Notes to Accounts of Essar Shipping Ltd.

Mar 31, 2025

n) Provisions and Contingencies

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. Provisions are reviewed at each standalone balance sheet date and are adjusted
to reflect the current best estimate.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed
in the Notes to the Standalone Financial Statements.

Contingent assets are not recognised but disclosed when the inflow of economic benefits is probable. However, when the
realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

o) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market which can be accessed by the Company for the

asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly

or indirectly observable

• Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.

p) Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial
assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular
way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Trade
receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement

Subsequent measurement is determined with reference to the classification of the respective financial assets. Based on the
business model for managing the financial assets and the contractual cash flow characteristics of the financial asset, the
Company classifies financial assets as subsequently measured at amortised cost, Fair Value through Other Comprehensive
Income (FVTOCI) or Fair Value through Profit and Loss (FVTPL).

Financial Assets measured at amortised cost

Financial Assets such as trade and other receivables, security deposits and loans given are measured at the amortised cost
if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest
rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses
arising from impairment are recognised in the Statement of profit and loss.

Financial Assets measured at FVTOCI

A Financial Asset is classified as at the FVTOCI if both of the following criteria are met:

• The objective of the business model is achieved both by collecting contractual cash flows and selling the financial
assets, and

• The asset’s contractual cash flows represent SPPI.

Financial Assets included within the FVTOCI category are measured initially as well as at each reporting date at fair value.
Fair value movements are recognized in the Other Comprehensive Income (OCI).

Financial Assets measured at FVTPL

FVTPL is a residual category for Financial Assets excluding investments in subsidiary and associate companies. Any
Financial Asset, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at
FVTPL.

After initial measurement, any fair value changes including any interest income, foreign exchange gain and losses,
impairment losses and other net gains and losses are recognised in the Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are
classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI
or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial
recognition and is irrevocable.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the
Statement of Profit and loss.

Derecognition

A financial Asset is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either

a) The Company has transferred substantially all the risks and rewards of the asset, or

b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

On de-recognition, any gains or losses on all Financial Assets (other than Financial Assets measured at FVTOCI) and
equity investments (measured at FVTPL) are recognized in the Statement of Profit and Loss. Gains and losses in respect of

Financial Assets measured at FVTOCI and that are accumulated in OCI are reclassified to Statement of Profit And Loss on
de-recognition. Gains or losses on equity investments measured at FVTOCI that are recognized and accumulated in OCI
are not reclassified to Statements of Profit and Loss on de-recognition.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of
impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits,
trade receivables and bank balance.

b) Financial assets measured at FVTOCI.

In case of other assets (listed as a) above), the Company determines if there has been a significant increase in credit
risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an
amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

q) Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and
derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at FVTPL include financial liabilities designated upon initial recognition as at FVTPL.

For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI.
These gains/ loss are not subsequently transferred to Statement of Profit and Loss. However, the company may transfer the
cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the Statement of Profit
and Loss.

Financial liabilities at amortized cost

Financial liabilities classified and measured at amortised cost such as loans and borrowings are initially recognized at fair
value, net of transaction cost incurred. After initial recognition, financial liabilities are subsequently measured at amortised
cost using the Effective interest rate (EIR) method. Gains and losses are recognised in Statement of Profit and Loss when
the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
Statement of Profit and Loss.

Derivative financial instruments

The Company uses derivative financial instruments to manage the commodity price risk and exposure on account of
fluctuation in interest rate and foreign exchange rates. Such derivative financial instruments are initially recognized at fair
value on the date on which a derivative contract is entered into and are subsequently measured at fair value with changes
being recognized in Statement of Profit and Loss. Derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken through Statement of Profit and Loss.
Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption
amount is recognised in Statement of Profit and loss over the period of the borrowing using the effective interest
method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the
drawdown occurs.

The borrowings are removed from the Standalone balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or
transferred to another party and the consideration paid including any noncash asset transferred or liabilities assumed, is
recognised in Statement of Profit and Loss as other gains/(losses).

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability of
at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan arrangement
on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting
date, the Company does not classify the liability as current, if the lender agreed, after the reporting period and before the
approval of the financial statement for issue, not to demand payment as a consequence of the breach.

Foreign currency convertible bonds (FCCBs)

FCCBs are separated into liability and equity components based on the terms of the contract. On issuance of the FCCBs,
the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument.
This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished
on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and
included in equity since conversion option meets Ind AS 32 criteria for fixed to fixed classification. Transaction costs are
apportioned between the liability and equity components of the FCCBS based on the allocation of proceeds to the liability
and equity components when the instruments are initially recognised.

Offsetting of Financial Assets and Liabilities

In accordance with Ind AS 32, Financial Assets and Financial Liabilities are offset and the net amount is reported in the
standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy of the company, or the counterparty.

r) Taxes on income

Current tax is the amount of tax payable as per special provisions relating to income of shipping companies under the
Income Tax Act, 1961 on the basis of deemed tonnage income of the Company and tax payable on other taxable income
for the year determined in accordance with the applicable tax rates and provisions of the Income Tax Act, 1961 and other
applicable tax laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of
adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay
normal income tax. Accordingly, MAT is recognised as an asset in the Standalone balance sheet when it is highly probable
that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Standalone Balance
sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are
generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is
probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax
losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred
tax assets and deferred tax liabilities are off set, and presented as net.

Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement
of Profit and Loss.

Further, the Company is paying taxes on the basis of deemed tonnage income therefore there is no impact on deferred tax.

s) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including and excluding the post-tax effect of
exceptional items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings
per share is computed by dividing the profit / (loss) after tax (including and excluding the post-tax effect of exceptional items,
if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to
the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings
per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive
potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per
share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period presented. The number of equity shares and potentially
dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

t) Cash and Cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents includes cash on hand, deposit held
at call with financial institution, other short term, highly liquid investments with original maturities of 3 months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts. Bank Overdrafts are shown within borrowings in current liabilities in Standalone balance sheet.

u) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before exceptional items and tax is adjusted for
the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from operating, investing and financing activities of the Company are segregated based on the available
information.

v) Segment reporting

Operating segments are defined as components of an enterprise for which available discrete financial information is
evaluated based on a single operating segment “Shipping”, regularly by the chief operating decision maker, in deciding how
to allocate resources and assessing performance.

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the
basis of their relationship to the operating activities of the segment revenue is accounted on the basis of transactions which
are primarily determined based on market / fair value factors.

w) Exceptional items

When items of income or expense are of such nature, size or incidence that their disclosure is necessary to explain the
performance of the Company for the year, the Company makes a disclosure of the nature and amount of such items
separately under the head “Exceptional Items”.

Foot notes:-

Repayment terms:

a) Secured debentures: 8.25%, 2,50,00,000 unlisted debentures issued on 8 August 2024 redeemable as per agreed
terms. Debentures issued on preferential basis by conversion of outstanding secured loan into NCDs in one or more
tranches to the extent of '' 250 crores. The same is secured by pledge on the shares of foreign subsidiary companies,
charge on semi-submersible rig or asset proposed owned by above subsidiary company and any other security as may
be agreed between both parties.

b) Secured debentures: 1%, 6,00,00,000 unlisted debentures issued on 8 August 2024 redeemable as per agreed terms.
Debentures issued on preferential basis by conversion of outstanding secured loan into NCDs in one or more tranches
to the extent of '' 600 crores. The same is secured by charge over the Overseas Direct Investments in two overseas
subsidiaries and any other security as may be agreed between both parties. [Refer foot note (i) of Note 3].

c) Secured debentures: 1%, 3,20,00,000 unlisted debentures issued on 13 December 2023 were fully redeemed by the
company during the year.

d) Secured loan: During the preceeding year, the company has borrowed additional inter-corporate deposits from a group
company in order to redeem the FCCBs dues which were due as on 24 August, 2023. The intercorporate deposits received
were converted into Non Convertible Debentures to the extent of k 250 crores [refer foot note (c)]. Balance amount stands
outstanding in books of accounts and carry interest @ 8.25% p.a.The loan is secured by sale proceeds from investment
in overseas subsidiary companies. During the preceeding year, the company has borrowed loan from another company
for redeeming the FCCB dues. The loan received was converted into Non Convertible Debentures to the extent of k
850 crores [refer foot note (a) and (b)]. Balance amount stands outstanding in books of accounts and carry interest @
8.25% p.a. This loan is classified as current liability in the books of accounts. The loan is secured by sale proceeds from
investment in equity and preference shares of overseas subsidiary companies. [Refer foot note (i) of Note 3]

e) Unsecured debentures: 1%, 2,50,00,000 unlisted debentures issued on 8 August 2024 redeemable as per agreed
terms. Debentures issued on preferential basis by conversion of outstanding secured loan into NCDs in one or more
tranches to the extent of k 250 crores. The debentures are unsecured and unlisted.

f) Unsecured loan: During the year, the company availed unsecured loan from a company amounting k200 crores in order
to fund the repayment of secured loan [refer note (d)]. The loan was provided on urgent basis to enable the company to
honour its commitment to repay the secured loan on demand as per the terms.

g) The classification of loans between current liabilities and non - current liabilities continues based on repayment schedule
under respective agreements and on the basis of demands raised by banks & debenture holders.

h) Interest rates: Loans availed from the lenders carry a weighted average interest rate of 5.74% per annum (previous year:
5.00% per annum)

ii) Mortality rates considered are as per the published rates in the Indian Assured Lives Mortality (2012-14) Table. (Indian
Assured Lives Mortality (2006-08)) mortality table.

iii) Leave policy: Leave balance as at the valuation date and each subsequent year following the valuation date to the extent
not availed by the employee accrued till 31 December, 2014, is paid to the respective employees during the year.

iv) The contribution to be made by the Company for funding its liabilities for gratuity ( funded and non funded) and towards
provident fund during the financial year 2024-25 amounts to ^ 0.32 crore.

v) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over
entire life of the related obligation.

vi) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority,
promotion, supply and demand and other relevant factors.

vii) Liability on account of long term absences has been actuarially valued as per Projected Unit Credit Method.

viii) Short term compensated absences have been provided on actual basis.

(a) Interest Income on Claims receivable/ Write off of claims receivable

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 received 65% of original claim amount plus interest which was
accounted as exceptional item in the earlier year. Amount of interest estimated was ^45 crores. However, actual interest of
^44.97 crores was received by the company on SAIL award. Estimated amount of ^45 crore is reversed as exceptional loss
and actual interest received of ^44.97 crore is booked as exceptional income.

(b) Reversal of provision for impairment as per Ind AS 36 in the fair value of an associate based on management
assessment

The company have made provision for impairment on receivables from one of its foreign subsidiary company. During the
year, amount of ^ 32.15 crores are received against these receivables. Same is reversed from provision made and shown as
exceptional income.

(c) Reversal of Provision for impairment of loans & advances receivable from foreign subsidiary

The company have made provision for impairment on investment in one of its foreign subsidiary company. During the year,
the company entered into Sale Purchase Agreement for selling its entire stake in the shares of subsidiary company. Entire
amount of ^ 175.36 crores is reversed from provision made and shown as exceptional income [refer foot note (i) of Note 3].

(d) One Time Settlement charged paid to banks/ FIs

The company had settled the loan with the bank in earlier years and paid the dues through monetisation of assets and
recognised gain on settlement. Post settlement, the bank assigned the said loan to an Asset Reconstruction Company (ARC)
and the company was showing the liability as Contingent liabilities. Now during the quarter, the Company have paid ^ 0.60
crores to ARC agains the same as final settlement and received no due certificate from ARC company. The amount paid is
shown as an exceptional item.

(e) Provision for Impairment of loans and advances receivable from Subsidiary

During the year, the company has paid ^ 50 crore by way of One Time Settlement to lenders of a subsidiary company for
which the company was Guarantor. The company has additionally paid finance cost to one of the lenders amounting to ^
0.83 crore. The company has made Impairment provision for the amount receivable from this subsidiary because it is under
liquidation.

*Note: In case of Indian shipping companies, tax expense is computed based on the gross tonnage of the vessels for the
income subject to tonnage tax. In case of income not subject to tonnage tax, the same is calculated based on the taxable
profits calculated in accordance with the applicable tax laws. Effective tax rate calculated as per the Section 115BAA of the
Income Tax Act,1961.

21 Financial Instruments
(i) Capital management

The Company manages its capital to ensure that entities in the Company will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Company’s
overall strategy remains unchanged from the previous year. The capital structure of the company consists of debt, which
includes the borrowings including temporary overdrawn balance, cash and cash equivalents including short term bank
deposits, equity comprising issued capital, reserves and non-controlling interests. The gearing ratio for the year is as
under:

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

-Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.

-Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

-Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (unobservable inputs).

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions
were used to estimate the fair values:

a) Cash and short-term deposits, trade and other receivables, trade and other payables, and other current liabilities
approximate their carrying amounts largely due to the short-term maturities or nature of these instruments.

b) The fair value of loans from banks and other financial indebtedness as well as other non current financial liabilities is
estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities.

All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

(iii) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair
value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on
re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value
through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss.
Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement
inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value
of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(iv) Financial risk management objectives:

The Company’s principal financial liabilities comprise of loan from banks and financial institutions, finance lease obligations,
overdrafts and trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s
operations. The Company has various financial assets such as trade receivables, cash and short term deposits, which
arise directly from its operations.

The main risks arising from Company’s financial instruments are foreign currency risk, interest rate risk, credit risk and
liquidity risk. The Board of Directors review and agree policies for managing each of these risks.

The following table details the Company’s sensitivity to a 5% increase and decrease in the functional currency against the
relevant foreign currencies of all the companies in the Company. 5% is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below
indicates an increase in profit and other equity where the respective functional currency strengthens by 5% against the
relevant foreign currency. For a 5% weakening of the functional currency against the relevant currency, there would be an
equal and opposite impact on the profit and other equity, and the balances below would be negative.

(b) Interest rate risk:

The Company is exposed to interest rate risk as entities in the Company borrow funds at floating interest rates. The
interest rate risk is managed by monitoring the Company’s level of borrowings periodically and structuring its borrowings
on varying maturities and interest rate terms. The Company’s exposures to interest rates on financial assets and financial
liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates at the balance sheet date. For
floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was
outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s loss
for the year ended 31 March, 2025 would increase/decrease by '' 6.65 crore (previous year '' 4.52 crore). This is mainly
attributable to the Company’s exposure to interest rates on its variable rate borrowings.

(c) Commodity price risk:

The Company does not deal in commodities and hence the disclosure pursuant to SEBI Circular dated November 15,
2018 is not required to be given.

(d) Other price risk:

The Company is not exposed to any significant equity price risks arising from equity investments, as on 31 March 2025.
Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these
investments.

Equity price sensitivity analysis:

There is no exposure to equity price risks as at the reporting date or as at the previous reporting date.

(vi) Credit risk:

The credit risk is primarily attributable to the Company’s trade and other receivables and guarantees given by the Company
on behalf of others. The amounts presented in this standalone statement of financial position are net of allowances for
doubtful receivables, estimated by management based on prior experience and their assessment of the current economic
environment. The maximum related party credit exposure at 31 March, 2025 on account of carrying amount of advances
/deposit, trade and other receivables and guarantees is disclosed in note 27 on related party transactions. Based on the
creditworthiness of the related parties, financial strength of related parties and its parents and past history of recoveries
from them, the credit risk is mitigated.

Cash and cash equivalents are held with reputable and credit-worthy banks.

(vii) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried
at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains
and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as
being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone
statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it
is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than
derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial
cost) and subsequently carried at amortised cost.

(viii) Liquidity risk:

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate
liquidity risk management framework for the management of the Company’s short, medium and long-term funding and
liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.

The Company monitors its risk of shortage of funds using a recurring liquidity planning tool. This tool considers the
maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and
projected cash flows from operations, public offerings and refinancing of current borrowings.

Liquidity table:

The following tables detail the Company’s remaining contractual maturity for its financial liabilities. The tables have been
drawn up based on the cash flows of financial liabilities based on the earliest date on which the Company can be required
to pay:

In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options
under the Scheme titled “Essar Shipping Employee Stock options Scheme -2011” (hereafter named ESOS A).

The ESOS A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether
in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price
of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a
graded manner over a period of 5/4/3 years from the date of the grant in proportions specified in the Scheme. Options may be
exercised within 7 years from the date of vesting. The Company has issued the said ESOS in two tranches on November 2,
2011 and February 8, 2012 at an exercise price of '' 22.30 each, the market price of the shares on the grant date of the ESOS
was '' 22.30 per share and ''31.30 per share respectively.

28 Going Concern

As on 31 March 2025, the net worth of the Company is eroded as it is incurring operating losses since last several years.
The Company has accumulated losses of '' 6,520.75 crore as against share capital and reserves of '' 5217.75 crore and the
Company''s current liabilities exceeds its current assets.The Company has given Tug on Bare-boat charter basis and earned
operating income from the same. Further, the Company is also providing Management service to its Subsidiary Company
during the year. Also the Company is taking steps to rectify the mismatch between current assets and liabilities during the
year. In view of these, the Financials have been prepared on a Going Concern basis.

29 Expenditure on corporate social responsibility (CSR)

In pursuance of the provisions of the Companies Act, 2013, the Company is required to spend two percent of the average net
profits for the three immediately preceding financial years towards CSR activities. Due to the occurrence of net losses in the
three preceding financial years, the Company is not required to spend any amount on CSR.

30 Subsequent event

Post the year end, the company has received balance consideration of USD 8.4 Mn towards investment in shares of Energy
II Limited and the entire stake sale is concluded. Trasnfer of shares in the name of the buyer and RBI compliances are under
process.

31 Other Statutory Disclosure

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or
kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether
recorded in writing or otherwise) that the Intermediary shall, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee,
security or the like to or on behalf of the Ultimate Beneficiaries.

32 The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the company shall (i) Directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii)
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

33 The Company is not declared a wilful defaulter by any bank or financial institution or other lenders.

34 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

35 The Company does not have any transaction that are not recorded in the books of account that has been surrendered or

disclosed as income during the year in the tax assessments under the Income Tax Act, 1961

36 There are no proceedings initiated or pending for holding any benami property under the Benami Transaction (Prohitition)
Act, 1988

37 There is no Investment Property held by Company.

38 The Company has neither traded in nor holds Crypto Currency or Virtual Curency during the year.

39 During the current year, the company has not made any Loans or advances in the nature of Loans are granted to Promoters,

Directors, KMPs and the related parties (as define under Companies Act, 2013) either severally or jointly with any other
person, that are: (a) repayable on demand: or (b) without specifying any term or period of repayment.

40 The Company does not have any transaction with companies struck off under section 248 of the Company Act 2013, or
section 560 of Companies Act, 1956.

41 During the Year, Company has not taken any term loan from any bank of financial Institutions.

43 The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year’s
classification / disclosure.

As per our attached report of even date For and on behalf of the Board

For C N K & Associates LLP Rajesh Desai R Suresh

Chartered Accountants Director Director

Firm Registration No. : 101961 W/W-100036 (DIN: 08848625) (DIN: 09299459)

Diwakar Sapre Vipin Jain Bharat Modi

Partner Chief Financial Officer Company Secretary

Membership No. 040740 Membership No. A67152

Mumbai Mumbai

29 May, 2025 29 May, 2025

---

Mar 31, 2024

n) Provisions and Contingencies

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each standalone balance sheet date and are adjusted to reflect the current best estimate.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of

the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Standalone Financial Statements.

Contingent assets are not recognised but disclosed when the inflow of economic benefits is probable. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

o) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market which can be accessed by the Company for the

asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

p) Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement

Subsequent measurement is determined with reference to the classification of the respective financial assets. Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset, the Company classifies financial assets as subsequently measured at amortised cost, Fair Value through Other Comprehensive Income (FVTOCI) or Fair Value through Profit and Loss (FVTPL).

Financial Assets measured at amortised cost

Financial Assets such as trade and other receivables, security deposits and loans given are measured at the amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the Statement of profit and loss.

Financial Assets measured at FVTOCI

A Financial Asset is classified as at the FVTOCI if both of the following criteria are met:

• The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

• The asset’s contractual cash flows represent SPPI.

Financial Assets included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI).

Financial Assets measured at FVTPL

FVTPL is a residual category for Financial Assets excluding investments in subsidiary and associate companies. Any Financial Asset, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

After initial measurement, any fair value changes including any interest income, foreign exchange gain and losses, impairment losses and other net gains and losses are recognised in the Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and loss.

Derecognition

A financial Asset is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either

a) The Company has transferred substantially all the risks and rewards of the asset, or

b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition, any gains or losses on all Financial Assets (other than Financial Assets measured at FVTOCI) and equity investments (measured at FVTPL) are recognized in the Statement of Profit and Loss. Gains and losses in respect of Financial Assets measured at FVTOCI and that are accumulated in OCI are reclassified to Statement of Profit And Loss on de-recognition. Gains or losses on equity investments measured at FVTOCI that are recognized and accumulated in OCI

are not reclassified to Statements of Profit and Loss on de-recognition.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

b) Financial assets measured at FVTOCI.

In case of other assets (listed as a) above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

q) Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at FVTPL include financial liabilities designated upon initial recognition as at FVTPL.

For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to Statement of Profit and Loss. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the Statement of Profit and Loss.

Financial liabilities at amortized cost

Financial liabilities classified and measured at amortised cost such as loans and borrowings are initially recognized at fair value, net of transaction cost incurred. After initial recognition, financial liabilities are subsequently measured at amortised cost using the Effective interest rate (EIR) method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Derivative financial instruments

The Company uses derivative financial instruments to manage the commodity price risk and exposure on account of

fluctuation in interest rate and foreign exchange rates. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value with changes being recognized in Statement of Profit and Loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken through Statement of Profit and Loss. Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption amount is recognised in Statement of Profit and loss over the period of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the drawdown occurs.

The borrowings are removed from the Standalone balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid including any noncash asset transferred or liabilities assumed, is recognised in Statement of Profit and Loss as other gains/(losses).

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability of at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the Company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statement for issue, not to demand payment as a consequence of the breach.

Foreign currency convertible bonds (FCCBs)

FCCBs are separated into liability and equity components based on the terms of the contract. On issuance of the FCCBs, the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity since conversion option meets Ind AS 32 criteria for fixed to fixed classification. Transaction costs are apportioned between the liability and equity components of the FCCBS based on the allocation of proceeds to the liability and equity components when the instruments are initially recognised.

Offsetting of Financial Assets and Liabilities

In accordance with Ind AS 32, Financial Assets and Financial Liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company, or the counterparty.

r) Taxes on income

Current tax is the amount of tax payable as per special provisions relating to income of shipping companies under the Income Tax Act, 1961 on the basis of deemed tonnage income of the Company and tax payable on other taxable income for the year determined in accordance with the applicable tax rates and provisions of the Income Tax Act, 1961 and other applicable tax laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Standalone balance sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Standalone Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is

probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.

Further, the Company is paying taxes on the basis of deemed tonnage income therefore there is no impact on deferred tax.

s) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including and excluding the post-tax effect of exceptional items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including and excluding the post-tax effect of exceptional items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

t) Cash and Cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents includes cash on hand, deposit held at call with financial institution, other short term, highly liquid investments with original maturities of 3 months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank Overdrafts are shown within borrowings in current liabilities in Standalone balance sheet.

u) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before exceptional items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

v) Segment reporting

Operating segments are defined as components of an enterprise for which available discrete financial information is evaluated based on a single operating segment “Shipping”, regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance.

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

w) Exceptional items

When items of income or expense are of such nature, size or incidence that their disclosure is necessary to explain the performance of the Company for the year, the Company makes a disclosure of the nature and amount of such items separately under the head “Exceptional Items”.

Foot notes:-Repayment terms:

a) Secured debentures: 1%, 3,20,00,000 debentures issued on 13 December 2023 were redeemable at the option of issuer. Debentures issued on preferential basis by conversion of outstanding unsecured loan into NCDs in one or more tranches to the extent of '' 320 crores. The same is secured by Arbitration award amount receivable from SAIL. In the subsequent year, the company entered into One Time Settlement agreement under Vivaad Se Vishwas Scheme with SAIL wherein the Arbitration award amount was settled at 65% of award amount which is approximately '' 302 crores. Basis the settlement and mutual agreement with debenture holders, debentures upto '' 302 crores will be secured against SAIL Arbitration award and balance '' 18 crores will remain unsecured.

b) Rupee Term Loans from others: During the year, two group companies were merged with another group company. The intercorporate deposits received from all the three group companies were converted into Non Convertible Debentures to the extent of '' 320 crores [refer foot note (a)]. Balance amount stands outstanding in books of accounts. Further, the Company has borrowed additional loan from the merged entity in order to redeem the FCCBs dues which were due as on 24 August, 2023. The loan is secured by sale proceeds from investment in equity shares of Energy II Limited and Essar Shipping DMCC. During the year, the Company has borrowed loan from another company for redeeming the FCCB dues. This loan is classified as current liability in the books of accounts. The loan is secured by sale proceeds from investment in equity and preference shares of OGD Services Holdings Limited. [Refer foot note (ii) of Note 3]

c) Foreign currency convertible bonds: FCCBs of US$ 128,571,429 (Series A) due on 24 August, 2015 and US$ 111,428,571 (Series B) due on 24 August, 2017 - repayment extended by Bond Holder till 24 August, 2023, carry interest @ 5% per annum payable semi annually. The company has not sought any extension from the Bond Holder after the due date. The company has made partial repayment of FCCBs to the tune of ''1,003.45 crores, which was due for repayment, by availing loans from companies. [Refer foot note (b)].

d) The classification of loans between current liabilities and non - current liabilities continues based on repayment schedule under respective agreements and on the basis of demands raised by banks & debenture holders.

e) Interest rates: Loans availed from the lenders carry a weighted average interest rate of 5.00% per annum (previous year: 22.56% per annum)

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

-Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

-Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

-Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a) Cash and short-term deposits, trade and other receivables, trade and other payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities or nature of these instruments.

b) The fair value of loans from banks and other financial indebtedness as well as other non current financial liabilities is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities.

All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

(iii) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(iv) Financial risk management objectives:

The Company''s principal financial liabilities comprise of loan from banks and financial institutions, finance lease obligations, overdrafts and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short term deposits, which arise directly from its operations.

The main risks arising from Company''s financial instruments are foreign currency risk, interest rate risk, credit risk and liquidity risk. The Board of Directors review and agree policies for managing each of these risks.

(v) Market risk:

(a) Foreign currency risk:

Foreign currency risk mainly arises from transactions undertaken by an operating unit denominated in currencies other than its functional currency. Exposure to foreign currency risk is partly mitigated by natural hedges of matching revenues and costs.

(b) Interest rate risk:

The Company is exposed to interest rate risk as entities in the Company borrow funds at floating interest rates. The interest rate risk is managed by monitoring the Company''s level of borrowings periodically and structuring its borrowings on varying maturities and interest rate terms. The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates. If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s loss for the year ended 31 March, 2024 would increase/decrease by '' 4.52 crore (previous year '' 2.05 crore). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings

(c) Commodity price risk:

The Company does not deal in commodities and hence the disclosure pursuant to SEBI Circular dated November 15, 2018 is not required to be given.

(d) Other price risk:

The Company is not exposed to any significant equity price risks arising from equity investments, as on 31 March 2024. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.

Equity price sensitivity analysis:

There is no exposure to equity price risks as at the reporting date or as at the previous reporting date.

(vi) Credit risk:

The credit risk is primarily attributable to the Company''s trade and other receivables and guarantees given by the Company on behalf of others. The amounts presented in this standalone statement of financial position are net of allowances for doubtful receivables, estimated by management based on prior experience and their assessment of the current economic environment. The maximum related party credit exposure at 31 March, 2024 on account of carrying amount of advances / deposit, trade and other receivables and guarantees is disclosed in note 27 on related party transactions. Based on the creditworthiness of the related parties, financial strength of related parties and its parents and past history of recoveries from them, the credit risk is mitigated.

Cash and cash equivalents are held with reputable and credit-worthy banks.

(vi) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(vii) Liquidity risk:

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company''s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company monitors its risk of shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and projected cash flows from operations, public offerings and refinancing of current borrowings.

Liquidity table:

The following tables detail the Company''s remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the cash flows of financial liabilities based on the earliest date on which the Company can be required to pay:

In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled “Essar Shipping Employee Stock options Scheme -2011” (hereafter named ESOS A).

The ESOS A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 5/4/3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 7 years from the date of vesting. The Company has issued the said ESOS in two tranches on November 2, 2011 and February 8, 2012 at an exercise price of '' 22.30 each, the market price of the shares on the grant date of the ESOS was '' 22.30 per share and ''31.30 per share respectively.

The difference between the market price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

Since the period of ESOP scheme has been expired the Company has already passed a Board resolution to close the trust and the Company is in process of the same.

27 Related party relationships, transactions and balances: (as per IND-AS 24) a) Holding companies

i) Essar Global Fund Limited , Cayman Island, ultimate holding company

28 Going Concern

As on 31 March 2024, the net worth of the Company is eroded as it is incurring operating losses since last several years. The Company has accumulated losses of '' 6,892.16 crore as against share capital and reserves of '' 5217.92 crore and the Company''s current liabilities exceeds its current assets.The Company has given Tug on Bare-boat charter basis and earned operating income from the same. Further, the Company is also providing Management service to its Subsidiary Company during the year. Also the Company is taking steps to rectify the mismatch between current assets and liabilities during the year. In view of these, the Financials have been prepared on a Going Concern basis.

29 Expenditure on corporate social responsibility (CSR)

In pursuance of the provisions of the Companies Act, 2013, the Company is required to spend two percent of the average net profits for the three immediately preceding financial years towards CSR activities. Due to the occurrence of net losses in the three preceding financial years, the Company is not required to spend any amount on CSR.

30 Subsequent event

Post the year end, 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 '' 66.99 crores has been charged to Profit & Loss account as on 31st March, 2024 as an exceptional item.

The Company has booked income of '' 1.76 crores receivable from Poompuhar Shipping and '' 0.40 crores from Sai and Sameer Associates as full and final settlement. Bothe the amounts are received in the subsequent year.

During the year, Company has received an advance sum of '' 2.5 lakhs as token money for the sale of plot and flat of the company. In the subsequent year, amount of '' 16 lakhs is received in addition to the advance against sale of plot. The Company is in the process of entering into the sale agreement with customer in order to sell the plot and flat.

31 Other Statutory Disclosure

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

32 The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

33 The Company is not declared a wilful defaulter by any bank or financial institution or other lenders.

34 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

35 The Company does not have any transaction that are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961

There are no proceedings initiated or pending for holding any benami property under the Benami Transaction (Prohitition)

³⁶ Act, 1988

37 There is no Investment Property held by Company.

38 The Company has neither traded in nor holds Crypto Currency or Virtual Curency during the year.

During the current year, the company has not made any Loans or advances in the nature of Loans are granted to Promoters,

39 Directors, KMPs and the related parties (as define under Companies Act, 2013) either severally or jointly with any other person, that are: (a) repayable on demand: or (b) without specifying any term or period of repayment.

40 The Company does not have any transaction with companies struck off under section 248 of the Company Act 2013, or section 560 of Companies Act, 1956.

41 During the Year, Company has not taken any term loan from any bank of financial Institutions.

43 The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

As per our attached report of even date For and on behalf of the Board

R Suresh

For C N K & Associates LLP Rajesh Desai

Chartered Accountants Director Director

Firm Registration No. : 101961 W/W-100036 (DIN: 08848625) (DIN: 09299459)

Diwakar Sapre Vipin Jain Rachana Trivedi

Partner Chief Financial Officer Company Secretary

Membership No. 040740 Membership No. ACS 62289

Mumbai Mumbai

28th May, 2024 28th May, 2024

---

Mar 31, 2023

Recognition of revenue amounting to '' 369.81 crore (including accrued interest up to 31st March 2018) in the financial year 2017-18, based on compensation granted to the Company in the arbitration proceedings for breach of contract terms by a charterer out of which '' 305.81 crore remains outstanding receivable as on 31st March 2023. The Company is confident of full recovery of its claims. However, pending conclusion of the said proceedings, no interest is accrued on the same for the period 1st April 2018 till 31st March 2023. The balance of '' 4.23 crores denotes excess amount paid to the bank at the time of settlement last financial year, which is receivable as per the Company.

Terms and rights attached to equity shares

The Company has only one class of equity shares having par value of '' 10/- per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Debenture Redemption Reserve

The Company has fully settled/ redeemed the debentures during the year and hence the Debenture Redemption Reserve of '' 101.17 crore and hence has been transferred to General Reserve.

Share options outstanding reserve

This reserve contains the intrinsic value of unvested employee stock options.

Securities Premium

The amount received in excess of face value of the Equity shares is recognised in Securities Premium. In case of Equity -Settled share based payment transactions, the difference between fair value on grant date and nominal value of shares is accounted as Securities Premium.

General reserve

These were transferred to the Company at the time of its demerger from Essar Shipping Ports & Logistics Limited.

Retained earnings

Retained earnings are the profits/ (losses) that the Company has earned/ incurred till date, less any transfer to General Reserve, Tonnage Tax Reserve, Dividend, Debenture Redemption Reserves or other distribution to Shareholders.

Other Comprehensive Income

These are actuarial gains / (losses) on employee benefit obligations.

Repayment terms:

a) Secured debentures: 2,000 Non-Convertible Debentures issued on 25 March 2010 and 5,000 debentures issued on 22 June 2009 were redeemable at the expiry of 10 years with put and call option exercisable after five years from their respective dates of issue. In an earlier year, the Company had received notice from the debenture holder invoking the put option. During the preceding year, the Company had paid an amount of '' 10 crores and the debenture holder had withdrawn '' 82.24 crores from the deposit placed with the Bombay High Court after taking approval from the Bombay High Court. During the year, the Company has entered into One Time Settlement (OTS) with the debenture holder and has settled the total dues on payment of '' 336.50 crores. Accordingly, on receipt of No Dues certificate, an amount of '' 1318.21 crores, comprising of principal amount of '' 271.26 crores and accrued interest of '' 1046.95 crores, being the gain on OTS, has been shown as Exceptional Income (Refer Note 18). The Company has filed the satisfaction of the charges in this regard.

b) Secured debentures: 100 debentures issued on 22nd June 2012 were redeemable at the expiry of five years from the date of issue. In an earlier year, the lender had sent the loan recall notice due to delay in debt servicing. During the year, the Company has repaid the principal amount due and has applied for waiver of the interest for amount outstanding.

c) Rupee Term Loans from Banks: The Company has settled the loan with the lender bank by monetising the security offered under the facility. As the Company has completed the agreed milestones as per One Time Settlement (OTS), although the Company has not received the no due certificate, the Company has accounted '' 340.80 crores, comprising of principal of '' 177.91 crores and interest of '' 162.89 crores, being the gain on OTS and the same has been shown as Exceptional Income (Refer Note 18). The Lender has given Bank Guarantee, against which the Company has withdrawn amount from the High Court of Mumbai against deposit done by SAIL towards arbitration award. The Lender has informed vide their letter dated 2nd January 2023 that they have assigned/sold loan exposure aggregating to an Asset Construction Company. The Company is in the process of fliing the satisfaction of the charges in this regard.

d) Rupee Term Loans from Others: During the year, the Company has accounted '' 35.40 crores, comprising of principal of '' 25 crores and interest of '' 10.4 crores, being the Exceptional Income (Refer Note 18) as the lender has gone into liquitation and no claim received till date. Further, the Company expect that no claim will come in future. The Company is in the process of fliing the satisfaction of the charges in this regard and charge is still name of the Original Lender.

e) Foreign currency convertible bonds:i) FCCBs of US$ 128,571,429 (Series A) due on 24 August, 2015 and US$ 111,428,571 (Series B) due on 24 August, 2017 - repayment extended by Bond Holder till 24 August, 2023 (subject to the approval from Reserve Bank of India), carry interest @ 5% per annum payable semi annually. The FCCBs are convertible into 122,852,787 fully-paid equity shares of '' 10 each of the Company, any time upto the date of maturity, at the option of the FCCB holders at conversion price of '' 91.70 per share at a predetermined exchange rate of '' 46.94 per US$. The FCCBs, if not converted till the maturity date, will be redeemed at par. The FCCB liability has been freezed vide letter dated August 31, 2017 at Rs. 1537.62 crores.

f) The classification of loans between current liabilities and non - current liabilities continues based on repayment schedule under respective agreements and on the basis of demands raised by banks & debenture holders.

g) Interest rates: Loans availed from banks, financial institutions, NBFC’s and Alternate Investment Funds carry a weighted average interest rate of 22.56% per annum (previous year: 14.81% per annum)

I. Details of retirement benefits:

The employees of the Company are members of a state - managed retirement benefit plans namely provident fund, pension fund, gratuity fund and superannuation fund operated by the Government of India. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the company with respect to the retirement benefit plan is to make the specified contributions.

II. Defined benefit plans

The company operates funded gratuity, non funded gratuity and funded provident fund plan for qualifying employees. Under the plans the employees are entitled to retirement benefits depending upon the number of years of service rendered by them subject to minimum specified number of years of service. No other post retirement benefits are provided to these employees. Contribution to provident fund (office staff and offshore officers).

The actuarial valuation of plan assets and the present value of defined benefit obligation were carried out at March 31,2023 by the certified actuarial valuer. The present value of the defined benefit obligation, related current service cost and past service cost were measured using the projected unit credit method.

Risk exposure- asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments % which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit.

ii) Mortality rates considered are as per the published rates in the Indian Assured Lives Mortality (2012-14) Table. (Indian Assured Lives Mortality (2006-08)) mortality table.

iii) Leave policy: Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the employee accrued till 31 December, 2014, is available for encashment on separation from the Company up to a maximum of 120 days.

iv) The contribution to be made by the Company for funding its liabilities for gratuity ( funded and non funded) and towards provident fund during the financial year 2022-23 amounts to '' 0.29 crore.

v) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

vi) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion, supply and demand and other relevant factors.

vii) Liability on account of long term absences has been actuarially valued as per Projected Unit Credit Method.

viii) Short term compensated absences have been provided on actual basis.

The impairment of Company’s receivable from Indian subsidiary company, as per Ind AS 36 “Impairment of assets”, is evaluated by the Management and the process of validating various operational assumptions impacting the estimated future cash flows from certain subsidiary company and consequent effect on the investments. Further the same subsidiary company has admitted Corporate Insolvency Resolution Process (CIRP) and recovery of the money is not foresseable and hence the net impairment of '' 13.19 crores provided during the year.

For Gain from One Time Settlement of Loan , please refer Foot Note (a) of Note 9 (A) - Borrowings.

*Note: In case of Indian shipping companies, tax expense is computed based on the gross tonnage of the vessels for the income subject to tonnage tax. In case of income not subject to tonnage tax, the same is calculated based on the taxable profits calculated in accordance with the applicable tax laws. Effective tax rate calculated as per the Section 115BAA of the Income Tax Act,1961.

Fair value measurements recognised in the Balance sheet:

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

-Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

-Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

-Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a) Cash and short-term deposits, trade and other receivables, trade and other payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities or nature of these instruments.

b) The fair value of loans from banks and other financial indebtedness as well as other non current financial liabilities is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities.

All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

(iii) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(iv) Financial risk management objectives:

The Company’s principal financial liabilities comprise of loan from banks and financial institutions, finance lease obligations, overdrafts and trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables, cash and short term deposits, which arise directly from its operations.

The main risks arising from Company’s financial instruments are foreign currency risk, interest rate risk, credit risk and liquidity risk. The Board of Directors review and agree policies for managing each of these risks.

(v) Market risk:

(a) Foreign currency risk:

Foreign currency risk mainly arises from transactions undertaken by an operating unit denominated in currencies other than its functional currency. Exposure to foreign currency risk is partly mitigated by natural hedges of matching revenues and costs.

The following table details the Company’s sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies of all the companies in the Company. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit and other equity where the respective functional currency strengthens by 5% against the relevant foreign currency. For a 5% weakening of the functional currency against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.

(b) Interest rate risk:

The Company is exposed to interest rate risk as entities in the Company borrow funds at floating interest rates. The interest rate risk is managed by monitoring the Company’s level of borrowings periodically and structuring its borrowings on varying maturities and interest rate terms. The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s loss for the year ended 31 March, 2023 would increase/decrease by '' 2.05 crore (previous year '' 5.95 crore). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings

(c) Commodity price risk:

The Company does not deal in commodities and hence the disclosure pursuant to SEBI Circular dated November 15, 2018 is not required to be given.

(d) Other price risk:

The Company is not exposed to any significant equity price risks arising from equity investments, as on 31 March 2023. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.

Equity price sensitivity analysis:

There is no exposure to equity price risks as at the reporting date or as at the previous reporting date.

(vi) Credit risk:

The credit risk is primarily attributable to the Company’s trade and other receivables and guarantees given by the Company on behalf of others. The amounts presented in this standalone statement of financial position are net of allowances for doubtful receivables, estimated by management based on prior experience and their assessment of the current economic environment. The maximum related party credit exposure at 31 March, 2023 on account of carrying amount of advances / deposit, trade and other receivables and guarantees is disclosed in note 27 on related party transactions. Based on the creditworthiness of the related parties, financial strength of related parties and its parents and past history of recoveries from them, the credit risk is mitigated.

Cash and cash equivalents are held with reputable and credit-worthy banks.

(vi) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(vii) Liquidity risk:

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company monitors its risk of shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and projected cash flows from operations, public offerings and refinancing of current borrowings.

Liquidity table:

The following tables detail the Company’s remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the cash flows of financial liabilities based on the earliest date on which the Company can be required to pay:

22	Contingent liabilities (to the extent not provided for)
a)	Claims against the company not acknowledged as debts		As at 31 March, 2023	As at 31 March, 2022
			'' in crore	'' in crore
	Income tax demand- appeal filed by the company with Commissioner of Income tax - Appeals and Income Tax Appeallate Tribunal			156.20
	Income tax demand - appeal filed by the Income tax department in the High court of Bombay against the orders of Appellate Tribunal in favour of the Company		39.09	39.09
	Bank Guarantee issued by the Bank		67.20	-
	Demand Loan of Bank due to SBLC invocation		338.32	-
b)	Others	Purpose for which the Guarantee is	As at 31 March, 2023	As at 31 March, 2022
		proposed to be utilised by the recipient	'' in crore	'' in crore
	Corporate guarantees on behalf of subsidiaries & associates
	A) OGD Services Limited, India	Corporate guarantee given for subsidiary Debts	878.49	905.33
	B) Varada Drilling One Pte Ltd, Singapore and Varada Drilling Two Pte Limited, Singapore	Corporate guarantee given for subsidiary Debts		227.42
			878.49	1,132.75

23 Segment reporting

a) Business segment

The Company has only one reportable primary business segment of fleet operating and chartering.

b) Geographical segment

The Company’s fleet operations are managed on a worldwide basis from India. The revenue from operations are identified as geographical segment based on location of customers:

26 Employee Stock Option Scheme

In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled “Essar Shipping Employee Stock options Scheme -2011” (hereafter named ESOS A).

The ESOS A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 5/4/3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 7 years from the date of vesting. The Company has issued the said ESOS in two tranches on November 2, 2011 and February 8, 2012 at an exercise price of '' 22.30 each, the market price of the shares on the grant date of the ESOS was '' 22.30 per share and ''31.30 per share respectively.

The difference between the market price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

Since the period of ESOP scheme has been expired the Company has already passed a Board resolution to close the trust and the Company is in process of the same.

28 Going Concern

As on 31 March 2023, the net worth of the Company is eroded as it is incurring losses since last several years. The Company has accumulated losses of '' 6,821.80 crore as against share capital and reserves of '' 5,011.35 crore and the Company’s current liabilities exceeds its current assets. The Company has purchased one Tug during the current financial year and given on Bare-boat charter basis to the Customer. In view of these, the Financials have been prepared on a Going Concern basis.

29 Expenditure on corporate social responsibility (CSR)

In pursuance of the provisions of the Companies Act, 2013, the Company is required to spend two percent of the average net profits for the three immediately preceding financial years towards CSR activities. Due to the occurrence of net losses in the three preceding financial years, the Company is not required to spend any amount on CSR.

30 Subsequent event

The Company has settled the one of the Financial Institution (Lender) under the One Time Settlement (OTS).

31 Other Statutory Disclosure

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

32 The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

33 The Company is not declared a wilful defaulter by any bank or financial institution or other lenders.

34 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

35 The Company does not have any transaction that are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961

36 There are no proceedings initiated or pending for holding any benami property under the Benami Transaction (Prohitition) Act, 1988

37 There is no Investment Property held by Company.

38 The Company has neither traded in nor holds Crypto Currency or Virtual Curency during the year.

39 During the current year, the company has not made any Loans or advances in the nature of Loans are granted to Promoters, Directors, KMPs and the related parties (as define under Companies Act, 2013) either severally or jointly with any other person, that are: (a) repayable on demand: or (b) without specifying any term or period of repayment.

40 The Company does not have any transaction with companies struck off under section 248 of the Company Act 2013, or section 560 of Companies Act, 1956.

41 During the Year, Company has not taken any term loan from any bank of financial Institutions.

The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year’s 43 classification / disclosure.

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Mar 31, 2018

1. CORPORATE INFORMATION

Essar Shipping Limited ("the Company") was incorporated in September 2010 and is listed on the Bombay Stock Exchange and National Stock Exchange in India. The Company is mainly engaged in fleet operating and chartering activities and operates international and coastal voyages. The Company has also directly and/or through its subsidiaries and associates invested in diverse business verticals viz. Fleet operating and chartering (tankers and dry bulkers), Oilfields services (land rigs and semi-submersible rig) and logistics services (trucks, trailers and tippers). The place of business of the Company is in Mumbai, India.

(i) Leased assets

The lease term in respect of assets acquired under finance leases expires within 10 years. Refer Note 22 for terms of leasing arrangements and related disclosures.

(ii) Water treatment plant

Gross block of plant and equipment includes a water treatment plant of Rs. 38.84 crores (previous year: Rs.38.84 crore) given on lease. The net book value is Rs. Nil (previous year: Rs. Nil).

(iii) Assets given as security for borrowings

Fleet and Land owned by the Company have been given to lenders as security for various borrowing facilities.

(iv) Impairment testing for fleet

In view of pertinent slowdown in shipping industry, the Company has assessed ‘recoverable amount’ of each fleet by estimating their “value in use”, in terms of IND-AS 36 “Impairment of Assets”. ‘Value in use'' is estimated by applying appropriate discount rate to projected net cash inflows having regard to existing long term contracts, expected tariff based on past trends and costs to operate the fleet which represents the management’s best estimate of the set of economic conditions that will exist over remaining useful life of each fleet. Based on the aforementioned assessment, it has been concluded that ‘recoverable amount’ of the fleet is higher than their respective carrying amount.

Foot notes:

* 100% equity shares of Essar Shipping DMCC have been pledged with Mashreq Bank for SBLC facility availed by Essar Shipping DMCC.

** 49% shares have been pledged in favour of IDBI Trusteeship Services Limited towards security for secured non convertible debentures of Rs.700 crore.

*** The terms of preference shares issued by Essar Oilfield Services India Limited have been changed from 14.5% optionally convertible cumulative (redeemable) participating preference shares to 0.01% compulsory convertible preference shares of Rs.10/- each on 31st March, 2018.

Terms and rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10/- per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note:

Shares reserved for issue under options

(i) The Company had reserved issuance of 3,77,463 equity shares of Rs.10 each for offering to eligible employees of the Company and its subsidiaries under Employees Stock Options Scheme (ESOS) (Refer note 28 for details)

(ii) 2,800 Foreign Currency Convertible Bonds (FCCB) are convertible into 122,852,787 equity shares (previous year 122,852,787 equity shares) of Rs. 10/- each Refer foot note (f) to note 10(a) for details.

Debenture Redemption Reserve

In terms of rule 18(7) of the Companies (Share Capital and Debentures) Rules 2014, the Company is required to create a Debenture Redemption Reserve (DRR) of Rs.185 crores (previous year: Rs.185 crores) in respect of debentures issued and outstanding as on 31st March, 2018. However, in view of continuous losses, the Company has not created such DRR.

Share options outstanding reserve

This reserve contains the intrinsic value of unvested employee stock options

Tonnage tax (utilised) and Tonnage tax reserve

These reserves are mandatory under the Income Tax Act, 1961 for companies who opt for the Tonnage Tax scheme prescribed under the said Act.

General reserve

These were transferred to the Company at the time of its demerger from Essar Shipping Ports & Logistics Limited Foreign Currency Monetary Items Translation Differences Account or FCMITDA Foreign currency losses relating to monetary items denominated in foreign currencies are accumulated in the FCMITDA and amortised over the term of the related monetary liabilities.

Other items of comprehensive income

These are actuarial gains / (losses) on employee benefit obligations

Foot notes:-

i) Repayment terms:

a) Secured debentures: 2,000 debentures issued on 25th March 2010 and 5,000 debentures issued on 22nd June 2009 are redeemable at the expiry of 10 years with put and call option exercisable after five years from their respective dates of issue. The Company has received notice from the debenture holder invoking the put option. The Company is in discussion with the debenture holder to waive the option and based on the said discussion, the management is reasonably confident that the debenture holder will waive the option and the debentures would be redeemed at the expiry of ten years from the date of their issue. However, the debentures have been classified as current liabilities till such waiver is received.

b) Secured debentures: 205 debentures issued on 1^st February 2013 are redeemable at the expiry of 10 years from the date of issue and the holder of the debentures have an option to call after 5 years from the date of issue. These debentures are overdue for payment on balance sheet date.

c) Secured Rupee term loans from banks and others: Repayable in quarterly instalments starting from October, 2015 to December, 2020.

d) Secured foreign currency term loans from banks : Repayable in quarterly instalments starting from March, 2006 to July, 2019

e) Finance lease obligation: Repayable in monthly instalments starting from November 2016 to April 2027.

f) Foreign currency convertible bonds: i) FCCBs of US$ 111,428,571 (Series B) due on 24th August, 2017 and US$ 128,571,429 (Series A) due on 24th August, 2015 got extended to 24th August, 2019, carry interest @ 5% per annum payable semi annually. The FCCBs are convertible into 122,852,787 fully-paid equity shares of Rs.10 each of the Company, any time upto the date of maturity, at the option of the FCCB holders at conversion price of Rs.91.70 per share at a predetermined exchange rate of Rs.46.94 per US$. The FCCBs, if not converted till the maturity date, will be redeemed at par.

g) The classification of loans between current liabilities and non - current liabilities continues based on repayment schedule under respective agreements as no loans have been recalled due to non compliance of conditions under any of the loan agreements except in case of certain non current borrowings from debenture holders amounting to Rs.739.50 crore and from banks amounting to Rs.58.21 crore where some of these lenders have not confirmed the loan balances as on the balance sheet date

h) Interest rates: Loans availed from banks, financial institutions, NBFC’s and Alternate Investment Funds carry a weighted average interest rate of 9.44% per annum (previous year: 8.06% per annum)

I. Details of retirement benefits:

The employees of the Company are members of a state - managed retirement benefit plans namely provident fund, pension fund, gratuity fund and superannuation fund operated by the Government of India. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the company with respect to the retirement benefit plan is to make the specified contributions.

The Company has recognised the following amounts in the Statement of Profit and Loss during the year under ‘Contribution to staff provident and other funds. (refer note 16)

II. Defined benefit plans

The company operates funded gratuity, non funded gratuity and funded provident fund plan for qualifying employees. Under the plans the employees are entitled to retirement benefits depending upon the number of years of service rendered by them subject to minimum specified number of years of service. No other post retirement benefits are provided to these employees. Contribution to provident fund (office staff and offshore officers)

The actuarial valuation of plan assets and the present value of defined benefit obligation were carried out at March 31, 2018 by the certified actuarial valuer. The present value of the defined benefit obligation, related current service cost and past service cost were measured using the projected unit credit method.

Risk exposure- asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments % which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit.

ii) Mortality rates considered are as per the published rates in the India Assured Lives Mortality (2006-08) (modified) ULT. (Previous year Life Insurance Corporation of India (2006-08) ) mortality table

iii) Leave policy: Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the employee accrued till 31st December, 2014, is available for encashment on separation from the Company up to a maximum of 120 days.

iv) The contribution to be made by the Company for funding its liabilities for gratuity (funded and non funded) and towards provident fund during the financial year 2018-19 amounts to Rs.2.72 crore

v) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

vi) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion, supply and demand and other relevant factors.

vii) Liability on account of long term absences has been actuarially valued as per Projected Unit Credit Method.

viii) Short term compensated absences have been provided on actual basis.

(I) The weighted average duration of the defined benefit obligation is 6 years.

During the year, the Company has recognized income from an Arbitration Award alongwith interest accrued thereon amounting to Rs.369.8 crore. This award relates to a claim for breach of contract against a charterer. The dispute in this regard has been adjudged in favour of the Company by the Arbitrator. Although the Charterer has appealed the Award in the Delhi High Court, management is confident of a positive result from the same.

Energy Transportation International Limited, Bermuda, (ETIL), a wholly owned subsidiary of the Company has been incurring losses such that its net worth has eroded fully. It was operating a VLCC which was on Time Charter from a German company. However, on 10th January 2018, the Time Charter for the said VLCC was terminated by the German company leaving ETIL with no vessels to operate. In this scenario, the Company has created a provision for diminution other than temporary in respect of its investment in ETIL on 31st March 2018 amounting to Rs.67.66 crores.

Subsequent to balance sheet date, the Company sold a capesize vessel for scrapping as it neared the end of its useful life. The book value of the vessel was Rs.143 crore and the sale proceeds in respect of the same were Rs.65 crores, thereby resulting in a loss on sale of Rs.78 crores. As at 31st March 2018, the said vessel has been classified as an asset held for sale and has been disclosed in the balance sheet at its market value (net of costs to sell) and the resultant diminution in value has been included as an Exceptional expense in the standalone statement of profit and loss.

2. FINANCIAL INSTRUMENTS

(i) Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The company''s overall strategy remains unchanged from previous years. The capital structure of the company consists of debt, which includes the borrowings including temporary overdrawn balance, cash and cash equivalents including short term bank deposits, equity comprising issued capital and reserves. The gearing ratio for the year is as under:

Fair value measurements recognised in the statement of financial position:

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a) Cash and short-term deposits, trade and other receivables, trade and other payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities or nature of these instruments.

b) The fair value of loans from banks and other financial indebtedness as well as other non current financial liabilities is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities.

c) Derivative instruments have been fair valued on the reporting date on the basis of quotes provided by third party qualified valuers / market participants.

(iii) Financial risk management objectives:

The Company’s principal financial liabilities comprise of loan from banks and financial institutions, finance lease obligations, overdrafts and trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables, cash and short term deposits, which arise directly from its operations.

The main risks arising from Company’s financial instruments are foreign currency risk, interest rate risk, credit risk and liquidity risk. The Board of Directors review and agree policies for managing each of these risks.

(iv) Foreign currency risk:

Foreign currency risk mainly arises from transactions undertaken by the Company denominated in currencies other than its functional currency. Exposure to foreign currency risk is partly mitigated by natural hedges of matching revenues and costs.

The carrying amounts of the Company’s financial assets and financial liabilities denominated in foreign currencies at the reporting date are as follows:

The following table details the Company''s sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currency. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit and other equity where the functional currency strengthens by 5% against the relevant foreign currency. For a 5% weakening of the functional currency against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.

(v) Interest rate risk:

The Company is exposed to interest rate risk as it borrows funds at floating interest rates. The interest rate risk is managed by monitoring the Company''s level of borrowings periodically and structuring its borrowings on varying maturities and interest rate terms. The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s profit for the year ended March 31, 2018 would decline by Rs.0.94 crore (previous year Rs.3.87 crore). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings

(vi) Other price risk

The Company is not exposed to any significant equity price risks arising from equity investments, as on 31^st March 2018. Equity investments are held for strategic purposes rather than trading purposes. The Company does not actively trade these investments.

Equity price sensitivity analysis:

There is no exposure to equity price risks as at the reporting date or as at the previous reporting date.

(vii) Credit risk:

The credit risk is primarily attributable to the Company''s trade and other receivables and guarantees given by the Company on behalf of others. The amounts presented in this standalone statement of financial position are net of allowances for doubtful receivables, estimated by management based on prior experience and their assessment of the current economic environment. The maximum related party credit exposure at March 31, 2018 on account of carrying amount of advances /deposit, trade and other receivables and guarantees is disclosed in the note on related party transactions. Based on the creditworthiness of the related parties, financial strength of related parties and its parents and past history of recoveries from them, the credit risk is mitigated.

Cash and cash equivalents are held with reputable and credit-worthy banks.

(viii) Fair value of financial instruments:

All financial assets are initially recognised at fair value of consideration paid. Subsequently, financial assets are carried at fair value or amortized cost less impairment. Where non - derivative financial assets are carried at fair value, gains and losses on re- measurement are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit or loss, in which case the gains and losses are recognised directly in the standalone statement of profit and loss. Financial assets are designated as being held at fair value through profit or loss when it is necessary to reduce measurement inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortised cost.

(ix) Liquidity risk:

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company''s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company monitors its risk of shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and projected cash flows from operations, public offerings and refinancing of current borrowings.

Liquidity table:

The following tables details the Company’s remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the cash flows of financial liabilities based on the earliest date on which the Company can be required to pay:

Operating leases : Company as a lessee

The Company has not entered into any non-cancellable operating leases.

3. BUSINESS SEGMENT AND GEOGRAPHICAL SEGMENT

a) Business segment

The Company has only one reportable primary business segment of fleet operating and chartering.

b) Geographical segment

The Company’s fleet operations are managed on a worldwide basis from India. The revenue from operations are identified as geographical segment based on location of customers:

Note:

Equity shares to be issued upon conversion of FCCB and exercise of Employee Stock Option Scheme have not been considered for the purpose of calculating of weighted average number of diluted equity shares, as they are anti dilutive.

4. EMPLOYEE STOCK OPTION SCHEME

a) In the Annual General Meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled “Essar Shipping Employee Stock options Scheme -2011” (hereafter named ESOS A).

The ESOS A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 5/4/3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 7 years from the date of vesting. The Company has issued the said ESOS in two tranches on November 2, 2011 and February 8, 2012 at an exercise price of '' 22.30 each, the market price of the shares on the grant date of the ESOS was ''22.30 per share and '' 31.30 per share respectively.

The difference between the market price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

5. MANAGERIAL REMUNERATION

The appointment of and remuneration to the two Whole-time Directors have been approved by the shareholders at the last AGM of the Company and applications to the Central Government has been made for approval of their remuneration.

6. GOING CONCERN

As at 31^st March, 2018, the Company''s Current Liabilities exceed its Current Assets by Rs.1,506.51 crore as at 31^st March, 2018. The following steps are being taken to rectify this mismatch.

1) Loan from a public financial institution along with interest accrued thereon amounting to Rs.1,087 crore classified as Current is expected to be rescheduled.

2) Advance from a subsidiary for purchase of vessel amounting to Rs.330 crores is not payable within one year.

3) Loan from an Alternate Investment Fund along with interest accrued thereon amounting to Rs.196 crore is not payable within one year.

4) Loan from an NBFC along with interest accrued thereon amounting to Rs.43 crore will not be repaid out of the Company''s current assets.

5) Certain loans classified as current owing to covenant defaults are expected to be rescheduled such that they will not be repayable within one year.

7. SUBSEQUENT EVENT

Subsequent to the 31^st March, 2018, the Company has entered into a Memorandum of agreement for sale of a capsize dry bulk carrier of 175,048 DWT

8. The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2016

1. GOING CONCERN

At 31st March 2016 the Current Liabilities of the Company exceed its Current Assets primarily on account of current maturities of long term debt. The Management has taken the following initiatives in order to meet its short term liabilities in a timely manner.

a) Refinancing its debt ( including debentures) with longer terms of repayment which will be commensurate with the useful life of its assets. The management has made representation to its lenders through the Joint Lenders Forum (JLF) for refinancing its current debt with longer maturities. Approval from the lead bank for the same has been received and balance approvals are expected shortly.

b) Claim receivable from an arbitration award, received by the Company in its favour on account of illegal termination of a Contract of Affreightment by a charterer, which will enable the Company to augment its working capital requirements..

c) Revival in tanker segments and recent increase in the Baltic dry index will assist company in increasing margins.

Having regard to above, the Company is confident that it will be able to meet its financial obligations in the foreseeable future, and accordingly the financial statements have been prepared on a going concern basis.

2. SUBSEQUENT EVENTS

a) The Company has entered into a Memorandum of Agreement for sale of one of its capsize dry bulk carrier. The diminution in value of Rs.28.86 crore has been provided. on account of asset held for sale.

b) The Company has received an award in its favour for an amount of US$ 47.13 million on account of arbitration initiated by the Company against a charterer for illegally terminating a Contract of Affraightment ( COA) entered between the Company and the Charterer and no impact of the same has been considered in the financials.

3. THE PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED / RECLASSIFIED WHEREVER NECESSARY TO CORRESPOND

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Mar 31, 2015

1 CORPORATE INFORMATION

Essar Shipping Limited was incorporated in September 2010 and is listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is mainly engaged in fleet operating and chartering and operates in international and coastal voyages. The Company has also directly and/ or through its subsidiaries invested in diverse business verticals viz. Fleet operating and chartering (tankers and dry bulkers), oilfields services (land rigs and semi- submersible rig) and logistics services (trucks, trailers and tippers). The place of business of the Company is in Mumbai, India.

(A) Terms of / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(B) Shares reserved for issue under options

(i) The Company has reserved issuance of 36,65,270 equity shares of Rs. 10 each for offering to eligible employees of the Company and its subsidiaries under Employee Stock Options Scheme (ESOS). Refer note 34 for details.

(ii) 2,400 Foreign Currency Convertible Bonds (FCCB) are convertible into 122,852,787 equity shares, at the option of the holders, (previous year 122,852,787 equity shares) of Rs. 10/- each Refer foot note (i) (f) to note 5 for details.

i) Repayment terms:

a) Secured debentures: 2,000 debentures issued on 25th March 2010 and 5,000 debentures issued on 22nd June 2009 are redeemable at the expiry of 10 years with put and call option exercisable after five years from their respective dates of issue. The Company has received notice from the debenture holder invoking the put option. The Company is in discussion with the debenture holder to waive the option and based on the said discussion, the management is reasonably confident that the debenture holder will waive the option and the debentures would be redeemed at the expiry of ten years from the date of their issue. However, the debentures have been classified as current liabilities till such waiver is received. (refer note 35).

b) Secured debentures: 205 debentures issued on 01st February 2013 are redeemable at the expiry of 10 years from the date of issue and the holder of the debentures have the option to call after 5 years from the date of issue. 40 debentures issued on 12th October 2012, 50 debentures issued on 28th June 2012 and 100 debentures issued on 22nd June 2012 are redeemable at the expiry of 5 years from their respective date of issue.

c) Secured Rupee term loans from banks and others: Repayable in quarterly/monthly installments starting from October, 2010 to December, 2019.

d) Secured foreign currency term loans from banks : Repayable in quarterly installments starting from March, 2006 to July, 2019

e) Finance lease obligation: Repayable in monthly installments starting from October, 2008 to September, 2018.

f) Foreign currency convertible bonds: FCCBs of US$ 111,428,571 (Series B) due on 24th August 2017 and US$ 128,571,429 (Series A) due on 24th August 2015 carry interest @5% per annum payable semi annually. The FCCBs are convertible into 122,852,787 fully-paid equity shares of Rs. 10 each of the Company, any time upto the date of maturity, at the option of the FCCB holders at conversion price of Rs. 91.70 per share at a predetermined exchange rate of Rs. 46.94 per US$. The FCCBs, if not converted, till the maturity date will be redeemed at par.

ii) The classification of loans between current liabilities and non-current liabilities continues based on repayment schedule under respective agreements as no loans have been recalled due to non compliance of conditions under any of the loan agreements.

2. Contingent liabilities (to the extent not provided for)

Rs. in Crore

Particulars As at As at 31st March, 2015 31st March, 2014

a With respect to pending litigations

i) Guarantee given by a bank against disputed custom duty demand of Rs. 30.00 30.00 27.40 crore by DGFT

ii) Income tax demand -appeal filed by the Income tax department in the 7.29 7.29 High court of Bombay against the order of Appellate Tribunal in favour of the Company

b Others

i) Corporate guarantees on behalf of subsidiaries # 592.03 572.48

ii) Bills discounted with bank 48.85 18.00

# Guarantees have been given for business purposes.

3. Business segment and geographical segment

a) Business segment

The Company has only one reportable primary business segment of fleet operating and chartering.

b) Geographical segment

The Company's fleet operations are managed on a worldwide basis from India. The revenue from operations are identified as geographical segment based on location of customers:

4. Earnings per share:

The calculation of the basic and diluted earnings per share is based on the following data:

5. Derivative instruments and unhedged foreign currency exposure :

A) Derivative contracts outstanding as at the Balance Sheet are as follows:

During the year, the Company extended hedge accounting principles of Accounting Standard (AS) 30 "Financial Instruments : Recognition and Measurement" for accounting of certain forward foreign exchange contracts to hedge the exchange risk pertaining to highly forecasted transactions. Accordingly mark to market losses of Rs.12.88 crore has been carried over to cash flow hedge reserve as of 31st March, 2015 for Currency Swap hedging.

The Company had also entered in to a forward contract to cover its foreign currency exposure, the premium on the contract Rs. 3.11 crore (previous year nil) has been charged during the year. There is no forward contract outstanding as on 31st March, 2015.

6. Employee benefits :

The Company has classified the various benefits provided to employees (office staff, offshore crew members and officers) as under:

I. Defined contribution plans:

The Company has recognised the following amounts in the Statement of Profit and Loss during the year under 'Contribution to staff provident and other funds. (refer note 20)

(G) Actuarial assumptions

Actuarial valuations were done in respect of the aforesaid defined benefit plans based on the following assumptions:

i) General assumptions:

ii) Mortality rates considered are as per the published rates in the India Assured Lives Mortality (2006-08) (modified) ult.

iii) Leave policy:

a) There is no balance of sick leave as at valuation date ( till previous year the Sick leave balance as at the valuation date was available for adjustment against future sick leave and the balance not available for encashment).

b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the employee is available for encashment on separation from the Company up to a maximum of 120 days.

iv) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over entire life of the related obligation.

v) The assumption of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion, supply and demand and other relevant factors.

vi) Liability on account of long term absences has been actuarially valued as per Projected Unit Credit Method.

vii) Short term compensated absences have been provided on actual basis.

7. Related party relationships, transactions and balances:

a) Holding companies :

i) Essar Global Fund Limited, Cayman Islands, ultimate holding company

ii) Essar Shipping & Logistics Limited, Cyprus, intermediate holding company (immediate holding company till 27th March 2015)

iii) Essar Ports & Shipping Mauritius Limited , Mauritius, intermediate holding company (from 27th March 2015)

iv) Essar Ports & Shipping HoldCo Limited, Mauritius, intermediate holding company (from 27th March 2015)

v) Essar Ports & Shipping Jersey Ltd, Jersey, intermediate holding company (from 27th March 2015)

vi) Essar Ports and Shipping Limited, Mauritius, immediate holding company (from 27th March 2015)

b) Subsidiaries:

i) Essar Logistics Limited, India

ii) Energy Transportation International Limited, Bermuda

iii) Energy II Limited, Bermuda

iv) Essar Oilfields Services Limited, Mauritius

v) Essar Oilfield Services India Limited, India

c) Associates

(i) Varada Drilling One Pte. Limited

(ii) Varada Drilling Two Pte. Limited

d) Key management personnel

i) Mr. A. R. Ramakrishnan (till 31st March, 2015)

ii) Mr. Anoop Kumar Sharma

e) Fellow subsidiaries where there have been transactions:

(i) Aegis Limited

(ii) Essar Bulk Terminal Limited

(iii) Essar Oil Limited

(iv) Essar Ports Limited

(v) Essar Projects India Limited

(vi) Essar Shipping (Cyprus) Limited

(vii) Essar Steel India Limited

(viii) Essar Power Gujarat Limited

(ix) Essar Steel Logistics Limited

(x) Vadinar Oil Terminal Limited

(xi) Vadinar Ports & Terminals Limited

8. Employee Stock Option Scheme

a) In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled "Essar Shipping Employee Stock options Scheme -2011" (hereafter named ESOS A).

The ESOS A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 5/4/3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 7 years from the date of vesting. The Company has issued the said ESOS in two tranches on November 2, 2011 and February 8, 2012 at an exercise price of Rs. 22.30 each, the market price of the shares on the grant date of the ESOS was Rs. 22.30 per share and Rs.31.30 per share respectively.

The difference between the market price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

9. Going Concern

At 31st March 2015 the Current Liabilities of the Company exceed its Current Assets primarily on account of current maturities of long term debt. The Management is in discussion with lenders (including debenture holder) to refinance the existing borrowings in a manner such that repayment schedules are aligned with projected debt servicing ability of the fleet. Having regard to above, the Company is confident that it will be able to meet its financial obligations in the foreseeable future, and accordingly the financial statements have been prepared on a going concern basis.

10. The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2014

CORPORATE INFORMATION

Essar Shipping Limited was incorporated in September 2010 and is listed on Bombay Stock Exchange and National Stock Exchange in India. The Company is mainly engaged in fleet operating and chartering and operates in international and coastal voyages. The Company has also directly and/ or through its subsidiaries invested in diverse business verticals viz. Fleet operating and chartering (tankers and dry bulkers), oilfields services (land rigs and semi- submersible rig) and logistics services (trucks, trailers and tippers). The place of business of the Company is in Mumbai, India.

1. Contingent liabilities

Rs. in Crore

Particulars As at As at 31st March, 2014 31st March, 2013

i) Guarantee given by a bank 30.00 30.00 against disputed custom duty demand of Rs.27.40 Crore by DGFT

ii) Corporate guarantees on 1,128.74 1,461.74 behalf of subsidiaries

iii) Bills discounted with bank 18.00 150.00

iv) Income tax demand -appeal 7.29 7.29 filed by the Income tax department in the High court of Bombay against the order of Appellate Tribunal in favour of the Company.

2. In view of exemption granted by the Central Government for shipping companies vide press note no.2/2011 dated 08.02.2011, information required under sub-clauses (a), (b), (c) and (e) of paragraph 5 (VIII) of part II of Revised schedule VI to the Companies Act, 1956, is not given.

3. The previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification /disclosure.

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Mar 31, 2013

1. CORPORATE INFORMATION

Essar Shipping Limited ("the Company") incorporated in 2010 is mainly engaged in feet operating and chartering and operates in international and coastal voyages.

2. Deferral / capitalisation of exchange difference

Pursuant to Notifcation issued by the Central Government under Companies (Accounting Standards) Amendment Rules, 2009 dated 29th December, 2011; the exchange differences arising on conversion/translation/settlement of long-term foreign currency monetary items in so far as they relate to the acquisition of a depreciable capital asset, has been added to or deducted from the cost of the respective asset and has been depreciated over the remaining balance useful life of the asset. In case of exchange difference related to any other long-term foreign currency monetary item, the exchange difference has been deferred in the "Foreign Currency Monetary Item Difference Account", which has been amortised over the period till the date of maturity or 31st March 2020, whichever is earlier. The following is the effect of the option exercised:-

3. Contingent liabilities Rs. in crore

Particulars As at 31st As at 31st March, 2013 March, 2012

i) Guarantee given by a bank against disputed custom duty demand of Rs.27.40 30.00 30.00 crore by DGFT

ii) Corporate guarantees on behalf of subsidiaries 1,461.74 1,461.74

iii) Corporate guarantees on behalf of others jointly and severally with Essar Ports - 410.00 Limited

iv) Bills discounted with bank 150.00 21.00

v) Income tax demand -appeal fled by the Income tax department in the High court 7.29 7.29 of Bombay against the order of Appellate Tribunal in favour of the Company

4. Business segment and geographical segment

a) Business segment

The Company has only one reportable primary business segment of feet operating and chartering.

b) Geographical segment

The Company''s feet operations are managed on a worldwide basis from India. The revenue from operations are identifed as geographical segment based on location of customers:

5. Related party relationships, transactions and balances:

a) Holding companies:

i) Essar Global Fund Limited (formerly Essar Global Limited) , Cayman Island, ultimate holding company ii) Essar Shipping & Logistics Limited, Cyprus, immediate holding company

b) Subsidiaries:

i) Essar Logistics Limited, India

ii) Energy Transportation International Limited, Bermuda

iii) Energy II Limited, Bermuda

iv) Essar Oilfelds Services Limited, Mauritius

v) Essar Oilfeld Services India Limited, India

c) Key management personnel:

i) Mr. A. R. Ramakrishnan

ii) Captain Anoop Kumar Sharma

d) Other related parties where there have been transactions:

Enterprises commonly controlled or infuenced by major shareholders / directors / relatives of directors of the Company:

(i) Aegis Limited

(ii) Essar Bulk Terminal Limited

(iii) Essar Bulk Terminal Paradip Limited

(iv) Essar Oil Limited

(v) Essar Ports Limited

(vi) Essar Shipping (Cyprus) Limited

(vii) Essar Steel India Limited

(viii) Essar Power Gujarat Limited

(ix) Vadinar Oil Terminal Limited

(x) Vadinar Power Company Limited

(xi) Arkay Holdings Limited*

(xii) Arkay Sea Logistics Limited*

(xiii) Essar Agrotech Limited*

(xiv) Essar House Limited*

(xv) Essar Information Technology Limited*

(xvi) Essar Infrastructure Services Limited*

(xvii) Essar Investments Limited*

(xviii) Essar Services India Limited*

(xix) Futura Travels Limited*

(xx) India Securities Limited*

(xxi) Prajesh Marketing Limited*

6. Employee Stock Option Scheme

a) In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled "Essar Shipping Employee Stock options Scheme -2011" (hereafter named ESOP A). The ESOP A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the employees deemed eligible. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 5/4/3 years from the date of the grant in proportions specifed in the Scheme. Options may be exercised within 7 years from the date of vesting.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

7. In view of exemption granted by Central Government for shipping companies vide press note no.2/2011 dated 08.02.2011, information required under sub-clauses (a), (b), (c) and (e) of paragraph 5 (VIII) of part II of Revised schedule VI to the Companies Act, 1956, is not given.

8. The previous year fgures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifcation /disclosure.

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Mar 31, 2012

A. GENERAL INFORMATION

Essar Shipping Limited ("the Company") was incorporated in the name of Essar Ports & Terminals Limited in the State of Gujarat on April 16, 2010. The name was subsequently changed to Essar Shipping Limited with effect from September 7, 2010. The Company received the Certificate of Commencement of Business on June 1, 2010. The main object of the Company on incorporation was to carry on the business inter alia of providing ports and terminals services. The main objects of the Company were expanded on August 25, 2010 to inter alia provide shipping & logistics and oilfields services business.

B. COMPOSITE SCHEME OF ARRANGEMENTS

The Hon'ble High Court of Gujarat at Ahmedabad vide order dated March 1, 2011 approved the Composite Scheme of Arrangement (Scheme) between Essar Shipping Ports & Logistics Limited (now EPL), Essar Ports & Terminals Limited (EPTL) Mauritius, Essar International Limited (EIL) Mauritius and Essar Shipping Limited (ESL).

The Scheme provided for the merger of EPTL and EIL with ESPLL and the demerger of the Shipping & Logistics Business and the Oilfields Services Business into ESL.

Pursuant to the Scheme, all the assets and liabilities pertaining to the Shipping & Logistics Business and the Oilfields Services Business stood transferred to and became vested in ESL at the book values (ignoring revaluation) as appearing in the books of account of ESPLL with effect from October 1, 2010 being the Demerger Appointed Date, which are based on financial statements as on 30th September, 2010.The difference between the values of assets and liabilities transferred was first adjusted against share capital (Rs. 205.23 crores), Rs. 25 crores against Debenture Redemption Reserve and the balance to General Reserve of the Company.

Upon the Scheme becoming effective, ESL ceased to be a subsidiary of ESPLL with effect from October 1, 2010.

Non Convertible Debentures aggregating to Rs. 700 crores and Foreign Currency Convertible Bonds aggregating to USD 240 million (out of USD 280 million) issued by ESPLL stood transferred to ESL.

In consideration of the demerger, the Company allotted 20,52,27,768 equity shares of Rs. 10/- each as fully paid up to the eligible members of ESPLL whose name were recorded in the register of members of ESPLL as on May 19, 2011, in terms of the Scheme as detailed below.

Simultaneously, the original issued equity share capital i.e. 50,000 equity shares of Rs. 10/- each were cancelled in accordance with the Scheme.

1. Deferral / capitalisation of exchange difference

Pursuant to Notification issued by the Central Government under Companies (Accounting Standards) Amendment Rules, 2009 dated 29th December, 2011; the exchange differences arising on conversion/translation/settlement of long-term foreign currency monetary items in so far as they relate to the acquisition of a depreciable capital asset, has been added to or deducted from the cost of the respective asset and has been depreciated over the remaining balance life of the asset. In case of exchange difference related to any other long-term foreign currency monetary item, the exchange difference has been deferred in the "Foreign Currency Monetary

2. Contingent liabilities

As at 31st As at 31st Particulars March, 2012 March, 2011 Rs.in crore Rs.in crore

i) Guarantees given by bank against disputed custom duty by DGFT 30.00 30.00

ii) Corporate guarantees on behalf of subsidiaries 1,461.74 1,386.24

iii) Corporate guarantees on behalf of others jointly and severally with Essar Ports Limited 410.00 -

iv) Bills discounted with bank 21.00 17.64

v) Disputed Sales tax demand - 52.20

vi) Income tax appeals before ITAT 7.29 7.29

3. Capital commitments and other commitments

a) Capital commitment

Estimated amount of contract remaining to be executed on capital account and not provided for - 76.35

b) Other commitments

For commitment relating to lease arrangement, please refer note 24

The Company entered into a operating lease arrangement for chartering of six vessels for a period of 13 years from the date of delivery of each vessel. Of six vessels, the company has inducted three vessels during the year.

4. Business segment and geographical segment

a) Business segment

The Company has only one reportable segment of fleet operating and chartering.

b) Geographical segment

The Company's fleet operations are managed on a worldwide basis from India. Fleet operating and chartering earnings based on the geographical location of customers:

Note:

(i) In the current year, FFCB and ESOP have not been considered for the purpose of calculation of weighted average number of diluted equity shares, as they are anti-dilutive. (ii) The shares to be issued on demerger were pending allotment at 31st March, 2011 and hence have not been considered for calculation of basic earnings per share for the period ended 31st March, 2011.

5. Derivative instruments and unhedged foreign currency exposure :

A) Derivative contracts outstanding as at the Balance Sheet are as follows:

The company has entered into Derivative contracts for hedging currency related risks. The Principal only swap contract to sell Rs. 200 crores (previous year : nil) is outstanding as on the balance sheet date.(Refer note 7)

i) Mortality rates considered are as per the published rates in the Life Insurance Corporation (1994-96) Mortality table,

ii) Leave policy:

a) Sick leave balance as at the valuation date and each subsequent year following the valuation date will be availed by the employee against future sick leave; the sick leave balance is not available for encashment.

b) Leave balance as at the valuation date and each subsequent year following the valuation date to the extent not availed by the employee is available for encashment on separation from the Company up to a maximum of 120 days.

iii) The contribution to be made by the Company for funding its liability for gratuity during the financial year 2012 will be made as per demand raised by the fund administrator Life Insurance Corporation of India.

6. Related party transactions:

a) Holding companies :

i) Essar Global Limited, Cayman Island, ultimate holding company

ii) Essar Shipping & Logistics Limited, Cyprus, immediate holding company

b) Subsidiaries:

i) Essar Logistics Limited, India

ii) Energy Transportation International Limited, Bermuda

iii) Energy II Limited, Bermuda

7. Employee Stock Option Scheme

a) In the Annual general meeting held on September 9, 2011, the shareholders approved the issue of Employee Stock options under the Scheme titled "Essar Shipping Employee Stock options Scheme -2011" (hereafter named ESOP A).

The ESOP A allows the issue of options to employees and executive Directors of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the Scheme, the Compensation Committee grants the options to the eligible employees. The exercise price of each option shall be determined by the Compensation committee as per the said scheme. The options granted vest in a graded manner over a period of 3 to 5 years Starting from the third year of grand date in proportions specified in the Scheme. Options may be exercised within 7 years from the date of vesting.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

8. In view of exemption granted by Central Government for shipping companies vide press note no.2/2011 dated 08.02.2011, certain information pertain to value of imports calculated on CIF basis, expenditure on foreign currency, value of all imported raw material, spare parts and components consumed, earnings in foreign currency during the year is not given.

9. The current year figures are not comparable with the previous year figures, as in the previous year, effective operation was for six months only, since the demerger of shipping, oilfield and logistics business from Essar Ports Limited (erstwhile Essar Shipping Ports & Logistics Limited) was effective from 1st October, 2010.

10. The previous year figures have been regrouped / rearranged wherever necessary to conform to the current year classification as per the requirement of the Revised schedule VI notified under the Companies Act, 1956.