The Supreme Court on the of January 17th, 2012 ruled in the matter regarding the applicability of a sales tax deferment scheme offered by the state of Gujarat where in they have set aside the judgement of the High Court which ruled in favour of Essar Oil to avail benefits under the sales tax deferment scheme. However, it needs to be clarified that the scheme was not for sales tax exemption but was only for a deferment of payment of Sales tax.

Essar Oil would like to further clarify the following:

1. The sales tax deferment benefit to Essar Oil was a loan repayable on the earlier of 2021/22 or on exhaustion of the full eligible amount (which the company expects to be FY 2013-14) in six equal annual installments

2. The quantum of the sales tax deferment benefit as per the Company’s estimate is INR 9,100 crore

3. Against this Essar Oil has utilised approximately INR 6,300 croreas benefit under the sales tax deferment scheme

4. Following the Supreme Court order, any repayment schedule is expected to be discussed and finalisedwith the State Government of Gujarat and /or Court

5. The sales tax deferment liability has been assigned. As of December 31st 2011, the amount assigned is INR 1,800 crore. This amount is repayable in accordance with the terms of the agreement

Exiting the Corporate Debt Restructuring scheme
1. Essar Oil is already in discussion with CDR lenders for exiting the CDR. This process of exiting CDR is expected to be completed shortly.

2. As regards the Master Restructuring Agreement, Essar Oil is required to obtain approval of the deferment of the sales tax by March 31st, 2012 and repay the same as per the incentive scheme

3. Till date the company has already availed INR 6,308 crore till December 31st 2011

4. Essar Oil is examining all legal options and it expects to file a review petition in the Supreme Court

5. We are discussing the developments with the lenders to the company and there is no Event of Default under the financing agreements