MANAGING DIRECTOR'S STATEMENT

Dear Members

For and on behalf of the Board of Directors I am pleased to present the Annual Reportof Essar Ports Limited ('the Company') for the year ended March 31 2017. The AnnualReport comprises the IndAS Standalone Financial Statements and the IndAS ConsolidatedFinancial Statements for the year ended March 31 2017.

During the year your Company reported a Standalone Net Loss of Rs. 4106.30 lakhs ascompared to Rs. 15095.89 lakhs during the previous year. The Company has during thefinancial year 16-17 completed implementation of a Composite Scheme of Arrangement("Scheme") which has been approved by the Honorable High Court of Gujarat videorder dated 1 July 2016. The Scheme was implemented in phases with effect from 30 June 1July and 2 July 2016 (the appointed dates) after obtaining necessary approvals and filingof the Scheme with the Ministry of Corporate

Affairs on 26 August 2016. The restructuring of the business and holding structure asper the Scheme will help improve the financial flexibility and consolidation of thebusiness of its various identified companies and is a key step in order to create valuefor the stakeholders.

Keeping in view of the Company's future funding needs and the applicable laws theBoard of Directors have not recommended any dividend in this financial year.

Indian Government has emphasized on the infrastructure growth to build a robusteconomy. Creation of a world-class port facilities is an important factor for thecountry's sustained growth. Port Infrastructure sector in India looks well placed toattract investments and experience high growth. Infrastructure sector is core to theIndian growth story due to massive historic shortfall in physical infrastructure andgrowing economic activity. The sector is expected to be resilient and continue to attractinvestor interest. Based on this your Company sees good potential in the growth of portsbusiness.

The Company's subsidiary Essar Vizag Terminals Limited ("EVTL") handled 8.4MMT during FY 2016-17 as against 5.1 MMT of cargo during FY 2015-16. The project is beingsimultaneously being modernized to improve the handling at the port and the modernizationproject is expected to be completed soon.

On behalf of the Board of Directors of your Company I take this opportunity to expressour sincere gratitude to all our stakeholders for their continuous support dedication andcommitment.

Best Wishes

Rajiv Agarwal

Managing Director