL AGCNL ETKL EEPLC EGSF
Long Term Investments - - - - 3.56 68.90 - - - - -
* - - - - (11.57) (68.90) - - - - -
** - - - - (11.57) (68.90) - - - - -
Debtors - - - - - - - - - - -
* - (0.06) - - - - - - - - -
** - - - - - - - - - - -
Other Current Advance/Receivable - - - - 13.02 - - - - - -
* - - - - (10.16) - - - - - -
** - - - - - - - - - - -
Essar Steel India Limited

Deposits - - - - - - - - - - -
* - - - - - - (4.35) - - - -
** - - - - - - (4.35) - - - -
Other Advance( Including Advance Towards - - 0.17 0.01 60.35 - - 0.11 0.06 0.55 -
Equity) * (0.01) (6.18) (0.17) (0.01) (95.58) (9.97) - (0.11) (0.06) (0.55) -
** (0.01) (7.89) (0.17) - (13.59) - - (0.21) (0.06) (0.55) -
Sundry Creditors /Other Payable 0.01 - - 0.02 74.63 6.30 - - - - 1.06
* - - - (13.46) (85.15) - (5.31) - - - (1.06)
** - - - (8.40) (64.50) (3.04) (1.04) - - - (1.06)
Capital Advances (CWIP) - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
Advance From Customer - - 0.01 - - - - - - - -
* - - - - (0.02) - - - - - -
** - - - - (0.02) - - - - - -
Inter Corporate Deposits Given/Invocation - - - - - - - - - - -
of SBLC * - - - - (114.41) - - - - - -
** - - - - - - - - - - -
Inter Corporate Deposits Taken - - - - - - - - - - -
* - - - (191.66) - - - - - - -
** - - - (192.94) - - - - - - -
Security Deposits Received - - - - - - - - - - -
* - - - - - - - - - - -
** - - - - - - - - - - -
- - - - - - - - - - -
* - - - - - - - - - - -
Guarantees Given ** - - - - - 113.01 - - - - -
- - - - - (113.01) - - - - -
* - - - - - (113.01) - - - - -
Guarantees Received ** - - - - - - - - - - -
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.

41 st A N N U A L R E P ORT 2016-17
Notes to Consolidated Financial Statements for the year ended 31st March, 2017
 (` in Crore)
Particulars PTOL EPML EPTCL ESALL OSPIL VPTL VPRL EII TMSSL EVTL
Long Term Investments - - - - - - - - - -
* - - - - - - - - - -
** - - - - (25.50) - - - - -
Debtors - - - - - - - - - -
* - (0.10) - - - - - - - -
** - (0.10) - - - - - - - -
Other Current Advance/Receivable - - 0.27 0.04 - - - - - -
* - (0.21) (0.17) (0.04) - - - - - -
** - (0.21) (0.07) (0.04) (3,868.50) - - - - -
Deposits - - - - - - - - - -
* - - - - - - - - - -
** - - - - - - - - - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7
Other Advance( Including Advance Towards Equity) - 34.18 0.10 - - - - - - 2.80
* - (34.18) (0.10) - - - - - (10.40) (2.38)
** (1,350.37) - (0.10) - (6.13) - - - - -
Sundry Creditors /Other Payable 37.37 3.46 - - - - - 15.01 0.34 0.14
* (0.63) - - - - (80.75) (8.05) (2.09) (0.34) (0.49)
** (0.63) (23.32) - - - (43.58) (5.51) - - -
Capital Advances (CWIP) - - - - - - - - - -
* - - - - - - - - - -
** - - - - - - - - - -
Advance From Customer - - - - - - - - - -
* - - - - - (0.01) - - - -
** - - - - - - - - - -
Inter Corporate Deposits Given/Invocation of SBLC - - - - - - - - - -
* - - - - - - - - - -
** - - - - (103.47) - - - - -
Inter Corporate Deposits Taken - 38.00 - - - - - - - -
* - - - - - (224.78) (20.80) - - -
** - (275.00) - - - (195.00) (20.80) - - -
Security Deposits Received - - - - - - - - - -
* - - - - - - - - - -
** - - - - - - - - - -
- - - - - - - - - -
* - - - - - - - - - -
Guarantees Given ** - - - - - - - - - -
- - - - - - - - - -
* - - - - - - - - - -
Guarantees Received ** - - - - - - - - - -
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.
Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017

179 179
 (` in Crore)

180 180
Particulars ICASPL ICAS EPLD IV ESLD PTEMI PTMBL ESJL
Long Term Investments - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Debtors - - - - - 4.39 -
* - - - - - - - -
** - - - - - - - -
Other Current Advance/Receivable - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Essar Steel India Limited

Deposits - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Other Advance( Including Advance Towards Equity) - - - - - - - 1.95
* - - - - - - - -
** (13.63) - - - - - - -
Sundry Creditors /Other Payable - - 15.25 305.53 0.18 0.14 0.15 2,815.34
* - (119.36) - - - - - -
** (22.50) - - - - - - -
Capital Advances (CWIP) - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Advance From Customer - - - - - - - -
* - (177.22) - - - - - -
** - - - - - - - -
Inter Corporate Deposits Given/Invocation of SBLC - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Inter Corporate Deposits Taken - - - - - - 2,512.65
* - (87.50) - - - - - -
** - - - - - - - -
Security Deposits Received - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Guarantees Given - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Guarantees Received - - - - - - - -
* - - - - - - - -
** - - - - - - - -
Note : * Figures mentioned pertains to 31st March 2016, ** Figures mentioned pertains to 1st April 2015, Balances are net of impairment / provision, if any.

41 st A N N U A L R E P ORT 2016-17
Notes to Consolidated Financial Statements for the year ended 31st March, 2017
 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
56 Contingent Liabilities not provided for

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
(a) Claims against the Company not acknowledged as debt
in respect of:
(i) Disputed Sales Tax/VAT/ Entry Tax matters in respect 17.01 18.68 18.68
which the Company has gone in appeal
(ii) Disputed Excise Duty matters in respect which the 0.17 0.17 0.17
Company has gone in appeal
(iii) Disputed Custom Duty / Export Duty matters in respect 73.89 134.11 134.11
which the Company has gone in appeal
(iv) Tax on sale of Electricity demanded by collector of 45.91 45.91 45.91
electricity duty on Essar Power Limited
(v) Electricity Duty demand (Including Interest)1 1,321.48 609.01 609.01
(vi) Wheeling Charges demanded by GETCO2 [including 393.01 393.01 393.01
amount paid ` 27.23 Crores (Previous year ` 27.23
Crores)]
(vii) Freight Claim by Railway [including amount paid ` 27.59 205.41 100.53 100.53
Crores (Previous year ` 27.59 Crores)]
(viii) Disputed Differential Electricity Duty [including amount 49.39 49.39 49.39
paid ` 49.39 Crores (Previous year ` 49.39 Crores)]
(ix) Electricity Charges by DGVCL3 (including amount paid ` 192.58 192.58 -
192.58 Crores)
(x) Disputed Cross Subsidy4 (including amount paid 534.97 327.28 -
` 168.60 Crores)
(xi) Take or Pay liability5 574.10 - -
(xii) Others 16.37 25.78 26.42
(b) Share in Contingent Liability of Associates 29.58 17.84 11.94
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 ` 612.79 Crore (Previous year ` 589.24 Crore) towards the arrears of the principal
amount of electricity duty. The appeal was dismissed on 07.09.2016. The Company has filed SLP No. 34384
of 2016, challenging the judgment of Divisional Bench of Gujarat High Court, however the Supreme Court vide
its order dated 02.05.2017 has rejected the SLP. The Company has filed review petition in the Supreme Court
for review of judgment dated 02.05.2017 which has been dismissed by the Supreme court on 05.10.2017. The
Company has filed Curative Petition on 21.11.2017. Further, the Collector Electricity Duty has revised their
demand for interest to ` 708.69 Crores on the Electricity Duty. The Company has already paid 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 has made in the books. However the Company has disclosed ` 612.79 (already paid)
Crore towards electricity duty and ` 708.69 Crore towards interest on electricity duty as contingent liability as at
31st March, 2017
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

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 181 181

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
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,
vide its order dated 5th December, 2011 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 Rs 393.01 Crore) as contingent liability as on 31st March 2016 towards
demand of transmission charges and has considered demand for interest as a remote liability.
3. By Order dated 30th June, 2010, the Hon’ble High Court of Gujarat had sanctioned the Scheme for amalgamation,
inter alia, of Essar Steel (Hazira) Limited, (“ESHL”) with Essar Steel India Limited (“ESIL”). The amalgamation
became effective from 5th August, 2010. The undertaking (i.e. properties and liabilities) of ESHL became the
undertaking of ESIL from the Appointed Date i.e. 1st April, 2009. Thereafter, ESIL has used the electricity,
including the electricity supplied by the Dakshin Gujarat Vij Company Limited (“DGVCL”), for manufacturing
goods through the undertaking of the erstwhile ESHL. Such use of electricity amounts to use of electricity by
ESIL itself.
DGVCL raised a Supplementary Bill dated 22nd September, 2011 claiming ` 2,311.02 Crore from ESIL on
the ground that ESIL has used the electricity in breach of the agreed terms of MOM dated 1st February, 2010
for ESIL has used electricity beyond the approved power boundary. Subsequently, DGVCL raised a revised
Supplementary Bill dated 25th January, 2012 for payment of a sum `192.58 Crore, and same has been paid
by ESIL to DGVCL under protest to obtain certain pending permissions from DGVCL. As per the facts, use of
electricity by ESIL beyond the approved power boundary has not caused any loss or prejudice to DGVCL. In
any case, DGVCL cannot apply the increased rate of tariff in respect of electricity generated by the captive
power plants of ESIL. ESIL has filed an appeal before Appellate Authority on 19th Nov, 2012 challenging the
claim of `192.58 Crore raised by DGVCL. The Appellate Authority and Chief Electrical Inspector (CEI) has ruled
that DGVCL can claim only to the extent of DGVCL’s power supplied in the concerned period which amounts to
25.23 million units and DGVCL shall refund the balance.
According to such ruling of the CEI, approx. ` 28.60 crores stands payable out of which ` 14.30 crores is
already paid by way of regular energy bill raised by DGVCL and ESIL is entitled to a refund of about ` 184.09
crores. DGVCL has challenged the Order of the Appellate Authority in Hon’ble High Court of Gujarat by way
of Special Civil Application. ESIL has also filed Special Civil Application in Gujarat High court mentioning that
there is no unauthorized use of power considering merger Order dated 30.06.2010 passed by the Hon’ble
High Court of Gujarat or assuming without admitting that there has been unauthorized use of power, the same
ought to have been only for 6.63 MU on the basis of proportionate of 25.23 MU supplied by DGVCL during
15.06.11 to 30.07.2011 Ld Single Judge of High Court of Gujarat by way of Judgment dated 22.01.2015 held
that the Court did not find any arbitrariness, perversity or illegality in the impugned order dated 01.11.2013,
passed by the Appellate Authority directing the refund of the excess amount paid by Essar pursuant to the
revised supplementary bills over and above the quantity of unauthorized power used by Essar. DGVCL by way

182 182 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
of LPA no 465 and 466 of 2015 challenged the Judgment of Single Judge dated 22.01.2015 before the Div.
Bench of Gujarat High Court, the Div. Bench without going in to the merits of case passed order on the point
of maintainability and allowed the LPAs. The company has filed SLP No 27920 & 27921 of 2015 before the
Supreme Court of India against the Order dated 17.07.2015 of the Div. Bench of Gujarat High Court, which is
pending for hearing. Meanwhile DGVCL has also filed a civil suit No. 373 of 2016 against ESIL in the Court
of Senior Civil Judge, Surat for recovery of their dues. ESIL has challenged the maintainability of suit on the
ground of limitation and statutory bar under the Electricity Act. The next date will be notified later.
4. The Company has been granted the status of a Regional Entity, vide order dated 08.06.2013 by Central
Electricity Regulatory Commission (CERC). The Company disconnected itself from the 220 KV STU network
on 23.06.2013 and upon shifting of the connectivity from the State Load Dispatch Centre Gujarat (SLDC) to
Western Regional Load Dispatch Centre (WRLDC) Company has ceased to be an embedded customer of
Gujarat for all intent and purposes and it is treated as a regional entity independent of the State of Gujarat in
the matter of scheduling, dispatch, energy accounting etc.
In view of the above, supported by opinion from a senior Advocate, the Company has informed Dakshin Gujarat
Vij Company Ltd. (DGVCL) about wrongfully levied cross subsidy surcharge upon the regional entity and claimed
the refund of cross subsidy paid during June 2013 to June 2015 vide letter dated July 27, 2015. Accordingly,
the amount of cross subsidy surcharge levied during the period from June 2013 to March 2017 amounting
to Rs 534.97 Crores has not been recognized. The company had filed Petition No.216/MP/2015 in CERC
on 08.09.2015 challenging claims of DGVCL as cross subsidy. The CERC vide its Order dated 06.07.2016
dismissed the Petition holding that the Gujarat Commission has jurisdiction to decide the issue, accordingly,
the Company has filed Petition No 1601 of 2016 before GERC challenging the levy of Cross subsidy and the
same was argued by companies Sr Counsel and the hearing is continued and next date will be communicated
by GERC.
Meanwhile, DGVCL has also filed Petition No.151/MP/2016 in CERC for Recall of the permission granted
in the Order dated 08.06.13 passed by the Hon’ble CERC In Petition No 245/MP/2012 granting connectivity
to the interstate transmission network of PGCIL for the premises of the and seeking direction for recovery
of outstanding cross subsidy amount. CERC heard the matter on limited scope of maintainability of DGVCL
petition, the company has filed its reply on 29.12.2016 only on the point of maintainability. The matter before
the CERC is reserved for order on the issue of maintainability. No further date notified.
5. A Claim of Rs 574.10 Crores has been raised by Indian Oil Corporation Ltd. (IOCL) on Essar Oil Ltd. (EOL)
under the “Take or Pay” provision of the GSA dated 15th January 2009 between IOCL and Essar Steel India
Limited (ESIL) and the Assignment Agreement dated 14th November 2013 between ESIL, EOL and IOCL. An
amount of ` 186 Crores have been recovered by IOCL from EOL through invocation of Bank Guarantee on
16.02.2017. EOL has raised the said claim on ESIL under provisions of the “Agreement Recording terms of
Assignment between Essar Steel and Essar Oil dated 25th September 2014.
The claim of IOCL has been challenged by EOL on the following grounds :
a) ESIL /IOCL agreement is a back to back agreement flowing from the agreement between Rasgas and
PLL and PLL and IOCL. Since IOCL has not received any Take or Pay claims from PLL, IOCL cannot
claim same from Essar Steel. Further IOCL has been able to sell all the gas it received under the contract
and has not incurred any loss due to non-offtake by ESIL and as such cannot claim “Take or Pay” from
ESIL.
b) IOCL has been in breach of the provisions of the contract by not been able to supply gas at the contractual
terms for more than 180 days in FY 2014. Further ESIL is eligible for raising Liquidated Damage claim on
IOCL due to the non- performance of IOCL under the Gas Sales Agreement.
Further, as per the Provisions of the contract (Clause 6.3 of the GSA between ESIL and IOCL) the Take or
Pay payment has to be compensated through supply of Make up Gas in the subsequent period of the contract.
Further, under Clause 19.9 (b) once the “Make Up” rights are accrued on payment of the Take or Pay amount
it survives the termination of the contract. Under above circumstances the amount recovered as “Take or Pay”
is an advance paid to IOCL towards future supply / receivables.
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crore ` in Crore ` in Crore
(c) Guarantees given to various Banks, Financial 232.22 715.46 1,104.49
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

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 183 183

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
57 Commitments

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
(a) Estimated amount of contracts remaining to be 287.70 397.65 531.39
executed on capital account and not provided for
(b) Share in Commitments of Associates 62.55 61.40 62.42
(c) Custom Duty on pending export obligation under 3,609.71 4,328.43 4,500.95
EPCG scheme

58 Employee Benefits
(i) Defined Contribution Plan
The company has a defined contribution plan whereby contribution are made to provident fund in India for
employees at a percentage of basic salary as per regulations. Contributions are made to registered provident
fund administered by government. The obligation of the company is limited to the amount contributed and it
has no further contractual or constructive obligation. Company’s contribution to Provident Fund aggregating to
` 15.22 Crores (Previous year ` 18.75 Crores) are recognised in the Statement of Profit and Loss and capital
work in progress, as applicable.
(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 a separate fund that is legally separated from
the entity.
The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the
year are as follows:
Year Ended Year Ended
31st March, 2017 31st March, 2016
` in Crores ` in Crores
Net employee benefit expense recognised
Current Service Cost 5.89 6.12
Exchange Variation Impact (0.47) -
Net Interest/(Income) on net defined benefit liability/(asset) 2.70 1.52
Expenses Recognised in the Statement of Profit and Loss 8.11 7.63
Other Comprehensive Income
Actuarial (gain)/loss recognised in the year due to liability
experience changes (3.35) 0.67
Actuarial (gain)/loss recognised in the year due to liability
assumption changes 3.18 -
Actuarial (gain)/loss arising on the liability during the period (0.17) 0.67
Add: Return on Plan Assets (greater)/less than discount rate 0.26 (0.44)
Actuarial Loss/(Gain) recognised in OCI 0.09 0.23
Defined Benefit Cost
Service Cost 5.89 6.12
Net interest/(income) on net defined benefit liability/(asset) 2.70 1.52
Actuarial (gain)/loss arising recognised in OCI 0.09 0.23
Defined Benefit Cost 8.68 7.87
Balance Sheet
Details of provision for Gratuity
Defined Benefit Obligation (76.85) (58.12)
Fair value of Plan Assets 37.13 34.01
Funded Status [Surplus/(Deficit)] (39.72) (24.11)
Net Defined Benefit Asset/(Liability) (39.72) (24.11)

184 184 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at
31st March, 2017 31st March, 2016
` in Crores ` in Crores
Reconciliation of Net Balance Sheet Position
Net defined benefit asset/(liability) at the end of prior period (37.37) (24.40)
Service cost (5.89) (6.12)
Net interest on net defined benefit (liability)/asset (2.70) (1.52)
Gain/(Loss) recognised in OCI (0.09) (0.23)
Employer Contribution 5.94 7.66
Transfers credit/(cost) - (0.65)
Net Defined Benefit (Liability)/Asset at the end of reporting period (40.10) (25.26)
Changes in the present value of the defined benefit obligation are
as follows:
Projected Benefit Obligations (PBO) at the beginning of the year 71.81 64.31
Service Cost 5.89 6.12
Interest Cost 5.38 4.28
Acquisition/Transfer In/(Transfer Out) - 0.65
Actuarial (gain)/loss on obligations (0.15) 0.67
Actuarial (gain)/loss - experience (3.17) -
Actuarial (gain)/loss - financial assumptions 2.67 -
Benefits paid (5.57) (17.91)
PBO at the end of the year 76.85 58.12
Changes in the fair value of plan assets are as follows:
Fair Value of Plan Assets at the beginning of the year 34.01 39.92
Interest Income on Plan Assets 2.68 2.76
Contributions/Transfers 5.94 7.66
Benefits paid (5.23) (16.77)
Return on Plan Assets greater/(less) than discount rate (0.26) 0.44
Fair Value of Plan Assets at the end of the year 37.14 34.01
The Company expects to contribute ` 7.92 crores (previous years ` 9.00 crores) to its gratuity plan for the next
year.
Expected benefits payment for the year ending

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Less than 1 year 7.92 7.98 9.04
Between 2 to 5 years 30.44 31.03 34.94
Over 5 years 39.26 40.06 44.95

Weighted Average duration of the defined benefit obligation 8 years

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 185 185

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
Investment details of plan assets

Plan assets comprise of Schemes of Insurance - Conventional products

As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Sensitivity Analysis - Impact on Increase Decrease Increase Decrease Increase Decrease
DBO

Discount Rate (0.5% movement) (2.00) 2.13 (1.72) 1.83 (1.87) 1.99
Salary Escalation Rate (0.5% 1.45 (1.44) 1.33 (1.31) 1.49 (1.46)
movement)
Withdrawal Rate (3% movement) 1.03 (1.52) 0.95 (1.32) 0.89 (1.26)

Assumptions
Discount Rate 7.00% 7.80% 7.80%
Salary Escalation Rate 7.50% 7.50% 7.50%
Withdrawal Rate 10.00% 10.00% 10.00%
Mortality Indian Assured Lives Mortality (2006 - 08) Ult. Modified

(iii) Compensated Absences

Present Value of Unfunded (16.87) (16.58) (25.93)
Obligation
Expense recognised in 2.36 1.58 2.17
Statement of Profit and Loss
Discount rate (p.a.) 7.00% 7.80% 7.80%
Salary Escalation Rate (p.a.) 7.50% 7.50% 7.50%

59 Leases
Finance Lease
The company has evaluated certain arrangements based on facts and circumstances and have identified them in
the nature of lease as the fulfillment of the arrangements depend upon a specific asset and the company has right
to use the asset. After separating lease payments from the other elements in these arrangements, the company has
recognized plant and machinery as Assets taken under finance leases. The lease arrangements are for 15-20 years.
At the end of non cancellable period, the lessors have a put option to sell the underlying assets to the company.
Operating Lease
i) Embedded operating leases: The company has evaluated certain Power purchase arrangements based on facts
and circumstances and have identified them in the nature of lease as the fulfillment of the arrangements depend upon
a specific asset and the company has right to use the asset. After separating lease payments from the other elements
in these arrangements, the company has recognized these leases as operating leases. The lease arrangements are
for 5 years.
ii) Other leases: 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.

186 186 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 2017 31st March, 2016 1st April, 2015
` in Crores ` in Crores ` in Crores
Finance Operating Finance Operating Finance Operating
lease lease lease lease lease lease
Total minimum lease payments at the 2,236.76 - 2,357.24 - 31.56 -
year end
Less: amount representing finance 1,341.82 - 1,485.79 - 26.81 -
charges
Present value of minimum lease 894.94 - 871.46 - 4.75 -
payments
Lease payments for the year 156.36 387.55 41.06 217.24 1.28 40.11
(accrual)
Not later than one year 214.24 530.07 178.01 297.36 1.92 79.13
Later than one year but not later than 627.20 1,468.74 627.20 887.00 1.76 228.02
five years
Later than five years 1,395.33 21.74 1,552.04 28.22 27.88 34.39

60 Earning Per Share

For the year For the year

31st March, 2017 31st March, 2016
` in Crores ` in Crores
Net Profit/(Loss) as per statement of Profit & Loss (5,620.37) (4,403.38)
Weighted average number of shares for the purpose of calculating Basic & 3,108,957,660 3,108,957,660
Diluted earning per share (in nos.)
Basic & Diluted earning/(loss) per Equity share of ` 10 each (in Rupees) (18.08) (14.16)

61 First time adoption of Ind AS

i) First Ind AS Financial statements:
These are the company’s first consolidated financial statements prepared in accordance with Ind AS applicable
as per Section 133 of Companies Act, 2013 as per Companies (Indian Accounting Standards) Rules, 2015 for
the year ended 31st March 2017.
The accounting policies set out in Note no. 4 have been applied in preparing the financial statements for
the year ended 31st March 2017, the comparative information presented in these financial statements for the
year ended 31st March 2016 and in the preparation of an opening Ind AS balance sheet at 1st April 2015 (the
date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts
reported previously in financial statements prepared in accordance with the accounting standards notified
under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act
(previous GAAP or Indian GAAP).
This note provides an explanation of how the transition from previous GAAP to Ind AS has affected the
company’s financial position as on 1st April 2015 and 31st March 2016 and financial performance for the year
ended 31st March 2016.
ii) Optional exemptions availed
a. Business combinations
The company has availed the business combination exemption on first time adoption of Ind AS and
accordingly the business combinations prior to date of transition have not been restated to the accounting
prescribed under Ind AS 103 – Business combinations.
The company applies the requirements of Ind AS 103 – Business combinations to business combinations
occurring after the date of transition to Ind AS.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 187 187

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
b. Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value measured as per the
previous GAAP for all of its items of property, plant and equipment, and use that as its deemed cost
as at the date of transition after making necessary adjustments for de-commissioning liabilities. This
exemption can also be used for intangible assets. Accordingly, the Company has elected to measure all
of its property, plant and equipment and intangible assets at their previous GAAP carrying value as its
deemed cost on the date of transition.
c. Long term foreign currency monetary item
A first-time adopter may continue the policy adopted for accounting for exchange differences arising
from translation of long-term foreign currency monetary items recognised in the financial statements for
the period ending immediately before the beginning of the first Ind AS financial reporting period as per
the previous GAAP.
The Company has opted for the above exemption for the long-term foreign currency monetary items
recognised upto 31st March 2016.
d. Investment in subsidiaries and associates
In financial statements, entities can measure investments in subsidiaries, jointly controlled entities and
associates at either:
• cost, determined in accordance with Ind AS 27
• deemed cost, defined as fair value
• deemed cost, defined as previous GAAP carrying amount
Accordingly, the Company has elected to measure all of its investments in subsidiaries, associates and
joint ventures at their previous GAAP carrying value.
e. Leases
This exemption allows first-time adopter to apply Appendix C of Ind AS 17 to determine whether an
arrangement existing at the date of transition to Ind ASs contains a lease on the basis of facts and
circumstances existing at the date of transition to Ind AS.
The company has elected to apply this exemption for all such transactions.
f. Designation of previously recognised financial instruments
This exemption allows the entity to designate an investment in an equity instrument as at fair value through
other comprehensive income on the basis of the facts and circumstances at the date of transition to Ind AS
The company has elected to apply this exemption for its investment in equity instruments.
g. Non-current assets held for sale and discontinued operations
This exemption requires non-current assets (or disposal groups) that meet the criteria to be classified as
held for sale to be carried at lower of its carrying amount and fair value less cost to sell as per Ind AS 105
and recognise directly in retained earnings any difference between that amount and the carrying amount
of those assets at the date of transition to Ind AS. The company has elected to apply this exemption and
measured the assets held for sale at lower of carrying value and fair value less costs to sell at the date
of transition.
iii) Mandatory exceptions applied
a. Estimates
The company’s estimates in Ind ASs at the date of transition, are required to be consistent with estimates
made for the same date in previous GAAP (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1st April 2015 are consistent with the estimates as at the same date made
in conformity with previous GAAP except where Ind AS required a different basis for estimates as
compared to the previous GAAP.
b. De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively
for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a
first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date
of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets
and financial liabilities derecognised as a result of past transactions was obtained at the time of initially
accounting for those transactions.

188 188 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
The company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of
transition to Ind AS.
c. Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets as per Ind AS
109 on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
d. Hedge Accounting
The company has used derivative financial instruments - Principal Only Swaps to hedge its foreign
currency risks. The company has designated various cash flow hedges and applied hedge accounting
principles to avoid profit or loss mismatch. All the hedges designated under previous GAAP are of types
which qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the company, before
the date of transition to Ind AS, has designated a transaction as hedge and also meets all the conditions
for hedge accounting in Ind AS 109. Therefore, the company continues to apply hedge accounting after
the date of transition to Ind AS.
Reconciliation of Equity and Total Comprehensive Income
(i) Reconciliation of Equity
Particulars Note As at As at
31st March, 2016 1st April, 2015
` in Crores ` in Crores
Equity as per Previous GAAP 4,616.99 10,306.03
Adjustment Gain/(Loss):
Treasury Shares reclassified to Equity a (766.07) (766.07)
Impact of classifying CRPS as a Financial Liability and b (61.14) (55.35)
measurement as per the Amortised Cost method
Impact of recognizing sale and leaseback - embedded finance c (272.16) (2,793.04)
leases as per Ind AS 17
Share of Revaluation of Property, Plant and Equipments of an 247.48 295.40
associate
Provision for credit losses as per Expected credit Loss method d (327.74) -
Others (10.61) (18.07)
Deferred Tax Impact on Above Items e 176.67 982.75
Deferred Tax Liability on Revaluation of Land and Plant & e (1,814.60) (1,872.68)
Machinery under previous GAAP
Equity as per IND AS 1,788.82 6,078.97

(ii) Reconciliation of Total Comprehensive Income

Particulars Note Year Ended
31st March, 2016
` in Crores
Net Loss as per IGAAP (5,795.33)
Adjustment Gain/(Loss):
Impact of classifying CRPS as a Financial Liability and measurement as per b (5.80)
the Amortised Cost method
Impact of recognizing sale and leaseback - embedded finance leases as per c 2,520.88
Ind AS 17
Provision for credit losses as per Expected credit Loss method d (327.74)
Others (47.20)
Deferred Tax Impact on Above Items e (806.27)
Reversal of Deferred Tax Liability on Revaluation of Land and Plant & e 58.08
Machinery under previous GAAP
Net Loss as per IND AS (4,403.38)
Other Comprehensive Income (net of tax) f (48.97)
Total Comprehensive Income under Ind AS (4,452.35)

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 189 189

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
(iii) Impact of IND AS adoption on Statement of Cash Flows for the year ended 31st March 2016:

31st March, 2016 IND AS 31st March, 2016

(IGAAP) Adjustment (IND AS)
(` in Crores) (` in Crores) (` in Crores)
A. Cash flow from operating activities 1,553.36 84.18 1,637.54
B. Cash flow from investing activities 1,102.71 8.90 1,111.61
C. Cash flow from financing activities (2,829.61) (93.08) (2,922.69)
(173.54) 0.00 (173.54)
Cash and cash equivalents at the beginning of
the year 282.56 - 282.56
Cash and cash equivalents at the end of the
year 109.02 - 109.02
173.54 - 173.54

a Impact of Treasury shares

Previous GAAP - The Company has classified Treasury Shares under other non-current asset.
Ind AS - The Treasury Shares held by the entity amounting to Rs 766.07 Crores have been
reclassified from Other non-current asset to Equity and disclosed separately under ‘Other Equity’.
As per Ind AS 32, own equity instruments reacquired by an entity i.e. ‘treasury shares’ shall be
deducted from equity. No gain or loss shall be recognised in profit or loss on the purchase, sale,
issue or cancellation of an entity’s own equity instruments.
b Impact of 10% Cumulative Redeemable Preference Shares (CRPS)
Previous GAAP - CRPS were recognised as share capital. Dividends were recognized as and
when proposed by the Board of Directors.
Ind AS - On the transition date, CRPS of ` 43.60 Crore is reclassified from Equity into Financial
Liabilities–Borrowings. Preference Shares containing a contractual obligation to settle in cash and
pay dividends are classified as a financial liability. CRPS is initially recognised at fair value i.e.
proceeds minus transaction costs. Subsequently, it is measured at amortized cost using the effective
interest rate. The impact on this account amounting to Rs 11.75 Crore has been recognised in the
Retained Earnings on 1st April 2015. Therefore total impact on Equity on transition date amounts to
Rs 55.35 Crore. Subsequent impact i.e. finance cost of Rs 5.80 Crore recognised in the statement
of profit and loss for the year ended 31st March, 2016.
c Impact of Sale and embedded lease back arrangement
Previous GAAP - A Business Undertaking comprising of Slurry Pipeline and its associated
facilities were sold and entered into a long term Right to Use Agreement to use the said assets and
recognized a profit amounting to Rs 2,793.04 Crores in FY 2014-15. The transaction was annulled
and the profit of Rs 2,793.04 crores and related Deferred Tax were reversed in FY 2015-16.
Ind AS - The above transaction was assessed as finance lease under Appendix C to Ind AS 17.
Therefore, the gain on sale of business undertaking is deferred over the period of the arrangement,
i.e., ` 2793.04 crores and related deferred tax has been adjusted in retained earnings on the date
of transition. The commencement of the Lease is w.e.f 1st April 2015. On annulment of the said
transaction in the year FY 2015-16, account balances have been reversed and impact of ` 2,793.04
crores and related deferred tax is recognized in profit and loss for the year ended on 31st March
2016.
Previous GAAP - The Company sold a Business Undertaking, comprising of Air Separation Unit
for ` 850 Crore and recognised a gain of Rs 265.44 crores in the statement of profit and loss for the
year ended 31st March 2016. The Company entered into a Job Work Agreement and recognised job
work charges.
Ind AS - This transaction has been assessed as finance lease under Appendix C to Ind AS 17.
Therefore the gain of Rs 265.44 crores on sale of business undertaking is deferred over the period
of the arrangement. Net impact on account of this change on equity and total comprehensive
income is ` 272.16 Crores in the year FY 2015-16.

190 190 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
d Provision for credit losses as per Expected credit Loss method
Under previous GAAP, the Company had created allowance for financial assets based on incurred
loss model. Under Ind AS, impairment allowance has been calculated based on expected credit
loss model. As a result, provision for expected credit loss of ` 327.74 crores is recognised in
Statement of Profit and Loss for the year ended 31 March 2016.
e Deferred Tax
Deferred Tax Impact on Above Items
Previous GAAP required deferred tax accounting using the profit and loss approach, which
focuses on differences between taxable profits and accounting profits for the period. Ind AS 12
requires entities to account for deferred taxes using the balance sheet approach, which focuses on
temporary differences between the carrying amount of an asset or liability in the balance sheet and
its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on
new temporary differences which was not required under Previous GAAP.
Deferred Tax Liability on Revaluation of Land and Plant & Machinery under previous GAAP
The Company has recognized revaluation reserve on revaluation of certain assets of the Company.
Deferred Tax was not recognized under the previous GAAP.
Under Ind AS, the revalued carrying amounts of these assets has been considered as deemed cost.
The revaluation has led to a temporary taxable difference between the book base and tax base
of the respective assets. Accordingly, deferred tax liability has been recognised and the impact of
` 1,872.67 Crore has been charged to Other Equity on the transition date. Subsequently, the impact
of reversal of deferred tax liability of ` 58.08 crores has been recognised in the statement of profit
and loss.
f Other comprehensive income (OCI)
Under previous GAAP, the Company was not required to present other comprehensive income
(OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS.
Further, Ind AS profit or loss is reconciled to total comprehensive income.
Items recognised in OCI mainly comprise of
a) fair value changes and gains / losses on investments in equity instruments designated as fair
value through OCI on the date of transition
b) Remeasurements on defined benefit obligation
c) effective portion of gains and losses on the hedging instrument in a cash flow hedge
d) tax impacts on the above items has been recognised in OCI.
62 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.
63 Current Liabilities includes current maturity of long term debt (repayable within one year as per existing repayment
schedule) and Long-Term Export Performance Bank Guarantees (EPBG) crystalized into a fund based liability, for
which a repayment schedule is yet to be decided. The Company has been actively engaged in discussion with its
lenders to implement a restructuring scheme under the RBI guidelines. The restructuring scheme includes inter alia
following:
a. Ascertainment of sustainable debt.
b. Repayment schedule of the sustainable debt based on the residual useful life of the assets of the Company.
c. Infusion of fresh Equity.
d. Conversion of Inter Corporate Deposits (ICDs) from related party in to Cumulative Redeemable Preference
Shares (CRPS).
e. Conversion of part of the unsustainable debt in to Equity.
f. Conversion of balance unsustainable debt in to CRPS.
g. Alignment of Interest rates.

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 191 191

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
The restructuring scheme is based on financial projections for future years contained in restructuring plan and as per
discussions with MECON Limited, appointed by the lenders as independent Techno Economic Viable (TEV) consultant
for the purpose of restructuring. MECON limited has submitted draft TEV report incorporating their assessment of the
company’s profitability in future years based on current performance and future potential of the Company.
Meanwhile on 13th June 2017, RBI directed the lenders to refer certain companies including Essar Steel India Ltd.
to National Company Law Tribunal (NCLT) under Insolvency Bankruptcy Code (IBC), 2016. The Company believes
that upon implementation of suitable restructuring/resolution plan, financial position of the Company shall improve
significantly.
64 Current 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 which was disputed by Commission
of Central Excise and issued a show cause notice dated 18.11.2008 alleging wrong availment of the CENVAT by the
company. 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.
Both the above show cause notices have been adjudicated by the Commissioner of Central Excise vide order
dated 31.03.2017 wherein it has been held that DGCEI has no jurisdiction to investigate into the matters related
to SEZ. Further a demand of customs duty of Rs 24.82 Crore for the period 21.03.2007 to 11.04.2007 has been
confirmed, CVD portion of Custom Duty Rs 140.35 Crore which was availed by the company as Cenvat credit has
been appropriated and also appropriated the remaining amount of Rs 20.99 Crore and credited it to Consumer welfare
fund. The Commissioner further held that the cenvat credit of Rs 140.35 Crore is correctly availed by the company.
The Company is in process to file an appeal against the Commissioner’s order towards confirming the demand of Rs
24.82 Crore and appropriation of amount of Rs 20.99 Crore.
65 The Company has invested ` 738.07 Crore in the equity shares of Essar Steel Offshore Limited, Mauritius (ESOL), a
wholly owned subsidiary of the Company as at 31st March, 2017. The Company along with Essar Minerals Ltd. and
Essar Minerals Cooperative U. A. had given a guarantee of up to USD 572.99 million for a loan taken by Essar Steel
Offshore Limited (ESOL) from Standard Chartered Bank (SCB) for the acquisition of New Trinity Coal Inc., (“Trinity”)
in July, 2010. 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. SCB has issued a demand notice dated 7th December, 2015
demanding immediate repayment of the full amount of the outstanding loan, together with accrued interest and all
other amount due and payable as on date, aggregating to USD 450.67 Million (USD 526.68 million as on 31st March,
2017) on the principal borrower and all the guarantors. SCB’s primary security is the assets of Trinity and pledge of
the shares. Considering the coking coal reserves available and business valuation of Trinity based on future cash flow
projections of Trinity business, a provision of ` 2,334.60 Crore (US $ 360 million) has been made for diminution in the
carrying values of assets in the consolidated financial statement.
66 Borrowings Note

As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
Long Term Borrowings Note
(1) Non Convertible Debentures
Secured by pari passu first charge on movable fixed assets 342.21 319.54 344.18
and mortgage of immovable properties of the Company
(except leasehold rights on the Visakhapatnam Port
Trust land and Orissa ISP land). 13.4% Non-Convertible
Debentures principal balance redeemable on annual basis
during financial Year 2017-18 (57.93%), FY 2018-19 (42.07%).
342.21 319.54 344.18

192 192 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
(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 principal balance of
loan is repayable in quarterly instalments during Financial
Year 2017-18 (47.89%),2018-19 (0.54%), 2019-20 (0.54%),
2020-21 (1.07%), 2021-22 (1.07%), 2022-23 (1.07%), 2023-
24 (1.07%), 2024-25 (2.69%), 2025-26 (3.22%), 2026-
27 (3.22%), 2027-28 (3.22%), 2028-29 (3.22%), 2029-30
(4.85%), 2030-31 (4.85%), 2031-32 (5.37%), 2032-33
(5.37%), 2033-34 (5.37%) & 2034-35 (5.37%),
(A) Loans carrying interest @Bank Base rate plus 3.75%. 4,972.41 4,620.26 4,540.03
(B) Loans carrying interest @ Bank Base Rate plus 4.25%. 449.36 397.44 506.37
Secured by pari passu first charge on movable fixed assets 580.54 581.22 540.47
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. Loans carrying interest
@6M Libor plus 4.30% p.a. The Principal balance of Loan will
be converted to Rupee Loan during Financial year 2017-18.
Secured by pari passu first charge on fixed assets (except 33.63 31.22 31.94
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.
Loans carrying interest @ Bank Base Rate plus 4.5 %. The
principal balance of loan is repayable in Financial Year
2017-18.
First pari passu charge on all present and future fixed assets 523.82 512.16 468.25
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 . Loans carrying interest @6M
Libor plus 5% p.a. The principal balance of loan is repayable
in half yearly installments during Financial Year 2019-20
(5%), 2020-21 (12.5%), 2021-22 (20.%), 2022-23 (25.%),
2023-24 (25.%) & 2024-25 (12.5%)
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) Loans carrying interest @6M Libor plus 4.80% p.a. 141.04 138.87 127.34
The principal balance of loan is repayable in half yearly
instalments during Financial Year 2017-18 (26.32%),
2018-19 (10.53%), 2019-20 (14.74%), 2020-21
(14.74%), 2021-22 (16.83%) and 2022-23 (16.84%).

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 193 193

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
b) Loans carrying interest @6M Libor plus 4.80% p.a. 429.69 417.64 382.35
The principal balance of loan is repayable in 13 half
yearly installments during Financial Year 2017-18
(15%), 2018-19 (15%), 2019-20 (20%), 2020-21 (25%)
and 2021-22 (25%).
(c) Loans carrying interest @6M Libor plus 5.00% p.a. 33.53 33.30 32.14
The principal balance of loan is repayable in during
Financial Year 2017-18.
(d) Loans carrying interest @6M Libor plus 5.00% p.a. 249.38 235.38 241.71
The principal balance of loan is repayable in annual
instalments during Financial Year 2017-18 (22.22%),
2018-19 (15.56%), 2019-20 (15.56%), 2020-21
(15.56%), 2021-22 (15.55%), 2022-23 (15.55%).
(e) Loans carrying interest @6M Libor plus 5.00% 1,106.78 1,045.43 1,015.40
p.a. The balance loan is repayable 10 half yearly
instalments during Financial Year 2017-18 (5%), 2018-
19 (12.50%), 2019-20 (20%), 2020-21 (25%), 2021-22
(25%), 2022-23 (12.50%).
(f) Loans carrying interest @6M Libor plus 5.00% p.a. 812.90 790.48 738.95
The principal balance of loan is repayable in annual
instalments during Financial Year, 2017-18 (26.32%),
2018-19 (14.74%), 2019-20 (14.74%), 2020-21
(14.74%), 2021-22 (14.73%), 2022-23 (14.73%).
g) Loans carrying interest @6M Libor plus 5.00% p.a. 148.85 154.15 140.80
The principal balance of loan is repayable in Financial
Year, 2017-18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22 (2.04%), 2022-23
(2.04%), 2023-24 (2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28 (6.11%), 2028-29
(6.11%), 2029-30 (9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34 (10.17%) and
2034-35 (10.17%)
h) Loans carrying interest @6M Libor plus 5.00% p.a. 93.54 97.32 96.41
The principal balance of loan is repayable in Financial
Year 2017-18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22 (2.04%), 2022-23
(2.04%), 2023-24 (2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28 (6.11%), 2028-29
(6.11%), 2029-30 (9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34 (10.17%) and
2034-35 (10.17%).
i) Loans carrying interest @6M Libor plus 4.75% p.a. 143.34 140.78 139.50
The principal balance of loan is repayable in Financial
Year 2017-18 (15.79%), 2018-19 (10.53%), 2019-
20 (14.74%), 2020-21 (14.74%), 2021-22 (14.74%),
2022-23 (14.73%) and 2023-24 (14.73%).
j) Loans carrying interest @6M Libor plus 5.00% p.a. 284.39 280.51 257.22
The principal balance of loan is repayable in Financial
Year 2017-18 (20%), 2018-19 (10%), 2019-20(14%),
2020-21 (14%), 2021-22 (14%), 2022-23 (14%), and
2023-24 (14%.)

194 194 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
k) Loans carrying interest @6M Libor plus 5.00% p.a. 98.49 98.11 89.99
The principal balance of loan is repayable in Financial
Year 2017-18.
(l) Loans carrying interest @Bank Base rate plus 3.75%. 520.18 531.86 529.54
The principal balance of loan is repayable in Financial
Year 2017-18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22 (2.04%), 2022-23
(2.04%), 2023-24 (2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28 (6.11%), 2028-29
(6.11%), 2029-30 (9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34 (10.17%) and
2034-35 (10.17%).
(m) Loans carrying interest @Bank Base rate plus 3.75%. 259.98 272.28 270.06
The principal balance of loan is repayable in Financial
Year 2017-18 (1.27%), 2018-19 (1.02%), 2019-20
(1.02%), 2020-21 (2.04%), 2021-22 (2.04%), 2022-23
(2.04%), 2023-24 (2.04%), 2024-25 (5.09%), 2025-26
(6.11%), 2026-27 (6.11%), 2027-28 (6.11%), 2028-29
(6.11%), 2029-30 (9.16%), 2030-31 (9.16%), 2031-32
(10.17%), 2032-33 (10.17%), 2033-34 (10.17%) and
2034-35 (10.17%).
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) Loans carrying interest @6M Libor plus 4.90% p.a. 587.10 577.87 542.83
The principal balance of loan is repayable in yearly
instalments during Financial Year 2017-18 (26.32%),
2018-19 (14.74%), 2019-20 (14.74%), 2020-21
(14.74%), 2021-22 (14.73%) and 2022-23 (14.73%).
b) Loans carrying interest @6M Libor plus 4.90% p.a. 326.74 327.44 307.65
The principal balance of loan is repayable in annual
instalments during Financial Year 2017-18 (13.40%),
2018-19 (10.31%), 2019-20 (17.53%),2020-21
(17.53%),2021-22 (20.61%) and 2022-23 (20.62%).
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. Principal balance of
Loan will be repaid during financial year 2017-18 (22.64%),
2018-19 (0.80%), 2019-20 (0.80%), 2020-21 (1.60%),
2021-22 (1.60%), 2022-23 (1.60%), 2023-24 (1.60%),
2024-25 (3.99%),2025-26 (4.78%),2026-27 (4.78%),2027-
28 (4.78%),2028-29 (4.78%),2029-30 (7.17%),2030-31
(7.18%),2031-32 (7.98%),2032-33 (7.98%),2033-34 (7.98%)
& 2034-35 (7.98%)
(A) Loans carrying interest @ Bank Base Rate plus 3%. 842.80 776.09 842.42
(B) Loans carrying interest @ Bank Base Rate plus 1.25%. 504.16 454.76 435.35

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 195 195

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
(C) Loans carrying interest @ Bank Base Rate plus 3.5%. 224.58 197.27 202.47
(D) Loans carrying interest @ Bank Base Rate plus 3.25%. 86.11 81.18 91.65
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. Principal balance of loan will be repaid in Quarterly
Installments during financial year 2017-18 (10.49%), 2018-
19 (11.06%), 2019-20 (20.93%), 2020-21 (21.10%), 2021-22
(20.85%), 2022-23 (15.57%).
(A) Loans carrying interest @ Bank Base Rate plus 2.50%. 3,033.63 2,833.04 2,767.84
(B) Loans carrying interest @ Bank Base Rate plus 2.00%. 277.47 252.67 255.00
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. Principal
balance of Loan will be repaid in Quarterly Installments
during financial year 2017-18 (7.70%), 2018-19 ( 12.90%),
2019-20 ( 12.90%) , 2020-21 (12.55%), 2021-22 (12.38%),
2022-23 ( 12.38%), 2023-24 (14.39%) 2024-25 (0.85%),
2025-26 (1.02%), 2026-27 (1.02%), 2027-28 ( 1.02%), 2028-
29 (1.02%), 2029-30 ( 1.53%), 2030-31 (1.54%), 2031-32
(1.70%), 2032-33 (1.70%), 2033-34 (1.70%) and 2034-35
(1.70%).
(A) Loans carrying interest @ Bank Base Rate plus 2.50%. 5,849.52 5,467.97 4,943.46
(B) Loans carrying interest @ Bank Base Rate plus 2.30%. 568.61 503.01 487.04
Secured by pari passu first charge on movable fixed assets 162.60 169.61 157.33
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. Loan carries
interest @ 6M LIBOR plus 6.25% p.a. Principal balance of
Loan will be repaid in Quarterly Installments during financial
year 2017-18 ( 7.50%), 2018-19 ( 15.00%), 2019-20 (
15.00%) , 2020-21 ( 15.00%), 2021-22 (15.00%), 2022-23 (
15.00%), 2023-24 ( 17.50%).
Loan carries interest @ Bank Base Rate. Secured by - - 12.97
subservient charge on moveable fixed assets and current
assets.The loan repaid during Financial Year 2015-16.

196 196 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
Secured by subservient charge on all moveable fixed assets - - 170.19
& current assets of the company, Corporate Guarantee of
Essar Steel Limited and pledge of certain shares held in the
company by its shareholders. Loan fully repaid in FY16
Secured by Pledge of Shares held in EPOL & BPOL held 47.20 54.29 139.64
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 carries Interest rate base rate plus 4.0%. Principal
Balance of Loan is due for repayment in Financial Year 2016-
17 .
Secured by pari passu first charge on movable fixed assets 735.51 735.02 682.27
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. Loan carries interest @ 6M LIBOR plus 4.80% p.a.
The Principal balance of loan is repayable in 12 half yearly
instalments of during financial year 2017-18 ( 25%), 2018-19
( 15.00%), 2019-20 ( 15.00%) , 2020-21 (20%) and 2021-22
(25.%).
Secured by pari passu first charge on entire fixed assets of the 176.48 159.01 -
company (except leasehold rights on the Visakhapatnam Port
Trust land and Orissa ISP land), Second pari passu charge
on entire present and future current assests of the company.
Loan carries Bank Interest rate base rate plus 4.75%. The
principal balance lof oan is repayable in Financial Year 2017-
18 (43.75%), 2018-19 (25.00%), 2019-20 (25.00%), 2020-21
(6.25%).
Secured by subservient charge on its fixed movable and - - 112.32
current assets of the Company. The loan carries interest
12.50% p.a. The loan is fully repaid during FY16.
Secured by subservient charge on its fixed movable and - - 64.26
current assets of the Company. Loan carries Interest rate
base rate plus 1.75%. The loan is fully repaid during FY16.
Secured by subservient charge on its movable fixed assets - - 195.74
and current assets of the company located at Hazira. The
loan carries interest 12.50% p.a. The loan is fully repaid
during FY16.
One of the Subsidiaries has taken loan from Bank which is - - 6.26
secured by unconditional and irrevocable standby letter of
credit (organised by the company)and margin deposits of the
said subsidiary
One of the Subsidiaries has taken loan from Bank which is 178.09 960.24 900.81
secured by unconditional and irrevocable standby letter of
credit (organised by the company)and margin deposits of the
said subsidiary

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 197 197

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
One of the Subsidiaries has taken loan from Bank which is - - 156.48
secured by unconditional and irrevocable standby letter of
credit (organised by the company)and margin deposits of the
said subsidiary
One of the Subsidiaries has taken loan for purpose of funding - 39.47 23.60
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
Secured by pledge of shares of Essar Offhsore Limited and 3,168.96 3,043.84 2,585.00
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 U.A. and corporate guarantees of the company
and its subsidiary companies, Essar Minerals Limited and
Essar Mineral Cooperatief U.A.
Secured by First lien on Financed Mining Equipments 50.36 68.70 64.82
purchased by one of its Subsidiary, New Trinity Holding LLC
27,701.75 27,079.87 26,295.86
(3) Buyers Credit Capital Expenditure
Secured by pari passu first charge on movable fixed assets - - 51.12
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 converted into
long term loans on maturity.
- - 51.12
(4) Dollar Notes / Rupee Notes
Rupee Notes principal balance is repayable up to 31st March, 218.13 230.72 227.49
2018 carry interest @ 8% p.a. payable semi-annually. Dollar
Notes is repayable on 31st March , 2018 carry interest @
0.25% p.a. payable semi-annually.
(5) Payment of the Deferred Sales Tax Benefit shall be made 31.74 33.32 33.32
during financial year 2017-18 (10.41%), 2018-19 (16.47%),
2019-20 (21.04%), 2020-21 (21.04%), 2021-22 (15.83%),
2022-23 (10.64%), 2023-24 ( 4.57%)for each year’s collection
(i.e. collection from 2005-06 to 2008-09) starting from April,
2017.
(6) The Company has issued 4,35,98,951 10% Cumulative 67.55 61.14 55.35
Redeemable Preference Shares (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.

198 198 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
Current Borrowings
From Banks
Loan carries interest @ Bank Base Rate plus 4.75% p.a. Secured by 118.03 101.55 100.00
subservient charge on all fixed assets of the company. The principal
balance of Loan is due for repayment during 2015-16
One of the Subsidiaries has taken loan, secured, on a pari-passu 80.77 - -
basis among the lenders, with its trade receivable, inventories,
property, plant and equipment, pledge of the its share and insurance
claim proceeds
From Others
One of the Subsidiaries has taken loan, secured by way of 5.81 5.00 -
hypothecation of its receivables, book debts, operating cash flows,
etc.
204.61 106.55 100.00
Other Current Financial Liabilities :
(1) Invoked Advance against Export Performance Bank
Guarantee
(a) Secured by pari passu first charge on movable 7,056.88 6,377.72 -
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.
(b) Secured by pari passu first charge on movable 617.40 592.33 -
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.

7,674.28 6,970.05 -
(2) Invoked Standby Letter of Credit
Secured by pari passu first charge on all present and future 316.03 - -
fixed assets of the Company including all the land of Company
(except leasehold rights on the Vishakhapatnam Port Trust
land and Orissa ISP land)
Secured by pari passu first charge on all present and 143.63 - -
future fixed assets of the Company including all the land of
Company (except leasehold rights on the Vishakhapatnam
Port Trust land and Orissa ISP land) also secured by second
pari passu charge on the present and future current assets of
the Company
459.66 - -

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 199 199

 Essar Steel India Limited

Notes to Consolidated Financial Statements for the year ended 31st March, 2017
As at As at As at
31st March, 31st March, 1st April,
2017 2016 2015
` in Crores ` in Crores ` in Crores
(3) Advance against Export Performance Bank Guarantee
Secured by pari passu first charge on movable fixed assets 911.51 967.85 -
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.
(4) Working Capital Loans - From Banks
Working Capital Loans are secured by pari passu first charge 8,764.82 5,597.29 2,026.02
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),
Corporate Guarantee of Essar Investments Limited and
Personal guarantee of Promoters upto Rs 1120Crs
8,764.82 5,597.29 2,026.02
(5) Buyers’ credit for Operational Expenditure and
acceptance under Letter of credit
Secured by margin deposits with the banks & secured by 740.15 2,509.69 4,028.54
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), Corporate Guarantee
of Essar Investments Limited and Personal guarantee of
Promoters upto Rs 1120Crs
740.15 2,509.69 4,028.54

67 The figures of the previous year has been regrouped where necessary to conform to current year’s classification.

For and on behalf of the Board of Directors of Essar Steel India Limited
Dilip Oommen Rajiv Kumar Bhatnagar
Managing Director & Dy. CEO Director (Projects)

Suresh Jain Pankaj S Chourasia

Chief Financial Officer Company Secretary

Mumbai, 25th November, 2017

200 200 41 st A N N U A L R E P ORT 2016-17

 Essar Steel India Limited

REPORT OF RESOLUTION PROFESSIONAL

The members are informed that pursuant to the order of the Hon’ble National Company Law Tribunal – Ahmedabad Bench
dated 02nd August, 2017 (“NCLT Order”), corporate insolvency resolution process (“CIR Process”) has been initiated for
the Company in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 and the related rules and
regulations issued thereunder (“Code”) with effect from 02nd August, 2017.

I, Satish Kumar Gupta, was appointed as Interim Resolution Professional in terms of the NCLT Order and, subsequently, I
was appointed as Resolution Professional by the Committee of Creditors in its meeting held on 01st September, 2017 as per
the provisions of the Code (“Resolution Professional”).

These consolidated audited financial results have been prepared by the management of the Company and certified by
Shri Dilip Oommen, Managing Director & Dy. CEO, Shri Rajiv Kumar Bhatnagar, Director (Projects), Shri Suresh Jain,
Chief Financial Officer and Shri Pankaj S Chourasia, Company Secretary. The Resolution Professional has relied upon the
certifications, representations and statements made by management while reviewing the consolidated financial results.

The management of the Company has further represented to the Resolution Professional that post approval of Standalone
Financial Accounts for the year ended 31st March, 2017 by the Board of Directors on 01st August, 2017, the Auditors have
pointed a typographical error of omission of Essar Shipping DMCC and Essar Steel Jharkhand Limited as related parties in
Note 52(c) to the Notes to Standalone Financial Accounts for the year ended 31st March, 2017. Accordingly, the said Note
52(c) to Standalone Financial Accounts for the year ended 31st March, 2017 should be read with inclusion of above two
entities as related parties.

The Resolution Professional has, however, not authenticated the correctness of enclosed consolidated annual financial
statements comprising of Balance Sheet as at 31st March, 2017, the Profit & Loss Statements and the Cash Flow Statement
of the Company for any purpose whatsoever including but not limited to the Companies Act, 2013 specially when they belong
to the period before initiation of CIR Process.

It may be noted that under the CIR Process initiated on 02nd August, 2017 pursuant to which the claims have been invited
from creditors of the Company (financial and operational) and the same are currently in the process of being reviewed.
Impact of admission of such claims has not been considered in these financial statements.

Date: 25th November, 2017

Place: Mumbai
Satish Kumar Gupta
Resolution Professional
IP Regn. No. IBBI/IPA-001/IP-P00023/2016-17/10056

41 s t AN NUA L RE P O RT 2 0 1 6 -1 7 201 201

 ESSAR STEEL INDIA LIMITED STEEL


Registered Office: 27th KM, Surat Hazira Road, Hazira, Dist. Surat, Pin-394270, Gujarat
CIN: U27100GJ1976FLC013787
Attendance Slip

Folio No. / DP ID No. & Client ID No.*

No. of Equity Shares held

I hereby record my presence at the 41st Annual General Meeting of ESSAR STEEL INDIA LIMITED being held at Utsav Community Hall,
Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-394270 on Wednesday, December 27, 2017 at 2:00 p.m.

Name of Shareholder
(In Block Letters)

Name of the Proxy holder /

Authorised Representative**

* Applicable for investors holding shares in Electronic Mode

** Strike out whichever is not applicable

Signature of the Shareholder/Proxy/Authorised Representative

NOTE:

1. A member / proxy / authorised representative wishing to attend the Meeting must complete this Admission Slip before coming to the
Meeting and hand it over at the entrance.

2. If you intend to appoint a proxy, please complete, stamp, sign and deposit the Proxy Form given below at the Company’s Registered
Office at least 48 hours before the Meeting.

 ESSAR STEEL INDIA LIMITED
STEEL


Registered Office: 27th KM, Surat Hazira Road, Hazira, Dist. Surat, Pin-394270, Gujarat
Tel. : 0261-668 2400 Fax : 0261-668 5731 email : estlinvestors@essar.com
CIN: U27100GJ1976FLC013787

PROXY FORM
(Form MGT. 11)
[Pursuant to Section 105(6) of the Companies Act, 2013 and
Rule 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 No.

I / We, being the member(s) of ________________________________ 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……………............……...................…............…………..
as my/our Proxy in my/our absence to attend and vote for me/us and on my/our behalf at the 41st Annual General Meeting of ESSAR STEEL
INDIA LIMITED to be held on Wednesday, December 27, 2017 at 2:00 pm. and at any adjournment thereof in respect of such resolutions as
are indicated below.

Vote (Optional See note 2)

Type of
Item No. Particulars
Resolution
For Against Abstain

1 Adoption of Financial Statements for FY 2016-17. Ordinary

2 Re-appointment of Shri P S Ruia (DIN 01187548) as Director. Ordinary

3 Re-appointment of Shri Parveen Kumar Malhotra (DIN 03494232) as Ordinary

Director.

4 Re-appointment of Statutory Auditors. Ordinary

5 Re-appointment of Shri Dilip Oommen (DIN: 02285794) as Managing Special

Director & Dy. CEO of the Company.

6 To ratify the remuneration of the Cost Auditors for the financial year Ordinary
ending 31st March, 2018.

Signed this …………………………… day of …………………......…… 2017.

Signature
Affix
Revenue
Stamp
Signature of the Shareholder ……………………………………………………

Signature of the Proxy Holder(s) .................................................... .................................................... ....................................................

* Strike out whichever is not applicable.

Note: The proxy, in order to be effective, should be duly completed, stamped, signed and must be deposited at the Registered Office of the
Company not less than 48 hours before the time fixed for the Meeting.
 ESSAR STEEL INDIA LIMITED
41st Annual General Meeting Venue - Route Map

Utsav Community Hall, Nandniketan Township, Hazira, Dist.: Surat, Gujarat, Pin-394270
Notes