CONTENTS Proxy Form 65

ParticularsYear Ended31st March, 2008Period Ended31st March, 2007Number of Equityshares at the end ofthe year Nos. 50,000 50,000Weighted AverageNumber of equityshares for thepurpose of calculatingbasic earnings perequity share Nos. 50,000 50,000Weighted AverageNumber of equityshares for thepurpose of calculatingdiluted earnings perequity share Nos. 9,080,378 -Earnings Per EquityShare of Rs. 10each – Basic Rs. (113.13) (5.85)Earnings Per EquityShare of Rs. 10each –Diluted Rs. (0.62) (5.85)J. Supplementary statutory information:-(a)(b)Expenditure in Foreign Currency (Accrual basis):-ParticularsYear Ended31st March,2008(In Rs.)Period Ended31st March,2007(In Rs.)Expenditure in foreign currency (Accrual Basis)Testing Expenses - 1,086,690Foreign Bank Charges 4,070,575 -Discounting Charges 3,336,968 -Interest 125,417 -Total 7,532,960 1,086,690Value of Imports calculated on C&F basis:-ParticularsAmountCapital Work in Progress 274,697,826Total 274,697,826K. Disclosure pursuant to Accounting Standard – 15 (Revised) –‘Employee Benefits’:a) Effective January 1, 2007, the Company adopted AccountingStandard – 15 (Revised 2005) on “Employee Benefits”issued by ICAI.b) The Company has classified various employee benefits asunderA) Defined Contribution PlansThe Company has recognised Rs. 375,566 inthe Preoperative Expenses for the year towardscontribution to Employees’ Provident Fund.B) Defined Benefit PlanThe Company operates Gratuity Plans wherein everyemployee is entitled to the benefit equivalent to fifteendays salary, last drawn for each completed year ofservice depending on the date of joining and eligibilityterms upto maximum limit of Rs. 350,000.The same is payable on the termination of service orretirement whichever is earlier. The benefit vests afterfive years of continuous service. However, this doesn’tapply in the case of death of an individual.The following table summaries the components ofnet benefit expenses recognised in the Pre Operativeexpenses and amounts recognized in the BalanceSheet for the Gratuity.Valuation in respect of Gratuity have been carried outby an independent actuary, as at the Balance Sheetdate, based on the following assumptions:-1. Actuarial assumptions for the year:Discount Rate 8.00%Rate of Increase in Compensation Levels 7.50%Rate of Return on Plan AssetsN.A.Mortality LIC (1994-96)The estimates of future salary increases, considered inactuarial valuation, take account of inflation, seniority,promotion and other relevant factors, such as supply anddemand in the employment market.The current year being the first year of adoption of AS 15(revised) by the Company, the previous year comparativeinformation is not available and hence not furnished2. Change in Benefit Obligation:(In Rs.)Liability at the beginning of the period 117,787Interest Cost 9,449Service Cost 166,888Benefits paid NilActuarial (gain) loss on obligations (114,390)Liability at the end of the year 179,7343. The Amounts to be recognized in the Balance Sheet:Present Value of Obligation 179,734Fair value of Plan AssetsNilFunded Status (179,734)Unrecognised Actuarial gains (losses) NilLiability Recognised in Balance Sheet (179,734)4. Net Periodic Cost (included in Pre-operative expenses ReferSchedule III):Current Service Cost 166,888Interest Cost 9,449Expected Return on Plan AssetsNilNet Actuarial (gain) loss recognised in (114,390)the yearExpenses Recognised in the Income 61,947StatementL. Legal & Professional Fees:-Legal & Professional fees comprises of Auditor’s Remunerationwhich consist off the Statutory Audit fees*ParticularsYear ended31st March, 2008(Rs.)Period ended31st March, 2007(Rs.)Statutory Audit Fees* 100,000 100,000Out of PocketExpenses12,672 -Total 112,672 100,000*exclusive of service tax.M. Previous year’s figures have been regrouped where necessaryto conform to this year’s classification.As per our report of even dateS.R. Batliboi & Co.For and on behalf of Board of DirectorsChartered Accountants Essar Steel Orissa Limitedper Hemal Shah V.G. Raghavan Manish KediaPartner Director DirectorMembership No. 42650Place : MumbaiPlace : MumbaiDate: August 27, 2008 Date: August 27, 200855