Essar Shipping Ltd

To the Members of Essar Shipping Limited

Your Directors are pleased to present the Fifteenth Annual Report and Audited Financial Statements of the Company for the financial year ended March 31, 2025.

FINANCIAL HIGHLIGHTS:

The Company?s financial performance, for the year ended March 31, 2025 is summarized below: -

PERFORMANCE REVIEW:

The Key Highlights of the Company?s performance (Standalone) for the year ended March 31, 2025 are as under:

1. Net Revenue from operations recorded at Rs. 20.50 Crore as against revenue of Rs. 15.76 Crore in the previous financial year.

2. Net Profit recorded atRs. 370.95 Crore as against last year?s Net loss of Rs. 70.76 Crore The management is optimistic for its future performance and will endeavors all its efforts to keep the organization as profitable concern.

DIVIDEND

In view of accumulated losses from the previous financial years and with a view to conserve the resources, your Board of Directors have not recommended any dividend for the year ended 31st March, 2025.

CHANGE IN THE NATURE OF BUSINESS ACTIVITIES:

During the year under review, there was no change in the nature of the business activities of the Company.

AMOUNT TRANSFERRED TO RESERVE:

The Company has not transferred any amount to any Statutory or general reserves during the Financial Year ended 2024-25.

MATERIAL CHANGES AND COMMITTEMENTS

No material changes and commitments, affecting the financial position of the Company, have occurred between the end of the financial year of the Company and the date of this Report.

A. GLOBAL INDUSTRY OUTLOOK

Oil Industry is one of the largest industry across the world. All major economies are highly dependent on oil industry for energy needs. The global supply/demand is going to see only a marginal increase in coming years as the shift to green energy has been gaining pace among high oil demanding nation. The industry has seen lesser activity as the oil prices has been less volatile in last few years. IEA estimates lowered growth estimates for demand increase of 2.5 mb/d till 2030 to reach 105.5 mb/d and supply too have seen lowered estimates with expected raise by 5.1 mb/d to 114.7 mb/d by 2030. In most of the countries national oil companies are the major player and they contribute significantly in their domestic industries. The industry can be broken down into three key areas:

- Upstream;

- Midstream; and

-* Downstream

The largest volumes of products of the Oil and Gas industry are fuel oil and gasoline (petrol). Petroleum is the primary material for a multitude of chemical products, including pharmaceuticals, fertilizers, solvents and plastics. Petroleum is therefore integral to many industries, and is of critical importance to many nations as the foundation of their industries.

As of July 28, 2025, WTI crude oil is trading around $65/ bbl, with the average for Q2 2025 at approximately $64.78 and June 2025 around $68.17. The stabilization of prices over last few quarters with on-going geopolitical volatility attributed to global economic uncertainties, shifts in trade dynamics, and change in axis of oil supplier. While prices had exceeded $70 in 2024 and early 2025, they have softened slightly in mid-2025 compared to the previous year.

This recovery and sustained price level have resulted from a few key factors:

- OPEC+ production restraint:

The production agreement between OPEC and non-OPEC countries remains in force, with significant group-wide output cuts extended through the end of 2025 to support market stability.

- Phased voluntary cuts:

OPEC+ decided to gradually phase out additional voluntary cuts starting in April 2025, in response to market fundamentals and oil as they inventories, allowing for increased flexibility monitor and respond to evolving market conditions.

- Global supply and demand balancing:

Although non-OPEC+ producers are increasing supply, the overall consensus among major exporters remains focused on managing output to avoid oversupply and support prices.

- Rig Market Conditions:

Rig Market Conditions for semi-submersibles have shown mixed signals in 2024-25: While demand has remained relatively stable, contracting activity has experienced a notable slowdown with just a handful of new dayrates recorded since January 2024. The market has been characterized by increased attrition of older units, with seven vintage semi-submersibles removed from the active fleet during 2024 (average age 43.6 years), followed by three additional retirements in early 2025 with a much lower average age of 13.3 years. This trend reflects market adjustments to lower demand expectations continuing into 2025 and early 2026.

- Rig Demand:

Rig Demand for semi-submersibles has faced headwinds in 2024-25: Global committed marketed utilisation decreased by 3 percentage points to 78% at the end of 1Q 2025 versus the previous quarter, primarily driven by reduced contracting activity. The slowdown in semi-sub award activity has been evident throughout the year, with only nine fixtures made during 1Q 2025, adding six years of semi-sub work backlog. Regional demand patterns show Norway maintaining strong performance with 65% of new awards, while other regions including Australia, Egypt, the UK, US and Trinidad and Tobago account for the remainder.

- Global Rig Deployment:

Global Rig Deployment for semi-submersibles has remained relatively stable but with regional variations: The global marketed semi-sub supply stood at 76 units at the end of March 2025, unchanged from the previous quarter. The North Sea semi-sub segment closed 1Q 2025 with marketed committed utilisation at 81%, representing a two-percentage point decrease compared to the previous quarter. In Southeast Asia and Australia, nine semi-submersibles were operating at the end of 1Q 2025, with committed marketed utilisation at 63.1%, showing six out of nine available units committed for work.

- Rig Availability:

Rig Availability has been impacted by strategic fleet management decisions: The active fleet has been reduced through increased scrapping of vintage units, with market reports indicating a noticeable increase in attrition of older semi-submersibles. The retirement of units has been accelerated in response to lower demand in 2024, with the trend expected to continue into 2025 and early 2026. This strategic reduction in supply through scrapping has helped maintain utilisation levels despite softer demand conditions, particularly as North Sea demand has dwindled.

- Rig Dayrates:

Rig Dayrates have shown regional disparities with Norway leading premium pricing: Norway continues to command consistently high and continually increasing dayrates, with the average for the second half of 2024 reaching $443,000, supported by technologically advanced harsh-environment semi-submersibles (mostly 6th generation harsh-environment units). West African average dayrates remained strong at $415,000 in H2 2024, though based on limited activity with just one fixture. South

America recorded two new mutually agreed dayrate fixtures during the period - a 400-day Brazilian fixture at $325,000 and a 200-day fixture off Suriname. However, the UK recorded no new fixtures during the second half of 2024, with demand remaining sluggish, reflecting the challengingmarketconditionsincertain capacity will increase by 2.36% to 108.3 regions.

- Summary:

The semi-submersible offshore drilling rig market in FY 2024–2025 has been characterized by regional concentration of demand, limited contract awards, and accelerated fleet attrition. While dayrates remain strong in premium markets like Norway, overall global utilization has declined, reflecting a slowdown in contracting activity and ongoing fleet rationalization.

The outlook remains cautiously optimistic, supported by harsh-environment and deepwater project development, but near-term challenges around limited new work and competitive pricing pressures persist.

C. ROAD AHEAD

Rapid economic growth among emerging nations is leading growth in excess demand, while major economies had curtailed oil demand growth. The crude oil consumptions revised estimates were lowered for FY 26 by IEA and other major oil observer citing increased production paired with lowered demand projection. In April, J.P. Morgan Research lowered its Brent price forecast to $66/bbl for 2025 and $58/ bbl for 2026, indicating persistent weaker demand in spite of major oil policy changes. The supply pressure is further to be accentuated by Saudi Arabia decisions to utilize their

OPEC+ supply quota in response of growing market share of US WTI crude. The major increase in oil production will be observed by non-American OECD nations.

In terms of barrels, IEA forecasts India?s oil consumption to rise by 1 mb/d in FY24-30 period which is half of the total increase in demand by Asian economies. The annual CAGR is set to be 2.8% reaching 6.7 mb/d in 2030 from 5.8 mb/d in 2025.

The Indian oil constituents? growth is dependent on multiple oil products; Gasoline and diesel will lead the surge, growing at 4.0% and 3.3% CAGR respectively, while jet fuel demand rebounds post-covid crash at 5.6% amid expanding air travel. LPG consumption grows moderately, reflecting continued household and petrochemical use. In contrast, demand for naphtha, residual fuel oil, and other products remains flat, signaling a gradual shift away from industrial and heavy fuel reliance. The country?s energy profile continues to evolve alongside economic growth and mobility trends.

Natural Gas consumption is forecast to increase at a CAGR of 12.2% to 550 MCMPD by 2030 from 174 MCMPD in 2021.

India is looking to aggressively increase the total capacity of domestic refinery and throughput ratios. The IEA estimates, the total capacity of refinery in 2024 was 5.8mb/d which will grow by 17.24% to 6.8 mb/d. The comparative global refinancing in 2030.

Energy demand of India is anticipated to grow faster than energy demand of all major economies globally on the back of high capital investment through FPIs and public investment fueling domestic demand.

As per PIB reports, the country?s share in global primary energy consumption is projected to double by 2035. Our current global share is 6% which is set to be contributing to 12% in 2035. Currently, we are capturing 25% of the newly created oil consumption demand along the rapid expansion of renewables capacity in last 10 years.

Overview of the World Economy & Shipping Industry

Global maritime trade outperformed expectations in 2023 due to easing pressures on the global economy and better-than-expected economic performance in large economies.

Global maritime trade in terms of ton-miles is estimated to have grown by 4.2 per cent in 2023—faster than trade in tons—due to shifts in trade patterns from the ongoing impacts of the war in Ukraine, the disruptions in the Red

Sea and reduced water levels in the Panama Canal, all of which extended ship journeys and distances. These shifting trade patterns remain in focus.

UNCTAD forecasts maritime trade volume to expand by

2 per cent in 2024 driven by increased demand for major bulks such as bauxite, coal, containerized goods, grain, iron ore and oil. However, geopolitical tensions and the growing severity and frequency of extreme weather events add to the underlying threats and vulnerabilities that could persist into 2025 and beyond.

Developments in the global shipping fleet

In 2023, fleet capacity grew faster than maritime trade volumes; longer routes helped absorb surplus capacity. At the start of 2024, the global fleet was made up of around

109,000 vessels . Fleet growth was uneven in 2023 with container ship capacity jumping by nearly 8 per cent and that of liquefied gas carriers growing by 6.4 per cent. Tanker growth remained low, expanding by less than 2 per cent. The world?s total fleet capacity reached about 2.4 billion dead weight tons, with bulkers making up 42.7 per cent and oil tankers 28.3 per cent of the total.

Fleet capacity growth is projected to grow at a similar rate in 2024 (by 3.4 per cent) and decelerate to 2.7 per cent in 2025 (Clarksons Research, 2024b). This slowdown reinforces the trend of recent years while also reflecting a low order book, long lead times at shipyards, higher newbuilding prices, and a strong secondhand market. In

2023 and the first half of 2024, the supply of ship capacity and vessel utilization were shaped by system inefficiencies and new opportunities to deploy fleet capacity arising from ongoing supply chain disruptions and rerouting.

An example is the use of "shadow" fleets (particularly in tankers) amplified by the continued war in Ukraine and reinforced by latest disruptions. This trend has extended the service life for existing ships, boosted ship sales and purchases, increased second-hand prices, slashed ship demolition levels and motivated some investments in new built vessels. In 2023, China, the Republic of Korea and

Japan continued to dominate the shipbuilding market with these three countries accounting for about 95 per cent of the global output. This was the first time that China delivered more than 50 per cent of the world?s new ship capacity. The Republic of Korea contributed 28.2 per cent and Japan contributed 14.9 per cent. At the start of 2024, the global ship order book represented 12 per cent of dead weight tonnage, totaling 4,870 vessels and 283 million tons. transformations, particularly

In terms of value, the order book reached 405.5 billion in

June 2024, marking a 20.7 per cent increase from the same period in 2023. LNG carriers averaged 27 per cent of fleet capacity in 2022, nearly 50 per cent in 2023 and over 51 per cent in the first quarter of 2024.

While impressive, the highest LNG carriers order book-to-fleet-capacity ratio was recorded in 2006 (88 per cent). Liquefied petroleum gas (LPG) carriers have also attracted more orders, with a share of approximately 23 per cent in

2023.

This reflects expectations that LPG carriers and vessels designed to run on ammonia (NH3 vessels) will be capable of transporting ammonia as an alternative fuel. Although the fuels of the future remain uncertain, the greening of the global order book is under way. This includes orders for ships that can use multiple types of fuel and those equipped with dual fuel capabilities, allowing them to use more than a single fuel type.

Regulatory measures to combat climate change increased in 2023. The European Union introduced the

ETS scheme and compliance with the requirements of the International Maritime Organization (IMO) relating to the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) became mandatory. IMO also adopted its 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which strengthened targets for shipping by aiming for net-zero emissions by 2050. In the context of growing decarbonization commitments, as well as a relatively moderate order book and restrained investment in new builds, global fleet renewal is emerging as a key theme. The global shipping fleet is ageing, with many ships soon due to reach the end of their service.

Outlook

The landscape of international maritime trade has undergone significant light of recent global disruptions and evolving geopolitical dynamics. The global economy faces numerous challenges that could impact medium-term growth prospects. Persistent inflation, particularly in the services sector, makes it more difficult to normalize monetary policies, with central banks cautious about easing too quickly. Inflationary pressures are expected to remain high in several regions. High public debt levels in many economies, combined with elevated borrowing costs, constrain fiscal space and limit the ability of Governments to respond to economic shocks.

Conversely, upside opportunities include the expansion of green energy and artificial intelligence-related product sectors, as well as potential interest rate cuts in major economies that could boost trade. Maintaining a balance between immediate priorities and long-term sustainability and resilience goals will be essential for the continued growth and stability of international maritime trade.

ESSAR SHIPPING OPERATIONS & BUSINESS DEVELOPMENT

The company is continuously monitoring the market to enter into purchase of assets and operations thereby. Currently the company owns a Tug that is employed with for a long term charter of at market rates. The company is also looking for opportune time to acquire ships from the market.

The Company entered into Management Service Agreement (MSA) with one of its wholly owned subsidiary (WOS) and with a group company for providing back office support services which include Financial transactions processing and Financial support services, Procurement and sourcing services and Human resource management. The Company is charging fixed monthly fees against the services provided to those companies in line with the shareholders? approval vide resolution dated 29-09-2023. The aforementioned MSA contracts has been terminated during 1st quarter of FY 2025-26.

SUBSIDIARIES & ASSOCIATES

Your Company has two direct subsidiaries and one step-down subsidiary & one overseas step-down subsidiary. OGD Services

Holdings Limited, Mauritius, and Essar Shipping DMCC are direct subsidiaries of the Company. OGD Services Limited, India is the step down subsidiary of the Company. Your company also holds jointly majority of stake in DrillXplore Services Private Limited with its wholly owned subsidiary OGD Services Holdings Limited.

Energy II Limited cease to be the associate Company w.e.f

December 25, 2024 and residual investments in Energy II

Limited has been sold during quarter one of FY 2025-26. A report on the performance and financial position of each of the subsidiaries and associates companies as per the Companies Act, 2013 is provided as Annexure F to this report and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board is available on Company?s website Essar Shipping Limited - Essar

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act, 2013, SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015

("Listing Regulations") and Indian Accounting Standard (IND-

AS) - 110 on Consolidated Financial Statements read with IND-AS-28 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report. The audited Consolidated Financial Statements together with Auditors? Report thereon form part of the Annual Report.

The one step down subsidiary, one associate and one jointly controlled entity not considered for Consolidation process. The step down subsidiary admitted to NCTL and gone into liquidation and one associate and one jointly controlled entity was held by step down subsidiary, which has gone into liquidation. Hence, the share of profit / (loss) for the quarter and year ended March

31, 2025, has not been included in the Consolidated Financial Statements of the Company.

The Financial Statements of one step down subsidiary (which has been admitted to NCLT and gone into liquidation) have not been consolidated.

In case of an associate, which ceased to be an associate w.e.f.

December 26, 2024, the share of profit / (loss) of Rs. 3.51 Crore for the period April 1, 2024 to December 25, 2024 , has been considered for consolidation.

HUMAN RESOURCE

Your Company believes that employee competence and motivation are necessary to achieve its business objectives.

ESL has undertaken many training initiatives to enhance technical and managerial competence of the employees. ESL has even undertaken a series of initiatives to enhance emotional and intellectual engagement of employees.

Essar Radio: Used as a key medium to communicate important updates about the different projects that were going on at different sites. Leaders from every location including founders took the opportunity to connect with employees, discussing the strategies about how they aim to overcome the hurdles without hampering or jeopardising business timelines and also taking care of safety of the employees.

Manpower Optimization: As we believe in working in open mind culture, we do take care of employee?s wellbeing and skill set. As an integral part of manpower planning, the company effectively places the employees within the other business entity and assigned them roles equivalent to their skill sets, rather than closing their employment/contract.

In addition to the above mentioned initiatives, engagement programs like Health webinars, Yoga classes, and online counselling programme were also conducted. This transformation made it possible to scale learning efforts in a more cost-effective way and permits greater engagement during the locked in scenarios. Hence, initiatives like these taken during the year helped employees and their families to stay motivated and healthy. The Company has policies on code of conduct, sexual harassment of women at workplace, whistle blower, corporate governance, insider trading etc. guiding the human assets of the Company. For the year under review, there was no instance of the sexual harassment reported pursuant to the Sexual

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

COMPLIANCE WITH THE PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and Redressal of such complaints. The Company has complied with the provisions relating to

Constitution of Internal Complaints Committee under the Sexual

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act of 2013. The Company has not received any complaint of sexual harassment at workplace during the year.

The below table provides details of complaints received/ disposed during the financial year 2024-2025:

DIRECTORATE AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company provide entrepreneurial leadership and plays a crucial role in providing strategic supervision, overseeing the management performance, and long-term success of the Company while ensuring sustainable shareholder value. Driven by its guiding principles of Corporate Governance, the Board?s actions endeavor to work in the best interest of the Company.

The Directors hold a fiduciary position, exercises independent judgment, and plays a vital role in the oversight of the Company?s affairs. Our Board represents a tapestry of complementary skills, attributes, perspectives and includes individuals with financial experience and a diverse background.

DIRECTORS

During the year under review there were no changes in the

Board of Directors of the Company except the following:

1. Ms. Raji Chandrasekhar have tendered her resignation from the post of Independent Director with effect from closing hours of May 28, 2024;

2. Mr. Vipin Jain was appointed as a Whole-Time Director of the Company with effect from May 28, 2024.

As per Regulation 17(1)(c) of SEBI (LODR) Regulations, 2015,

Board of top 2000 listed entities w.e.f. April 01, 2020 shall comprises of at least six Directors, as such, on March 31, 2025, there were six directors on the Board of Company with

Independent Director as Chairman of the Board.

The Company has received declarations from all the Independent

Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-Section (6) of Section 149 of the Companies Act, 2013 and under Regulation

16 (b) (iv) of SEBI (LODR) Regulations, 2015.

Pursuant to Sections 134 and 178 of the Act and the

Regulations 17 and 19 of the Listing Regulations, Nomination and Remuneration Committee (‘NRC?) has set the policy for performance evaluation of Independent Directors, Board, Committees and other individual directors; separate meeting of Independent Directors; familiarization programme for Independent Directors, etc. is provided under Corporate

Governance Report annexed with this Report and the relevant policies are also available on the website of the Company Essar

Shipping Limited - Essar

Based on the criteria set by NRC, the Board has carried out the annual evaluation of its own performance, its committees and individual Directors for FY 2024-2025. The questionnaires on performance evaluation were prepared in line with the Guidance

Note on Board Evaluation date January 5, 2017, issued by SEBI

The performance of the Board and Individual Directors were evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board taking input from all the Committee members. NRC reviewed the performance of individual Directors, separate meetings of Independent Directors were also held to review the performance of Non-Independent Directors and performance of the Board as the whole. Thereafter, at the board meeting, performance of the Board, its committees and individual Directors was discussed and deliberated.

Further the evaluation of the Independent Directors was done by the entire board of directors of the Company. Their evaluationincludedperformance fulfillmentof directorsand the Independence criteria as specified in these regulations and their independence from the management.

KEY MANAGERIAL PERSONNEL

In terms of section 203 of the Companies Act, 2013, As on March 31, 2025 the Key Managerial Personnel of the Company are Mr.

Rajesh Desai, Executive Director, Mr. Vipin Jain, Chief Financial Officer and Ms. Rachana H Trivedi, Company Secretary & Compliance Officer.

Further during the period under review, Ms. Rachana H Trivedi, tendered her resignation on March 22, 2025 from the post of Company Secretary w.e.f. close of business hours of March 31, 2025 and simultaneously, Mr. Bharat Modi is appointed as a

Company Secretary & Compliance Officer w.e.f. April 01, 2025 at the Board Meeting held on March 31, 2025.

BOARD MEETINGS

During the year ended March 31, 2025, 6 (Six) meetings of the Board were held 6 times, that is on May 28, 2024, June 08,

2024, August 8, 2024, November 13, 2024, February 04, 2025, March 31, 2025.

COMMITTEES OF THE BOARD

Currently the Board has 5 Committees viz. Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Share Transfer Committee and Corporate Social Responsibility Committee.

A detailed note on the composition of the Board and its Committees and other related particulars are provided in the

Report of Directors on Corporate Governance forming part of this Annual Report.

CHANGES IN SHARE CAPITAL

There was no change in the Share Capital during the year under review.

The Stock Exchanges have rejected the application for Reclassification of M/s. Imperial Consultants & Securities Limited from Promoters category to Public category. Further, the

Company would be applying with fresh application to both the

Stock Exchanges.

Further during the period under review, the company has issued and allotted Non-Convertible Debentures as follows:

1. 2,50,00,000, 1% Unsecured, Redeemable, Unlisted, unrated, Non-Convertible Debentures to M/s. Essar Steel

Metal Trading Limited;

2. 2,50,00,000, 8.25% Secured, Redeemable, Unlisted, Non-

Convertible Debentures to M/s. Abhinand Ventures Private

Limited;

3. 6,00,00,000, 1% Secured, Redeemable, Unlisted, Non-

Convertible Debentures to M/s. Abhinand Ventures Private

Limited

Further, during the under review, 1% 3,20,00,000 unlisted debentures issued on 13 December 2023 were fully redeemed by the company.

DIRECTORS? RESPONSIBILITY STATEMENT

Your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards had been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them consistently and made judgments 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 March 31, 2025 and of the of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors had prepared the annual accounts on a going concern basis. The auditors have expressed an emphasis of matter on Going Concern in their Consolidated Audit Report relating to a step down subsidiary.

(e) the Directors, had laid down internal financial controls followed by the Company and that such internal financial controls are adequate and were operating effectively as endorsed by Statutory Auditor in their separate report annexed to the Annual Report

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RISK MANAGEMENT

Your Company has a Risk Management Policy that outlines the framework and procedures to assess and mitigate the impact of risks, and to update the Board and the senior management on a periodical basis on the risk assessed, actions taken for mitigation and efficacy of mitigation measures. With efficient

Risk Management Framework, your Company managed: (a) Economic Risks by entering into long term contracts with reputed global majors in each of its divisions thereby ensuring long term profitability of the Company and assured cash flows;

(b) Interest Rate Risk by undertaking suitable hedging strategies to overcome any adverse interest rate risks. It has formulated internal target rates at which any open interest rate risk can be hedged;

(c) Control over the operational matrix of various vessels to reduce cost and reduce downtime of vessels; and

(d) Control over various OPEX cost of the organization. As per LODR, Regulation 2015, Risk Management Committee is required to be constituted by top 1000 Companies based on market capitalisation, since your Company does not fall in that category, the constitution of Risk Management Committee is not required for your company. However, Company do believe and had put best efforts to minimise/mitigate the risk.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

Your Company has a well-established framework of internal operational and financial controls, including suitable monitoring procedure systems which are adequate for the nature of its business and the size of its operations. The detailed report is given in Corporate Governance Report. Based on the performance of the internal financial control, work performed by internal, statutory and external consultants and reviews of Management and the Audit Committee, the board is of the opinion that the Company?s internal financial controls were effective and adequate during the FY 2024-2025 for ensuring the orderly efficient conduct of its business including adherence to the Company?s policies, safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of accounting records and timely preparations of reliable financial disclosures.

VARIATION IN THE PROJECTED UTILIZATION OF FUNDS:

During the period under review, company issued and allotted

Non-Convertible Debentures (NCDs) worth 1100 Crores by converting existing inter-corporate deposits (ICDs) into NCDs.

Hence there was no variation in the utilization of funds.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of corporate governance and has put in place an effective corporate governance system. The Company has complied with all mandatory provisions of SEBI (LODR) Regulations

2015, relating to Corporate Governance. A separate report on

Corporate Governance as stipulated under the SEBI (LODR)

Regulations, 2015 forms part of this Report. The requisite certificates from the Auditors of the Company regarding compliance with the conditions of corporate governance are attached to the report on Corporate Governance.

VIGIL MECHANISM

The Company is in compliance with Section 177 of the Companies Act, 2013 and Regulation 18 and Regulation 22 of the Listing Regulations established Vigil Mechanism by adopting the ‘Whistle Blower Policy?, for Directors and Employees. The Whistle Blower Policy provides for adequate safeguards against victimization of persons who use such mechanism and have provision for direct access to the Chairperson of the Audit Committee in appropriate cases. A copy of the Whistle Blower Policy is available on the website of the Company Essar

Shipping Limited - Essar

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee comprises of the following members:

Since the Company has incurred losses in proceeding three financial years, it was not required to spend on CSR Activities

Further, in terms of provisions of Section 135 read with The Companies (Corporate Social Responsibility Policy) Rules,

2014 CSR Report is annexed to this Report as Annexure-A.

EMPLOYEE STOCK OPTION SCHEME

The Company has implemented the "Essar Shipping Employees Stock Option Scheme-2011" ("Scheme") in accordance with the

Securities and Exchange Board of India (Employee Stock Option

Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the SEBI Guidelines").

The term of scheme of Employee Stock Option was for a period of seven years which got completed in the year 2018. As the objective of the trust is attained, the ESOS trust has been wound up.

AUDITORS

M/s. C N K & Associates LLP, Chartered Accountants Statutory

Auditors (Registration No. 101961 W/W - 100036) were reappointed at 10th AGM of the Company held on September 30,

2020 to hold the office up to the conclusion of 15th AGM of the Company to be held in the year 2025.

The Audit Report on the Financial Statements of the Company for F.Y. 2024-25 forms part of this Annual Report.

The Report does not contain any qualification, reservation, adverse remark or disclaimer. The Company has confirmed with

Auditors that they satisfy the criteria provided under Section 141 of the Act and rules framed thereunder.

Further, M/s. Manohar Chowdhry & Associates, Chartered Accountants (Registration No. 01997S) would be appointed as the Statutory Auditors of the Company for a term of Five (5) consecutive years, to hold office from the conclusion of Fifteenth

(15th) AGM till the conclusion of Twentieth (20th) AGM of the Company to conduct statutory audit from FY2026 to FY2030.

AUDITORS? REPORT:

Further with regard to the observations made in Annexure A to the Auditors? Report, the management explanation is as under:

1. As on March 31, 2025, the Company has accumulated losses of Rs. 6,520.75 crore as against capital and reserves of Rs. 5,217.75 crore. Some of the Lenders of the Company?s

Subsidiary (which has gone into liquidation) where the

Company is a Guarantor, have filed applications before the High Court / National Company Law Tribunal / Debt

Recovery Tribunals for recovery of overdue amounts and / or enforcement of guarantees.

The Company has disposed off most of its assets and some of the investment in subsidiaries with a view to pay off its outstanding dues to lenders / vendors. The Company?s current liabilities exceed its current assets as on March 31,

2025.

2. The Company has certain significant for various matters with the Lenders of Company?s

Subsidiary & Customers, continuing from earlier years. The company is contesting all the open legal matters. During FY 2024-2025, some of the legal cases were settled.

3. We draw attention to Note No. 28 to the Standalone Financial Statements, which indicates that as on March 31, 2025, the Company has accumulated losses of Rs. 6,520.75 crore as against capital and reserves of Rs. 5,217.75 crore. The Company has defaulted on several loans and some of the lenders of the Company?s subsidiary (which has gone into liquidation) where the Company is a Guarantor, have filed application before various forums for recovery of overdue amounts and / or enforcement of guarantees. The Company has disposed off most of its assets and some of the investments with a view to pay off its outstanding dues to lenders / vendors. The Company?s current liabilities exceed its current assets as on March 31, 2025. This indicates that a material uncertainty exists that may cast doubt on the Company?s ability to continue as a going concern.

The Company, however, has represented that, as mentioned in Note No. 28 to the Standalone Financial Statements, the Company has earned operating income from Tug given on Bare-boat charter basis and management fees and is taking steps to rectify the mismatch in working capital. In view of the above, the Company has prepared the accounts as a going concern.

4. In an earlier year, the Company had settled the loan with a bank and paid the dues through monetisation of assets and recognised gain on settlement. Post settlement, the Bank had assigned the said loan to an Asset Reconstruction Company (Assignee Company). Pending outstanding bank guarantee (which was withdrawn during the year ended 31st March 2024) and pending Group level settlement, ‘No Bank orDue the Assignee Company till March 31, 2024.

During the year, the Company has paid an amount of Rs. 0.60 crore and received the NOC from the Assignee Company. The amount paid has been charged to the Statement of

Profit and Loss and has been shown as an exceptional item.

5. We draw attention to Note No. 3(A) and 8 of the Standalone Financial Statements relating to agreement for sale of shares held by the Company in a subsidiary. During the year, part of the consideration amounting to USD

52,499,960 has been received and sale of shares to the extent of consideration received has been recognised in the books of account.

The Company has filed necessary forms with the Reserve Bank of India in this regard. The balance shares are held for sale and have been disclosed accordingly.

6. We draw attention to Note No.19(B) of the Standalone Financial Statements relating to payment of Rs. 50.83 crores to two banks during the year towards One Time Settlement (OTS) between the said banks and a step-down subsidiary of the Company.

In respect of one bank, the Company has settled the certificate? beenloanandpaidtheduesand ‘nodues received from the said bank. The Company does not expect any additional liability to devolve in this regard. In respect of the other Bank, the OTS is yet to be concluded.

Since the step-down subsidiary is under liquidation, hence the entire amount paid is doubtful of recovery and same has been fully provided for.

7. The Company has netted off of Rs. 331.26 Crore payable to a wholly owned overseas subsidiary with the amount receivable from the said subsidiary. This is subject to pending application and approval from the regulatory authorities. Once we will get the approval for set-off, net amount will be shown as receivables from the subsidiary company.

8. We draw attention to Note No. 28 to the Consolidated Financial Statements wherein it is stated that:

- The Group has accumulated losses of Rs. 5,506.39 crore as against capital and reserves of Rs. 3,126.76 crore as on March 31, 2025.

- Some of the lenders of one of the subsidiaries which has gone into liquidation) where the holding company is a Guarantor have filed application before various forums for recovery of overdue amounts and / or enforcement of guarantees.

- The Group?s Holding Company has disposed off most of its assets and some of the investments to pay off its outstanding dues to lenders / vendors.

- The net worth the Group eroded and it is incurring continuous losses since last several years.

- In case of a subsidiary, the auditors of the said Company have pointed out that the Company has obtained a one-time settlement agreement with 3 out of 4 of its external lenders and that the said Company is in discussion with its group companies to obtain financial support.

The Group has earned operating income by way of hire charges and management fees and is taking steps to rectify the mismatch in working capital.

9. We draw attention to Note No. 19(c) of the Consolidated Financial Statements relating to payment of Rs. 50.83 crores during the year to two banks towards One Time Settlement (OTS) between the said banks and a step-down subsidiary of the Holding Company.

In respect of one bank, the Holding Company has settled certificate? hastheloanandpaidtheduesand‘nodues been received from the said bank. The Holding Company does not expect any additional liability to devolve in this regard. In respect of the other Bank, the OTS is yet to be concluded.

Since the step-down subsidiary is under liquidation, hence the entire amount paid is doubtful of recovery and same has been fully provided for.

10. We draw attention to Note No. 8 of the Consolidated Financial Statements relating to the agreement for sale of shares held by the Holding Company in a subsidiary. Part of the consideration amounting to USD 524,99,960 has been received by the Holding Company during the year, and sale of shares to the extent of consideration received has been recognized in the books of account.

The Holding Company has filed necessary forms with the

Reserve Bank of India in this regard. The balance shares are held for sale and have been disclosed accordingly.

11. As on March 31, 2025 the Group has accumulated losses of Rs. 5,506.39 crore as against capital and reserves of

Rs. 3,126.76 crore. The Group has also defaulted on several loans and lenders have initiated recovery proceedings as mentioned in Note No.28 of the Consolidated Financial Statements.

The Group has disposed off most of it?s assets and some of the investment in subsidiaries with a view to pay off it?s outstanding dues to lenders/ vendors. The Group?s current liabilities exceeds its current assets as on March 31, 2025. All these factors indicates that a material uncertainty exists that may cast doubt on the Group?s ability to continue as a going concern.

12. In case of one associate and one jointly controlled entity, share of profit / (loss) for the quarter and year ended March

31, 2025, has not been included in the Consolidated During the FY 2022-23, the Indian step-down subsidiary was admitted to Corporate Insolvency Resolution Process (CIRP) and consequently its management was taken over by Interim Resolution Professional. Hence the share of profit/ (loss) of associate of the step-down subsidiary an entity jointly controlled with the step-down subsidiary is not considered for consolidation purpose for FY 2024-25. 13. The Financial Statements of one step down subsidiary

(which has been admitted to NCLT and gone into liquidation) have not been consolidated.

During the FY 2022-23, the Indian step-down subsidiary was admitted to Corporate Insolvency Resolution Process (CIRP) and consequently its management was taken over by Interim Resolution Professional. Hence the subsidiary is not considered for consolidation purpose for FY 2024-25. 14. In case of an associate, which ceased to be an associate w.e.f. December 26, 2024, the share of profit / (loss) of Rs. 3.51 Crore for the period April 1, 2024 to December 25, 2024 , has been considered for consolidation.

The company has sold the investment in shares in the associate company and hence, considered share of profit of an associate till December 25, 2024.

REPORTING OF FRAUDS BY AUDITORS:

During the year under review, neither the statutory auditors nor the secretarial auditors reported to the Audit Committee of the Board, under section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Report.

INTERNAL AUDITOR AND THEIR REPORT

The Board has appointed M/s. DMKH & Co, Chartered Accountants, as Internal Auditor of the Company to conduct

Internal Audit for the financial year 2024-2025. During the year under review M/s. DMKH & Co, Chartered Accountants, Internal Auditor has submitted their Report for the said quarters/period to the Audit Committee for its review and necessary action.

SECRETARIAL AUDIT

The Board has appointed M/s. Mayank Arora & Co., Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2024-2025.

Further, as per SEBI Circular dated December 31, 2024, M/s. Mayank Arora & Co., Practising Company Secretaries would be appointed as Secretarial Auditor of the Company, for a term of

Five (5) consecutive years, to hold office from the conclusion of Fifteenth (15th) AGM till the conclusion of Twentieth (20th) AGM of the Company to conduct secretarial audit from FY2026 to FY2030.

The Secretarial Audit Report for the financial year ended March 31, 2025 is annexed herewith marked as Annexure - B to this

Report.

The Secretarial Auditor has made following observation(s) and the Management reply for the same is as under:

1. Pursuant to regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the company was required to make disclosure of related party transactions after every six months on the date of publication of its standalone and consolidated financial results with effect from April 01, 2023; however the company has filed the related party transaction details with 1 (one) day delay for both half year ended i.e. March 31, 2024, therefore the company has paid the relevant fine as levied by BSE and

NSE within the relevant timeline and also applied for waiver of the same.

The Company has paid the relevant fine as levied by the BSE and National Stock Exchange of India Limited within the relevant timeline and also applied for waiver. The Board Members took the cognizance of the fine levied by the exchanges and stated that more care should be taken while undertaking compliances in the future.

2. Pursuant to the provisions of section 129 of Companies Act, 2013, the Financial Result of one subsidiary (which has been admitted to NCLT and undergoing CIRP Process) have not been consolidated.

During FY 2022-23, one of Indian sub-subsidiary got admitted to Corporate Insolvency Resolution Process (CIRP) and management of the company took over by Resolution Professional and hence the said subsidiary not considered for consolidation purpose MAINTENANCE OF COST RECORDS:

The maintenance of cost records for the services rendered by the Company is not required pursuant to Section 148(1) of the Companies Act, 2013 read with Rule 3 of Companies (Cost Records and Audit) Rules, 2014.

SECRETARIAL STANDARDS OF ICSI

The Directors state that proper systems have been devised to ensure compliance with the applicable laws. Pursuant to the provisions of Section 118 of the Act, 2013 during F.Y. 2024-2025, the Company has adhered with the applicable provisions of the Secretarial Standards ("SS-1" and "SS-2") relating to ‘Meetings of the Board of Directors? and ‘General Meetings? issued by the

Institute of Company Secretaries of India ("ICSI") and notified by MCA.

APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT

The Board of Directors on recommendation of the Nomination & Remuneration Committee has adopted a policy for appointment of Directors, remuneration of Directors, Key Managerial Personnel and other employees. The brief details on the above are provided in Corporate Governance Report and the policy is available on the website of the Company esl.secretarial@ essarshipping.co.in. The details of remuneration as required to be disclosed pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - C to this Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 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 together with disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the

Annexure - D to this Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the

Company during the financial year with related parties were in the ordinary course of business and on an arm?s length basis.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company?s website Essar Shipping Limited

- Essar. The information on each of the transactions with the related party as per the Companies Act, 2013 is provided in note 27 of notes forming part of the financial statement and hence not repeated. The disclosure required pursuant to clause (h) of subSection (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed herewith as Annexure - E to this Report.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2025 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at Essar

Shipping Limited - Essar.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the provisions of the Act and IEPF Rules, as amended from time to time, the Company is required to transfer the following to IEPF:

1. Dividend amount that remains unpaid/unclaimed for a period of seven (07) years; and

2. Shares on which the dividend has not been paid/claimed for seven (07) consecutive years or more.

Additionally, pursuant to Rule 3(3) of IEPF Rules, in case of term deposits of companies, due unpaid or unclaimed interest shall be transferred to the Fund along with the transfer of the matured amount of such term deposits.

As on date, there are no unpaid and unclaimed amounts to be transferred to the investor education and protection fund.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The Insolvency Petition was filed by Corporate Creditor of OGD Services Limited (OGD), a step down Subsidiary of ESL. The Company (OGD) is admitted under the Corporate Insolvency Resolution Process ("CIRP") by Hon?ble National Company Law Tribunal ("NCLT"), Mumbai Bench by Order dated February 09, 2023. During the year the NCLT has passed an order on 29th April 2024 for liquidation of the company. ESL being the corporate Guarantor has contested the order with NCLAT Delhi.

Currently the matter is sub-judice.

The Company has received Notice from Registrar of Companies, Ahmedabad (herein referred as "ROC") dated April 11, 2023 for Adjudication of penalty under Section 454 of Companies Act, 2013 under u/s 197 of the Companies Act, 2013. Further, the Company has paid an amount of Rs. 5,00,000/- to ROC as the penalty was imposed on the Company and Rs. 1,00,000/- each was paid by Mr. Ranjit Singh and Mr. Rahul Bhargav who were Directors of the Company.

Further, the Company has also received Notice from Registrar of Companies, Ahmedabad (herein referred as "ROC") dated January 11, 2024 for Adjudication of penalty under Section 454 of Companies Act, 2013 under u/s 118 of the Companies Act, 2013. Further, the ROC have imposed the penalty on the Company of Rs. 10,50,000/- and Rs. 90,000/- on its officers in default. The Penalty amount is paid by the officers in default and the company is under process of paying the same.

During the year, the company has signed a settlement agreement with Steel Authority of India Limited (SAIL) under the Vivad Se Vishwas Scheme - II. As per the Scheme, the company will receive 65% of original claim amount plus interest which was accounted as exceptional item in the earlier year. Irrecoverable amount of Rs. 66.99 crores hasbeenchargedtoProfit& Loss account as on 31st March, 2024 as an exceptional item

The company have received interest waiver to the tune of Rs. 6.60 crores from one of the lenders and hence same has been shown as exceptional income in Profit & Loss account and no dues certificate received from them.

During the year, the Income tax departmenthasfiledan appeal with the High Court of Bombay against the favourable order passed by Income Tax Appellate Tribunal (ITAT) in favour of the company for one assessment year.

Technology Absorption

The Company has successfully implemented SAP in its financial and budget management systems. The Company has also now implemented various methods of automation so as to have greater visibility and control over its assets and further improve the turnaround time thereby increasing asset utilisation and profitability. Planned maintenance and purchase management system of all the vessels are now being integrated with SAP in order to have uniform platform. The Company has implemented a robust Document Management System thus improving the availability of critical information in e-mode thereby reducing the use of paper. Ship-staff payroll system has been developed and implemented successfully.

Foreign Exchange Earnings and Outgo

The details of Foreign Exchange Earnings and Outgo during the year are as follows:

Foreign Exchanged Earned (including loan receipts, sale of ships, freight, charter hire earnings, interest income, etc.):

Rs. 501.36 crores

Foreign Exchanged Used (including cost of acquisition of ships, loan repayments, interest, operating expenses, etc.): Rs. 534.48 crores

PUBLIC DEPOSITS

During the year under review, your Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as ‘Deposits? in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

PREVENTION OF SEXUAL HARASSMENT

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. Disclosures in relation to the Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance.

LISTING OF SHARES & LISTING FEES

The Company?s equity shares are actively traded on BSE

Limited (BSE) and the National Stock Exchange of India Limited (NSEIL). The listing fees payable for the financial year 2024-2025 is paid to BSE Limited and National Stock Exchange of India Limited within due date.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company?s shares and prohibits the purchase or sale of Company?s shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code. The Compliance officer is entrusted with responsibility of overseeing, the compliances prescribed in connection with prevention of Insider Trading.

PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

To the best of our knowledge and belief, there are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal as on March 31,

2025

OTHER STATUTORY DISCLOSURES

No disclosure or reporting is made with respect to the following items, as there were no transactions during FY 2024-25.

- There was no issue of equity shares with differential rights as to dividend, voting or otherwise;

- There was no issue of equity shares (including sweat equity shares) to employees of the Company under Employees Stock Option Scheme;

- The Company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefits of employees;

- Directors of the Company have not received any remuneration or commission from any of its subsidiaries;

- The Company has not failed to implement any corporate action; and

- There was no revision of financial statements and/ or Directors? Report of the Company under Section 131 of the Companies Act, 2013.

APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their appreciation of commendable teamwork of all employees. Your Directors express their thanks to all the offices of the Ministry of Shipping, Directorate General of Shipping, Ministry of Petroleum and Natural Gas, Indian Navy, Indian Coast Guard, Mercantile Marine Department, State

Government and Central Government, Classification societies,

Oil Companies and Charterers, creditors, Banks and Financial Institutions for the valuable support, help and co-operation extended by them to the Company.

Your Directors also thanks its other business associates, including the Members of the Company for their continued cooperation and support extended towards the Company.