CONTENTS Proxy Form 65

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Essar Steel Trading FZECash Flow Statement for the year ended 31 March, 2008 1 April 2007 14 June 2006toto31 March 2008 31 March 2007OPERATING ACTIVITIES Notes USD USDProfit (Loss) for the year/period 1,851,197 (157,936)Adjustments for:Interest expense 4 2,946,394 342,155Interest income 3 (1,265) (284)4,796,326 183,935Working capital changesAccounts receivable and prepayments (49,895,726) (465,130)Due from a related party (80,787,513) (25,518,836)Accounts payable and accruals 936,039 345,580Cash used in operations (124,950,874) (25,454,451)Interest paid 4 (2,946,394) (342,155)Net cash used in operating activities (127,897,268) (25,796,606)INVESTING ACTIVITYInterest received 1,265 284Net cash from investing activity 3 1,265 284FINANCING ACTIVITIESProposed increase in share capital 8 1,000,000 816,727Term loans 130,000,000 25,000,000Net cash from financing activities 131,000,000 25,816,727INCREASE IN CASH AND CASH EQUIVALENTS 3,103,997 —Cash and cash equivalents at 1 April 20,405 —CASH AND CASH EQUIVALENTS AT 31 MARCH 7 3,124,402 20,405Statement of Changes In EquityRetained earnings/Year ended 31 March, 2008 Share (accumulatedcapital losses) TotalNote USD USD USDIssued during the period 816,727 — 816,727Loss for the period — (157,936) (157,936)Balance at 31 March 2007 816,727 (157,936) 658,791Proposed increase in share capital 8 1,000,000 — 1,000,000Profit for the year — 1,851,197 1,851,197Balance at 31 March 2008 1,816,727 1,693,261 3,509,988The attached notes 1 to 14 form part of these Financial Statements.60
NOTES TO THE FINANCIAL STATEMENTSAt 31st March 20081 ACTIVITIESEssar Steel Trading FZE (the “Establishment”) was incorporated asa Free Zone Establishment with limited liability on 14 June 2006 inthe Dubai Airport Free Zone pursuant to Law No. (2) of 1996 andits amendment No. (2) of 2000 issued by Dubai Airport Free ZoneAuthority. The business address of the Establishment is P O Box61078, Dubai, United Arab Emirates.The Establishment is engaged in the activity of trading in steel andconstruction materials.The Establishment is a wholly owned subsidiary of EssarSteel Limited, a company registered in India, which exercisesmanagement control over the operating and financing decisions ofthe Establishment.2 SIGNIFICANT ACCOUNTING POLICIESBasis of preparationThe financial statements have been prepared in accordancewith International Financial Reporting Standards and applicablerequirements of United Arab Emirates law.The financial statements have been prepared in United StatesDollars, being the functional currency of the Establishment.The financial statements have been prepared under the historicalcost convention.Changes in accounting policiesThe accounting policies are consistent with those used in theprevious year except as follows:The Establishment has adopted the following new and amendedIFRS and IFRIC interpretations during the year. Adoption of theserevised standards and interpretation did not have any effect on thefinancial performance or position of the Establishment. They didhowever give rise to additional disclosures:• IFRS 7 Financial Instruments: Disclosures• IAS 1 Amendment - Presentation of financial statementsIFRS 7 Financial Instruments DisclosuresThis standard requires disclosures that enable users of the financialstatements to evaluate the significance of the Establishment’sfinancial instruments and the nature and extent of risks arising outof those financial instruments. The new disclosures are includedthroughout the financial statements.IAS 1 – Amendment - Presentation of financial statementsThis amendment requires the Establishment to make newdisclosures to enable users of the financial statements to evaluatethe Establishment’s objectives, policies and processes for managingcapital. These new disclosures are shown in Note 12.IASB Standards and Interpretation issued but not adoptedThe Establishment has not adopted the new accounting standardsor interpretations that have been issued but are not yet effective.These standards and interpretations, except for revised IAS 1 arenot likely to have any significant impact on the financial statementsof the Establishment in the period of their initial application.The Establishment has not adopted the revised IAS 1 “Presentationof Financial Statements” which will be effective for the year ending31st March 2009. The application of this standard will result inamendments to the presentation of the financial statements.Revenue recognitionRevenue from sales of goods is recognised when the significantrisks and rewards of ownership of the goods have passed to thebuyer and the amount of revenue can be measured reliably.Interest revenue is recognised as the interest accrues usingthe effective interest method, under which the rate used exactlydiscounts estimated future cash receipts through the expected lifeof the financial asset to the net carrying amount of the financialasset.Commission income is accounted for on an accruals basis.Impairments of financial assetsAn assessment is made at each balance sheet date to determinewhether there is objective evidence that a specific financial assetmay be impaired. If such evidence exists, any impairment loss isrecognised in the income statement. Impairment is determined asfollows:(a) For assets carried at fair value, impairment is the differencebetween cost and fair value, less any impairment loss previouslyrecognised in the income statement;(b) For assets carried at cost, impairment is the difference betweencarrying value and the present value of future cash flowsdiscounted at the current market rate of return for a similarfinancial asset;(c) For assets carried at amortised cost, impairment is thedifference between carrying amount and the present value offuture cash flows discounted at the original effective interestrate.Accounts receivableTrade receivables are stated at original invoice amount less aprovision for any uncollectible amounts. An estimate for doubtfulaccounts is made when collection of the full amount is no longerprobable. Bad debts are written off when there is no possibility ofrecovery.Cash and cash equivalentsFor the purpose of the Statement of Cash Flows, cash and cashequivalents consist of cash in hand, bank balances, and short-termdeposits with an original maturity of three months or less, net ofoutstanding bank overdrafts.Accounts payable and accrualsLiabilities are recognised for amounts to be paid in the future forgoods or services received, whether billed by the supplier or not.ProvisionsProvisions are recognised when the Establishment has an obligation(legal or constructive) arising from a past event, and the coststo settle the obligation are both probable and able to be reliablymeasured.Term loansTerm loans are recognised at the fair value of the proceeds received,net of transaction costs incurred. Term loans are subsequentlystated at amortised cost using the effective yield method. Thedifference between proceeds (net of transaction costs) and theredemption value is recognised in the income statement over theperiod of the loan.61
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BOARD OF DIRECTORSShashi RuiaRavi R
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Sales and Marketing Sales of flat r
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Annexure - ‘A’ to Directors’
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FORM BRESEARCH AND DEVELOPMENT (R &
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Auditors’ Report to the Members o
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Page 19 and 20: Essar Steel LimitedSchedules formin
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Page 23 and 24: Essar Steel LimitedSchedule forming
Page 25 and 26: Essar Steel LimitedShort term compe
Page 27 and 28: Essar Steel Limited4 Essar Steel (H
Page 29 and 30: Essar Steel LimitedRs. CroresThe As
Page 31 and 32: Essar Steel Limited9. Earnings per
Page 33 and 34: Essar Steel Limited15. Consumption
Page 35 and 36: Essar Steel LimitedAs at31st March
Page 37 and 38: Essar Steel Limited(ii)Provision fo
Page 39 and 40: Essar Steel LimitedCash Flow Statem
Page 41 and 42: Essar Steel Jharkhand LimitedFormer
Page 49 and 50: Essar Steel Orissa LimitedToThe Mem
Page 51 and 52: Balance Sheet as at 31st March, 200
Page 53 and 54: As at31st March, 2008As at31st Marc
Page 55 and 56: are consistent with the currency an
Page 57 and 58: ParticularsYear Ended31st March, 20
Page 59 and 60: Cash Flow Statement for the period
Page 61: Income Statement for the year ended
Page 65 and 66: equirements. The facility is repaya
Page 67: ESSAR STEEL LIMITEDRegd. Office: Po
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CONTENTS Proxy Form 65

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