Essar Shipping Ltd

DIRECTORS' REPORT

To the Members of

Essar Shipping Limited

Your Directors are pleased to present the Fourteenth Annual Report and Audited Financial Statements of the Company for the financial year ended March 31, 2024.

FINANCIAL HIGHLIGHTS:

The Company's financial performance, for the year ended March 31, 2024 is summarized below :-

PERFORMANCE REVIEW:

The Key Highlights of the Company's performance (Standalone) for the year ended March 31, 2024 are as under:

1. Net Revenue from operations recorded at Rs. 15.76 Crore as against revenue of Rs. 3.33 Crore in the previous financial year.

2. Net Loss recorded at Rs. 70.76 Crore as against last year's Net Profit of Rs. 1692.88 Crore

The management is very much optimistic for its future performance and will endeavors all its efforts to keep the organization as profitable concern.

DIVIDEND

In view of loss in current year and 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, 2024.

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 2023-24.

A. GLOBAL INDUSTRY OUTLOOK

Considered to be the biggest sector in the world in terms of dollar value, the Oil and Gas industry is a global powerhouse employing hundreds of thousands of workers worldwide as well as generating hundreds of billions of dollars globally each year. In regions which house the National Oil Companies (NOC), these Oil and Gas companies are so vital they often contribute a significant amount towards national GDP.

The Oil and Gas 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.

In Oil markets, the depths of the post-2014 downturn seem to be behind us. Oil prices have recovered from the 2016 annual average WTI price low of $40. It breached $50 in 2017 and through September 2018 it averaged just shy of $67. This recovery has been the result of various factors, including sustained success of the production restraint agreement between OPEC and non-OPEC countries in force since the beginning of 2017.

[Source: Westwood Global Energy Group: Global Offshore Drilling Rig Dayrate Forecast 2023-27]

B. RIG MARKET OUTLOOK

• Rig Market Conditions have continued to improve in 2024: Day rates have risen further this year, amidst increasingly limited availability, following significant demand-side gains across the last 30 months. Moreover, notable growth in rig deployment is expected moving forward, as units fixed in 2022/early-2023 continue to commence their contracts. Overall, though some concerns remain surrounding the impacts of macroeconomic headwinds on oil demand and pricing, the rig sector outlook is positive.

• Rig Demand has increased by 6% Y-O-Y: Jack Ups: +5% & Floaters: +9%, standing at 520 units at start- June (85% utilisation). In 2024 so far, floater demand has grown by 3% with gains concentrated in the ‘Golden Triangle', where offshore units are currently active (96% utilisation), up by 5 units (+8%) in the YTD and standing 27% above start-23 levels. Meanwhile, though global jack-up deployment has softened slightly this year (-1% in the YTD), demand in the Middle East reached a new record level at start-June (151 units, 92% utilisation) while activity elsewhere has shown signs of improvement in recent months.

• Global Rig deployment is likely to strengthen Further Moving Forward: Jack-up demand is projected to grow by 6% in the rest of 2024, as units in the Middle East continue to commence their contracts. Meanwhile, floater demand is expected to increase by 10% across the rest of the year, underpinned by significant incremental demand growth in the ‘Golden Triangle' out to end-2024. In 2024, harsh requirements are likely to increase considerably, supporting overall rig demand, as development drilling work commences at recently sanctioned projects in NW Europe, and also driven by rising harsh Deepwater exploration/appraisal activity in the Orange Basin off West Africa. Overall, global rig demand is projected to grow by 7% this year, reaching 557 units at end-23 (90% utilisation), before growing by a further 7% next year, reaching 595 units at end-2024 (93% utilisation, 3pp below start-14).

• Rig supply-side limitations are likely to Persist:

Active rig supply stood at 611 units at start-June, up by 5 units (1%) in the ytd, but still 6% below start-20 levels. The pace of supply-side growth has continued to be limited by challenges in resolving ‘stranded' assets as well as constraints on reactivation activity, owing to cost inflation and supply chain disruption, with delivery volumes also limited by issues in securing finance and increasing yard quotes. As these factors persist, active rig supply growth is expected to remain moderate; marketable supply is expected to grow by 2% and 3% across 2023 and 2024 respectively, reaching 641 units at end-24 - still 2% below start-20 levels.

• Rig Dayrates have continued to improve in 2023 so far: Rig Rate Index stood at 127 points at end- May, up by 5% in the ytd, and standing 26% above the 2012-22 average (though still 25% below start-14). ‘Leading edge' high-spec jack-up rates have now risen to $160,000/day, the highest level since early-2015, whilst the average UDW floater dayrate currently stands at $391,000/day, up by 6% in 2023 so far and 66% above start-22.

C. ROAD AHEAD

Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation. Crude oil consumption is expected to grow at a CAGR of 5.14% to 500 million tonnes by FY40 from 202.7 million tonnes in FY22. In terms of barrels, India's oil consumption is forecast to rise from 4.05 MBPD in FY22 to 7.2 MBpD in 2030 and 9.2 MBPD in 2050. Diesel demand in India is expected to double to 163 MT by 2029-30, with diesel and petrol covering 58% of India's oil demand by 2045. Demand is not likely to simmer down anytime soon, given strong economic growth and rising urbanisation.

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 planning to double its oil refining capacity to 450500 million tonnes by 2030.

Energy demand of India is anticipated to grow faster than energy demand of all major economies globally on the back of continuous robust economic growth. Moreover, the country's share in global primary energy consumption is projected to increase to two-fold by 2035.

Overview of the World Economy & Shipping Industry

Global shipping continues to confront multiple challenges, including heightened trade policy and geopolitical tensions and is dealing with changes in globalization patterns. Additionally, shipping must transition to a more sustainable future, decarbonize and embrace digitalization. Balancing environmental sustainability, regulatory compliance and economic demands is vital for a prosperous, equitable and resilient maritime transport future.

International seaborne trade volume contracted by 0.4 per cent in 2022. In 2022, oil and gas trade volumes witnessed robust annual growth rates, of 6 per cent and 4.6 per cent, respectively. The increase can be attributed to heightened demand for fuel as the pandemic eased and related restrictions were lifted.

In terms of tonnage delivered in 2022, dry bulk carriers took the lead, followed by oil tankers and container vessels. China, the Republic of Korea and Japan were the top shipbuilding countries, accounting for a significant 93 per cent of total tonnage delivered.

The global fleet continued to grow at 3.2 per cent in 2022 but aged compared to a decade earlier.

Over time, world fleet capacity has expanded at varying rates reflecting booms and busts in the business and shipping cycles as well as trends in shipbuilding and ship financing capacity, among other factors. Growth in the global feet dead weight tons (dwt) averaged from annual 7.1 per cent between 2005 and 2010.

As the financial crisis which triggered consolidation in shipbuilding capacity and a downsizing of the ship financing market, the average annual growth decelerated to 4.9 per cent since 2011. Since the COVID-19 pandemic and the uncertainties related to the future energy transition, fleet growth further decelerated. In 2022, global fleet capacity expanded by 3.2 per cent over the previous year. Oil tanker fleet capacity increased by 3.4 per cent, up from 1.6 per cent growth in 2021. Bulk carrier capacity increased at a moderate 2.8 per cent while the capacity of liquefied gas carriers increased by 5.0 per cent.

The age profile of the global fleet has implications for fleet renewal and recycling patterns, which are key factors influencing compliance with growing environmental regulations.

At the start of 2023, commercial ships averaged 22.2 years of age, a further increase over the previous year. On average, the global fleet was two years older in 2023 compared to a decade before, and more than half the fleet is over 15 years of age.

The fleet's age profile partly reflects modest recycling activity, as owners hold on to old tonnage, anticipating market recovery. It also reflects delays in investing in fleet renewal which stems from shipowners awaiting more clarity on future low carbon fuels, technologies, and regulation.

In a separate development, operational complexities increased with the ongoing war in Ukraine. The conflict and related economic restrictions may have increased ‘shadow' feet activity. Since the war in Ukraine, oil exports from the Russian Federation have supported demand for ‘shadow' tonnage (Bouissou J, Pravettoni R, Fattori F, 2023;), thereby boosting the sales and purchase transactions and increasing the value of older vessels, in particular tankers (Galanopoulos J, 2023; Telling O, 2023). This trend may also be delaying recycling activity (VesselsValue, 2023). New ship owning entities such as in China, the United Arab Emirates and India have emerged, aiming to take advantage of the high premiums associated with the new trade routes (Galanopoulos J, 2023). It should be noted that reference to ‘shadow' feet in this context refers to vessels carrying cargo sourced from the Russian Federation and which might be subject to restrictive economic measures.

DECARBONIZING sHIPPING & ALTERNATIVE FUEL UPTAKE

Like other economic sectors, shipping generates greenhouse gas (GHG) emissions and must reduce its carbon footprint. International shipping, which carries over 80 per cent of the world merchandise trade by volume, is responsible for nearly 3 per cent of all global GHG emissions. Although shipping contributes relatively small shares of GHG emissions per unit of transport work, without further action, emissions from the sector would continue to increase.

ESSAR SHIPPING LIMITED

Decarbonizing shipping will require a shift in technology and operations and an uptake of alternative low and zero GHG fuels. The transition entails a potential increase in maritime logistics costs, shipping rates and voyage times. Investments required to adjust ship designs, engines, operations, generate alternative low and zero carbon fuels at scale and implement green onboard technologies all have a price tag.

This will drive up costs for shipowners, industry and, ultimately trade and the final consumer.

However, delaying decarbonization action in shipping would also be costly. First, there are the costs of climate change and its impacts. Second, starting the decarbonization process later will result in the need for steeper emissions reductions in an even shorter period. Thirdly, delayed action will lead to higher shipping rates and costs, as it adds uncertainty to investment decisions. Scaling up investment in new ships (design, engines, onboard technologies, crew skills), energy supply and bunkering infrastructure (i.e., alternative fuels availability and supply through dedicated and adequate production, bunkering facilities, and storage) is crucial. Minimizing uncertainty about future regulations and reducing a lack of clarity about carbon prices and fuels is needed to spur action and investment by shipowners and other stakeholders across the maritime transport and energy production value chain. The global shipping sector has a large potential to usher in a synchronized technology change and energy shift, guided by just and equitable transition objectives. If the international community can advance with a predictable regulatory framework and agree on clear, cost- effective technical and economic measures, the sector will minimize uncertainty and reduce transition costs.

Monitoring shipping costs and fuel charges amid the rise in alternative fuels Fuel costs account for a significant portion of the overall ship operating costs. Transitioning to cleaner fuels may be more expensive and add to these costs. Depending on factors such as vessel size, efficiency and the distance travelled, fuel costs can account for up to two thirds of the overall expenses making it by far the largest component of the carrier's variable cost base. Consequently, the shift towards cleaner fuels will generate additional costs and will make fuel an ever more critical component in the cost structure of shipping operations. When comparing bunker fuels to their low and zero GHG fuel alternatives, the price differential can be significant. Data from Clarksons Research shows that in December 2022, very low sulphur fuel oil was priced at approximately $635 per metric ton and the average cost of heavy fuel bunker oil (380 centistoke in Rotterdam, Kingdom of the Netherlands) hovered around $515. Meanwhile, under an assumption of green hydrogen at $2.5 per kilogram, the cost of ammonia would amount to $1,239 per ton (fuel oil equivalent), and methanol would reach approximately $1,400 per ton (Financial Times, 2023). Comparing prices for alternative fuels is not straightforward. Energy content of the fuels per ton varies significantly. Prices may be referred per gross calorifc value. There are also different standards regarding units (energy vs quantity) and currencies across markets. Argus Media publishes alternative marine fuels prices based on energy equivalents, including marine gas oil equivalent, very low sulphur fuel oil and British thermal units. These allow for fair price comparisons based on energy density (DNV, 2023).

Alternatively, fuelled vessels are also more capital intensive. For example, the cost of building a new liquifed natural gas-powered-powered ship is estimated at around 10-20 per cent higher than a conventional ship (OECD, 2023). Similarly, additional expenditure involved in vessel dual fuel capability, which enables a ship to operate on both methanol and conventional low sulphur fuel, is in the range of 10-15 per cent of the total price, estimated at around $175 million (Frangoul, 2021). Similar values have been suggested with an ammonia dual-fuel vessel. Many of the existing, conventionally fuelled feet could be retrofitted to ammonia or methanol dual-fuel use, with a similar total expenditure to a dual-fuel newbuild (M^rsk Mc-Kinney M ler Center, 2022). It is important to understand and monitor the evolution of freight rates and associated costs, namely fuel surcharges, in the context of the energy transition. The precise formulas used to calculate the various surcharges applied in shipping, including fuel surcharges, are generally an issue of concern for shippers. With the energy transition in shipping is expected to accelerate in the coming years, the way in which alternative fuels will be priced and charged to carriers and, consequently, shippers and trade, will require attention.

All relevant stakeholders should collaborate to devise suitable pricing mechanisms and avoid different and unfair practices and imbalances. It will be important to understand how freight rates and the cost of new, low- or zero-carbon bunker fuels will be established and incorporated into the final costs. For example, a mechanism or framework could be developed to help define the basis used to determine the shipping rates and surcharges levels. This would help standardize the calculation of these rates and charges, enhance transparency and promote greater collaboration in shipping and trade. Monitoring alternative fuel prices would also provide valuable data for assessing the economic implications of decarbonization efforts. This information can guide decision-making processes, inform regulatory efforts, and boost sustainable shipping practices.

The transition to alternative fuels is still in its infancy. A total of 98.8 per cent of the global feet in terms of number of vessels use conventional fuels. Only 1.2 per cent are using alternative fuels, mainly liquified natural gas (LNG), and to a lesser extent, battery/hybrid, liquified petroleum gas (LPG), and methanol.

Investment into alternative fuel continued in first half 2024, accounting for around one third of all new build orders and 41% of all tonnage placed and with orders announced for vessels capable of using either LNG (109 orders, 51 excluding LNG Carriers), methanol (49 orders), ammonia (15 orders), LPG (42 orders) and Hydrogen (4 orders). Excluding LNG Carriers, the relative share of ordering of LNG fuel capable tonnage increased relative to methanol capable tonnage in the first half compared to 2023 levels.

With the confirmed order book (~50% of orderbook tonnage is today alternative fuelled) and projected investment in the coming years, Clarksons Research, Technology Tracker Report forecasts that over a fifth of all fleet capacity will be alternative fuel capable by the end of the decade (2017: 2% of fleet capacity "on the water", 2024: 7%, 2030(f): >20%).

Implementing alternative fuels on a large scale requires significantly transforming fuel production and distribution value chains. It also involves multiple stakeholders across the shipping, port, energy and finance sectors. Swift intervention at the policy and regulatory level is needed to stimulate demand for alternative fuels, green technologies and fleets, and encourage industry to invest. Decarbonizing shipping by 2050 will require large investments, with some estimates suggesting an additional $8 billion to $28 billion annually, to enable ships to decarbonize by this date. Fuel infrastructure investments are expected to surpass onboard investments. Scaling up fuel production, distribution and bunkering infrastructure to supply 100 per cent carbon-neutral fuels by 2050 will require annual investments of around $28 billion to $90 billion. Estimates suggest that full decarburization could raise annual fuel costs by 70 to 100 per cent compared to current levels.

FREIGHT RATES AND OUTLOOK

The war in Ukraine reshaped maritime trade flows, increasing cargo distances and ton-miles. The Baltic Dry Index, which measures shipping prices, fluctuated significantly, with rates peaking in May 2022. Rates fell to pre-pandemic levels by December 2022. In early 2023, freight rates declined further due to a seasonal slowdown and adverse weather conditions disrupting commodity production. A surge in demand for dry bulk cargo in the second quarter of 2023, triggered by post-pandemic industrial growth in China, led to a rebound in freight rates by mid-year.

The war in Ukraine has contributed to sustained rates and has reshaped oil trade patterns. Oil and gas exports from the Russian Federation shifted towards Asia as the Russian Federation looked for alternative markets and European countries sought new suppliers to replace energy imports from the Russian Federation. In early 2023, the tanker market continued to show strong earnings due to ongoing geopolitical factors and increased ton-miles. However, uncertainties related to the energy transition and compliance with new International Maritime Organization (IMO) requirements, namely the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII), may limit effective future tanker carrying capacity.

Outlook

Shipping continues to grapple with complexities generated by the global events that upended the world economy over recent years. This includes the legacies of the COVID-19 pandemic, lower levels of global economic growth, inflation, heightened energy and food security concerns, increased geopolitical risks and trade policy tensions arising from more restrictive trade policy measures introduced to achieve wide-ranging objectives including security, resilience, self-sufficiency and the competitiveness of domestic firms. While the global economy remains vulnerable to disruptive shocks, certain trends are currently supporting the shipping industry. In the short term, this includes redistribution of energy flows and economic recovery in China after the disruption caused by the COVID-19 pandemic, and its associated response measures.

Against this background, UNCTAD forecasts moderate growth in seaborne trade volumes hovering at an average of 2.1 per cent per year during the period 2024-2028. The divergence between growth patterns between energy-related trade and non-energy is expected to continue. Optimism around increasing Chinese economic activity, which drives dry bulk trade, the redistribution of oil flows in response to the war in Ukraine and the re-opening of the world economy after nearly three years of the COVID-19 pandemic and its fallout bodes well for tanker and dry bulk shipping and trade. Prospects for gas trade are also positive, supported by a greater focus on energy transition, energy security, and a low-carbon development path.

While distances travelled by tanker trade increased following the war in Ukraine and its fallout on the energy supply landscape, going forward, trends in distances travelled and trade ton-miles will depend on a range of factors including trends in the energy transition, commodity prices, supply-side capacity constraints, climatic factors, and regulatory requirements that may affect shipping fleet speed, routing and operational decisions.

Projected growth in maritime trade volumes assumes that downside risks will dominate international trade and economic growth in the coming years. These risks relate to the timing and path of global economic recovery, the ongoing war in Ukraine and the evolving context of maritime transport and trade. Increased policy-driven geo-economic fragmentation could potentially reshape trade patterns, supply chains and shipping routes.

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 right kind of opportunity to enter into shipping business by acquiring ships from the market.

The company is providing management services for operation & management of the semi-submersible rig to one of its overseas wholly owned company. Post the year end, this overseas wholly owned company have sold its rig to another overseas wholly owned company. Further, the company is also providing management services to one of the overseas associate company for facilitating in completing the construction of two under construction jack-up rigs.

During the end of FY 2022-23, the Company entered into Management Service Agreement (MSA) with one of its wholly owned subsidiary company (WoS) for providing back office support services which include Financial transactions processing and Financial support services, Procurement and sourcing services and Human resource management. Further, during FY 2023-24, the Company has entered into MSA with one more group company for providing support services. The Company is charging fixed monthly fees against the services provided to these companies in line with the shareholders' approval vide resolution dated 29-09-2023. This has resulted into increase in revenue from operations on standalone basis. Further, in order to fulfil the support service agreement, the Company had hired additional employees. This has led to increase in Employee Benefit Expenses on standalone basis for FY 2023-24.

During the FY 2023-24, one of the wholly owned subsidiary company completed their existing rig contract in Indonesia on 05-06-2023 and thereafter the rig was awaiting for further deployment opportunities and hence did not accrue any revenue. Hence, there was decrease their rig operations income during the year. However, the subsidiary company was incurring minimal standing cost (like crew salaries, maintenance, spares etc.) from June 2023 onwards without any revenue. Therefore the operating expenses of the Company increased on consolidated basis for FY 2023-24.

SUBSIDIARIES & ASSOCIATES

Your Company has three direct subsidiaries and one step- downsubsidiary. OGD Services Holdings Limited, Mauritius, Energy II Limited, Bermuda and Essar Shipping DMCC are direct subsidiaries of the Company. OGD Services Limited, India is the step down subsidiary of the Company.

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.

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 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 below table provides details of complaints received/ disposed during the financial year 2023-2024:

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.

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, 2024, 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 2023-2024. 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 evaluation included performance of directors and fulfillment of 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, 2024 the Key Managerial Personnel of the Company are Mr. Rajesh Desai, Executive Director, Mr. Vipin Jain, Chief Financial Officer and Ms. Nisha Barnwal, Company Secretary & Compliance Officer.

Further during the year under review, Ms. Nisha Barnwal, tendered her resignation on March 28, 2024 from the post of Company Secretary w.e.f. close of business hours of April 12, 2024 and simultaneously, Ms. Rachana H Trivedi is appointed as a Company Secretary & Compliance Officer w.e.f. April 12, 2024 at the Board Meeting held on March 28, 2024.

BOARD MEETINGS

During the year ended March 31,2024, 14 (Fourteen) meetings of the Board were held 14 times, that is on April 26, 2023, May 18, 2023, May 29, 2023, August 8, 2023, August 16, 2023, August 25, 2023, October 10, 2023, November 8, 2023, December 13, 2023, January 20, 2024, February 3, 2024, February 8, 2024, March 28, 2024.

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.

However, the Company has received approval for Reclassification of M/s. Arcelor Mittal Nippon Steel India Limited from Promoters category to Non-Promoters category on July 06, 2023 from both the Stock Exchanges. Further, the approval is still awaited from BSE and NSE for Reclassification of M/s. Imperial Consultants & Securities Limited from Promoters category to Public category.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2024, 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, 2024 and of the loss 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 2023-2024 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 an timely preparations of reliable financial disclosures.

CORPORATE GOVERNANCE

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 Nomination and Remuneration Committee of the Board of Directors of the Company administers and monitors the Scheme. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2024 are provided in to this Report.

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, process of winding up of the ESOS trust is in process.

AUDITORS

M/s. C N K & Associates LLP, Chartered Accountants - Statutory Auditors (Registration No.101961W/W - 100036) were reappointed at 10^th AGM of the Company held on September 30, 2020 to hold the office up to the conclusion of 15^th AGM of the Company to be held in the year 2025.

The Audit Report on the Financial Statements of the Company for F.Y. 2023-24 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

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 31st March 2024, the Company has accumulated losses of Rs. 6,892.16 crore as against capital and reserves of Rs. 5,217.92 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 with a view to pay off its outstanding dues to lenders/vendors. The Company's current liabilities [including outstanding portion of Foreign Currency Convertible Bonds (FCCB) which have fallen due for redemption] exceeds its current assets.

The company has monetized its assets in the past and settled most of lenders also. The management is exploring various business opportunities for a future business. The Company has earned operating income by way of hire charges and management fees and is taking steps to rectify the mismatch in working capital.

2. The Company has certain significant open legal proceedings 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 2023-24, some of the legal cases were settled.

3. Note No. 9(A) of the Standalone Financial Statements relating to the FCCB amounting to Rs. 1,537.62 crore which have become due for repayment on August 24, 2023. During the year, the Company has made partial repayment of FCCBs to the tune of Rs.1003.45 crore by availing shortterm loan. The balance amount of Rs. 534.17 crore, which has fallen due for repayment, is outstanding as at March 31, 2024.

The Company has made full settlement of balance outstanding FCCBs in FY 2024-25 by availing loan from another Companies.

4. Note No. 6(C) of the Standalone Financial Statements relating to write off of Rs. 66.99 crore out of amount of Rs. 369.81 crore (including accrued interest up to March 31, 2018) receivable in respect of revenue recognised in the financial year 2017-18 and shown as an exceptional item based on compensation granted to the Company in the arbitration proceedings for breach of contract terms by a charterer.

Post the year end, the Company entered into a settlement agreement with the charterer under Vivad se Vishwas scheme under which 65% of the amount receivable including interest up to date will be received from the charterer. The balance irrecoverable amount of Rs. 66.99 crore has been written off and is shown as an Exceptional Item.

5. Note No. 6(B) and 11 of the Standalone Financial Statements relating to netting 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.

Application has been made to regulatory authority seeking prior approval to refund the advance taken from subsidiary company. The approval is awaited.

6. We draw attention to our observations in paragraph 3 above whereby, in spite of several factors mentioned therein, the results are prepared on "Going Concern" basis; in case of a subsidiary, the respective auditors have pointed out that the concerned financial statements results have been prepared on going concern basis, in view of the representation by the management that the Company has a positive net worth and management has plans to restart the operating activities in the near future.

The company has commenced providing consultancy services to related parties in the offshore drilling sector. It will continue to explore opportunities in the shipping and oilfields sector.

7. Note No. 9(A) of the Standalone Financial Results relating to recognition of gain on settlement with one of the banks in the preceding year. In the preceding year, the Company had settled the loan with the said bank and paid the dues through monetization of assets and recognized gain on settlement. Pending outstanding bank guarantee and pending group level settlement, ‘No Due Certificate' was not received from the said bank till March 31, 2023. Post settlement, the Bank assigned the said loan to an Asset Reconstruction Company (Assignee Company).

During the year, the pending bank guarantee has been closed. The Company does not expect any additional liability in this regard and is in the process of obtaining NOC from the Assignee Company.

8. In case of the Holding Company and two subsidiaries, borrowings from various lenders are subject to confirmation/reconciliation.

In case of the Holding Company and subsidiaries, the account were categorized as substandard and the bank does not accrue any interest on such loan it has granted. Accordingly, lender's confirmation is awaited.

9. The Financial Result of one subsidiary (which has been admitted to NCLT and undergoing CIRP Process) have not been consolidated during previous year, one of Indian sub-subsidiary got admitted to Corporate Insolvency Resolution Process (CIRP) and management of the company was taken over by Resolution Professional. The said subsidiary was not considered for consolidation purpose.

10. We draw attention to Note No.27 to the Consolidated Financial Statements wherein it is stated that:

• The Group has accumulated losses of Rs. 6,151.90 crore as against capital and reserves of Rs. 3,344.59 crore as on March 31,2024.

• 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 with a view 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 the case of a subsidiary, the said Company does not have any income from operations since FY 2018-19.

• In case of another subsidiary, the current liabilities of the said Company exceed its current assets and the said Company has a negative operating cash flows.

• In case of another 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 above factors give rise to material uncertainty related to the Group's ability to continue as a Going Concern.

The management is exploring business opportunity for a future business buildup including In-chartering in the shipping sector and deployment of offshore drilling rig. 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.

11. We draw attention to Note No. 4(E) of the Consolidated Financial Statements relating to write off of Rs. 66.99 crore out of amount of Rs. 369.81 crore (including accrued interest up to March 31, 2018) receivable in respect of revenue recognised in the financial year 2017-18 (shown as an exceptional item) based on compensation granted to the Company in the arbitration proceedings for breach of contract terms by a charterer.

Post the year end, the Company entered into a settlement agreement with the charterer under Vivad se Vishwas scheme under which 65% of the amount receivable including interest up to date will be received from the charterer. The balance irrecoverable amount of Rs. 66.99 crore has been written off and is shown as an Exceptional Item.

12. Attention is drawn to recognition of gain on settlement with one of the banks in the preceding year. In the preceding year, the Company had settled the loan with the said bank and paid the dues through monetisation of assets and recognised gain on settlement. Pending outstanding bank guarantee and pending group level settlement, ‘No Due Certificate' was not received from the said bank till March 31,2023. Post settlement, the Bank assigned the said loan to an Asset Reconstruction Company (Assignee Company).

During the year, the pending bank guarantee has been closed. The Company does not expect any additional liability in this regard and is in the process of obtaining NOC from the Assignee Company.

14. We draw attention to Note No.9 (A)(c) of the Consolidated Financial Results relating to the Foreign Currency Convertible Bonds (FCCB) amounting to Rs.1,537.62 which have become due for repayment on August 24, 2023. During the year, the Company has made partial repayment of FCCBs to the tune of Rs.1003.45 crores by availing a short-term loan. The balance amount of Rs. 534.17 crore, which has fallen due for repayment, is outstanding as at March 31,2024.

The Company has made full settlement of balance outstanding FCCBs in FY 2024-25 by availing loan from another Companies.

15. Attention is drawn to netting 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.

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 2023-2024. 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 2023-2024.

The Secretarial Audit Report for the financial year ended March 31, 2024 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 31,2023 and September 30, 2023, 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 requisite amount, and will be careful in future

2. Pursuant to regulation 18 (2)(b) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the quorum for audit committee shall be either two members or one third of the members of the audit committee, whichever

is greater, with atleast two independent directors; However audit committee meeting held on November 08, 2023 was attended by 2 (two) members i.e. one with Executive Director and other by Independent Director instead of 2 (two) independent director, Mr Suresh Ramamirtham an Independent Director and Chairman of the Audit committee requested for leave of absence due to medical reason.

- Due to Medical reasons Mr Suresh Ramamirtham, Independent Director could not attend the said meeting.

3. The Company had obligation towards redemption of Foreign Convertible Currency Bonds (FCCBs) of Rs. 1537.62 crores, the Company has made partial repayment of FCCBs to the tune of Rs.1003.45 crore. The balance amount of Rs. 534.17 crore, is due for repayment as at March 31, 2024. The Company is in the process of complying with the procedures in this regard.

- The Company is in the process of full settlement of balance outstanding FCCBs in FY 2024-25.

4. 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.

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. 2023-2024, 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, 2024 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 29^th 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 Income Tax Appeallate Tribunal (ITAT) has passed orders in favour of the company for four assessment year.

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

There was a dispute between the Company and a customer for non-payment of outstanding demurrage, the company went into the arbitration process for recovery of demurrage outstanding from 20th August 2021 to 28th June 2023, accordingly the interim order dated January 29, 2024 was passed in favour of the company. Post arbitration, has approached the Company for settlement of the case. The company agreed to settle the case at Rs. 40 lakhs as full and final settlement, payment of which was received by March 31,2024.

The Company and one of its customer was in dispute and the same was duly referred to Arbitration. The settlement order was passed under Arbitration on 7th February, 2024 basis which the parties agreed to settle the dispute. Upon settlement, the Company received an amount of Rs. 1.76 crores during FY 2024-25.

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. 1561.15 Lakhs

Foreign Exchanged Used (including cost of acquisition of ships, loan repayments, interest, operating expenses, etc.): Rs. 0

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 20232024 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:

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 or other Courts as on March 31,2024

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.