To the Members of Essar Shipping Limited

Your Directors are pleased to present the Sixteenth Annual Report and Audited Financial Statements of the Company for the financial year ended March 31,2026.

FINANCIAL HIGHLIGHTS:

The Company's financial performance, for the year ended March 31,2026 is summarized below: -

PERFORMANCE REVIEW:

The Key Highlights of the Company's performance (Standalone) for the year ended March 31,2026 are as under:

1. Net Revenue from operations recorded at ' 4.33 Crore as against revenue of ' 20.50 Crore in the previous financial year.

2. Net Profit recorded at ' 553.12 Crore as against last year's Net Profit of ' 370.95 Crore

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

DIVIDEND

In view of accumulated losses from the previous financial years and with a view to conserve the resources, your Board of Directors have not recommended any dividend for the year ended 31st March, 2026.

CHANGE IN THE NATURE OF BUSINESS ACTIVITIES:

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

AMOUNT TRANSFERRED TO RESERVE:

The Company has not transferred any amount to any Statutory or general reserves during the Financial Year ended 2025-2026.

MATERIAL CHANGES AND COMMITTEMENTS

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

OILFIELD BUSINESS

As of August 2026, the offshore drilling market is in a two- speed recovery: high-specification deepwater/ ultra-deepwater drillships are moving toward a tighter market, while conventional and older semisubmersibles remain much more selective. The near-term market is softer than the 2023-25 peak, but the medium-term outlook is positive, particularly from 2027 onward. Wood Mackenzie's forecast puts marketed floating-rig demand at about 106 units in 2026, followed by approximately 8.5% growth in 2027.

The strongest demand is for modern DP drillships and high- specification semis; opportunities for older 500-600 m anchor- moored semis exist, but are concentrated in selected NOCs, brownfield/development campaigns and markets where the operator values cost competitiveness over newest-generation specifications.

1. Global market at a glance

The fleet itself is becoming more constrained. The 2025 NOV Rig Census reported only six stranded drillships, 10 jackups and seven semisubmersibles remaining in shipyards, versus materially higher stranded inventories earlier in the cycle. At the same time, semisubmersibles average around 22 years of age, meaning that limited newbuild activity is gradually creating a supply-side constraint.

That is strategically important: the market does not necessarily need many new rigs to tighten. Reactivation, retirement and consolidation of the existing fleet can materially reduce available supply.

Brazil - Strongest floater market

Brazil remains one of the world's most important offshore drilling markets.

The Santos and Campos basins continue to underpin deepwater demand, led by Petrobras and international operators. Buzios alone has reached more than 1.2 million b/d, with eight production units operating and additional FPSOs under construction or tendering.

Petrobras is also demonstrating willingness to lock up rigs for long durations. For example, Noble Courage received an extension through December 2030, although at a reduced rate for part of the period.

3. Guyana & Suriname

The Guyana/Suriname basin is one of the most important emerging deepwater markets globally.

Guyana's Stabroek Block continues to expand rapidly. ExxonMobil and partners have already invested approximately $55 billion, while production has exceeded 900,000 b/d and projects including Uaru and Whiptail support further growth.

Guyana is now entitled to approximately 39.8% of production revenues, following recovery of the consortium's investment costs.

Suriname

Suriname's offshore development is also progressing, although the market is less mature than Guyana.

4. Gulf of Mexico

The U.S. Gulf of Mexico remains a mature but important offshore drilling market.

5. Mexico

PEMEX's offshore portfolio remains dominated by the Gulf of Mexico, and the market includes both shallow-water and mid/ deepwater opportunities.

6. Canada

Newfoundland & Labrador offers an interesting medium- term opportunity.

Offshore Newfoundland production increased strongly in 2026, while the Bay du Nord project has moved forward following agreements between the provincial government, Equinor and BP.

Canada also issued 2026 exploration licence calls covering more than 3.6 million hectares in Eastern and Southeastern Newfoundland.

7. North Sea Norway

Norway remains one of the strongest mature offshore markets.

There are approximately 25 active rigs, and drilling demand is expected to remain strong through 2027, supported by field developments and exploration.

Recent Noble awards illustrate the market: a UK North Sea campaign was awarded at $320,000/day, while Noble's management continues to describe the 2027+ deepwater and harsh-environment outlook as promising.

UK

The UK is weaker than Norway because it is reeling through mature fields; declining production; political uncertainty; energy-transition policy and higher regulatory pressure.

Nevertheless, energy-security considerations could support continued offshore production.

8. West Africa

West Africa is emerging as one of the most attractive growth regions.

The region currently supports around 30 rigs and approximately 40 FPSOs, with Angola and Nigeria remaining the largest markets.

Angola

Very strong medium-term opportunity.

Recent offshore discoveries reinforce the exploration potential. Chevron announced a significant oil and gas condensate discovery offshore Angola in August 2026 and is evaluating additional drilling programs.

Namibia

Potentially one of the largest future drilling markets.

The Orange Basin has generated several major discoveries and attracted Chevron, TotalEnergies, Shell, QatarEnergy and other players.

Equinor has now agreed to acquire a 17.4% interest in Chevron's PEL 90 in Namibia, with a well expected before year-end 2026.

9. Middle East

This is an important distinction.

The Middle East remains the largest offshore MODU region, but its strength is predominantly in jackups, not floating rigs. The Middle East represented approximately 28.3% of the global MODU fleet in 2025.

Saudi Arabia

The suspension/reduction of jackup requirements temporarily weakened the market.

UAE

ADNOC remains a strong and stable drilling customer.

Qatar

Gas development provides a strong long-term offshore drilling base.

The Middle East is expected to remain one of the more stable offshore markets, with substantial EPC expenditure and additional jackup requirements.

10. India

India is arguably the most interesting emerging market for offshore drilling over the next five years for Deepwater / Ultra Deepwater categories.

The Government of India approved the Samudra Manthan National Offshore Exploration Scheme in August 2026 with an outlay of ^84,084 crore through FY2030-31.

ONGC & OIL's Samudra Manthan drilling program includes:

• 1 x 3,000 m WD DP drillships (Transocean was awarded the contract for DD KG-2)

• 2 x 3000 m WD DP drillships (Tender is in progress)

India therefore deserves to be treated as a core strategic market rather than a secondary market.

11. Southeast Asia

Key markets:

• Indonesia

• Malaysia

• Vietnam

• Thailand

• Myanmar

• Philippines

Indonesia

Potentially attractive because of:

• Pertamina

• SKK Migas

• new exploration

• gas developments

• mature-field redevelopment

Malaysia

Petronas remains a major drilling customer, although local- content requirements are important.

Vietnam Interesting for:

• redevelopment

• P&A

• brownfield activity

• offshore exploration

However, commercial/ sanctions and contracting considerations need to be evaluated on a project-by-project basis.

Asia-Pacific offshore vessel markets remain relatively volatile and have historically had lower utilisation than the Middle East and Northern Europe.

12. Australia

Recent Noble awards include a five-well Woodside contract in Australia, demonstrating continued demand for high- specification floating assets.

The primary challenge is the high technical standard and local regulatory requirements.

13. China

China's offshore activity is largely driven by:

• CNOOC

• CNPC

• Sinopec

China continues to emphasize domestic energy security and offshore exploration.

14. Mediterranean

Important areas include:

• Egypt

• Cyprus

• Turkiye

• Israel

Egypt remains the largest drilling market in the Eastern Mediterranean, particularly for gas.

However, the Mediterranean is unlikely to generate the sustained high-value floater demand seen in Brazil or Guyana.

15. Russia/ Caspian/ restricted markets

Russia continues to have substantial offshore resources, but international sanctions, financing restrictions, insurance constraints, equipment limitations and geopolitical considerations make this market fundamentally different from conventional commercial offshore drilling.

For an Indian-owned/controlled drilling company, each proposed contract would require a detailed OFAC / UK / EU / UN / Indian / banking / insurance / beneficial-ownership assessment before pursuing the opportunity.

The Caspian is predominantly a shallow-water/ jackup market with strong local/regional participation.

16. Global regional ranking

17. Day-rate outlook

The market is increasingly separating into premium and non-premium assets.

Current fixtures indicate Tier-1 drillships are reaching the low-to-mid $400,000s/day, while Noble reported leading- edge Tier-1 drillship fixtures in the mid-$400,000 range in Q2 2026.

Wood Mackenzie's 2026 forecast puts average ultradeepwater benign-floater dayrates around $415,000/day, with harsh-environment semis around $400,000/day.

Indicative market positioning

These ranges should be treated as market-positioning estimates, not firm market quotes. Actual rates depend heavily on rig age, BOP, water depth, drilling depth, location, contract duration, mobilisation, SPS/class status, upgrades, fuel terms and operator requirements.

18. The critical 2026-2030 market trend

The market is becoming asset-selective rather than simply rig-short. It is moving towards Modern high-specification rigs which are gaining pricing power. Older rigs can still secure work, but usually by offering lower day rate; lower mobilisation cost; appropriate capability & rapid availability.

Bottom line

The global offshore drilling market is fundamentally positive for 2027-2030, but the recovery will be concentrated in deepwater and high-specification assets.

The strongest regions are: Brazil; Africa; Mexico; Asia Pacific & Norway

ESSAR SHIPPING OPERATIONS & BUSINESS DEVELOPMENT

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

During the end of FY 2022-23, the Company entered into Management Service Agreement (MSA) with one of its wholly owned subsidiary company (WoS) for providing back office support services which include Financial transactions processing and Financial support services, Procurement and sourcing services and Human resource management. Further, during FY 2023-24, the Company has entered into MSA with one more group company for providing support services. The Company is charging fixed monthly fees against the services provided to these companies in line with the shareholders' approval vide resolution dated 29-09-2023. This has resulted into increase in revenue from operations on standalone basis. Further, in order to fulfil the support service agreement, the Company had hired additional employees. The aforementioned MSA contracts has been terminated during 1st quarter of FY 2025-26.

SUBSIDIARIES & ASSOCIATES

Your Company has two direct subsidiaries & one overseas step- down subsidiary. OGD Services Holdings Limited, Mauritius, and Essar Shipping DMCC are direct subsidiaries and Gargnano is overseas step-down subsidiary. OGD Services Limited, India is the step down subsidiary which is currently under liquidation. Your company have sold its majority stake in DrillXplore Services Private Limited which it was holding with its wholly owned subsidiary OGD Services Holdings Limited.

Energy II Limited cease to be the associate Company w.e.f December 25, 2024 and residual investments in Energy II Limited has been sold during quarter one of FY 2025-26.

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

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and Indian Accounting Standard (IND- AS) - 110 on Consolidated Financial Statements read with IND- AS-28 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report. The audited Consolidated Financial Statements together with Auditors' Report thereon form part of the Annual Report.

The one step down subsidiary and one associate and one jointly controlled entity not considered for Consolidation process. The step down subsidiary admitted to NCLT and gone into liquidation and one associate and one jointly controlled entity was held by step down subsidiary, which has gone into liquidation. Hence, the share of profit / (loss) for the quarter and year ended March 31, 2026, has not been included in the Consolidated Financial Statements of the Company.

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

HUMAN RESOURCE

Your Company believes that employee competence and motivation are necessary to achieve its business objectives. ESL has undertaken many training initiatives to enhance technical and managerial competence of the employees. ESL has even undertaken a series of initiatives to enhance emotional and intellectual engagement of employees.

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

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

In addition to the above mentioned initiatives, engagement programs like Health webinars, Yoga classes, and online counselling programme were also conducted. This transformation made it possible to scale learning efforts in a more cost-effective way and permits greater engagement during the locked in scenarios. Hence, initiatives like these taken during the year helped employees and their families to stay motivated and healthy.

The Company has policies on code of conduct, sexual harassment of women at workplace, whistle blower, corporate governance, insider trading etc. guiding the human assets of the Company. For the year under review, there was no instance of the sexual harassment reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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

The Company is committed to provide a work environment which ensures that every employee is treated with dignity, respect and afforded equal treatment. Training/awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace.

The Company has complied with the provisions relating to Constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act of 2013. The Company has not received any complaint of sexual harassment at workplace during the year.

The below table provides details of complaints received/ disposed during the financial year 2025-2026:

DIRECTORATE AND KEY MANAGERIAL PERSONNEL

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

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

DIRECTORS

During the year under review there were no changes in the Board of Directors of the Company except the following:

1. Mr. Srinivasan Vaidyanathan and Mr. Ketan Shah was appointed as an Additional Director of the Company with effect from 29th May, 2025;

2. Mr. Srinivasan Vaidyanathan have tendered his resignation from the post of Additional Directorship with effect from closing hours of 21st July, 2025;

3. Mr. Ketan Shah was appointed as Non - Executive, Non - Independent Director of the Company with effect from 26th September, 2025.

4. Mr. Ketan Shah was ceased to be Non-Executive Additional Director of the Company with effect from 29th August, 2026;

As per Regulation 17(1)(c) of SEBI (LODR) Regulations, 2015, Board of top 2000 listed entities w.e.f. April 01, 2020 shall comprises of at least six Directors, as such, on March 31, 2026, there were six directors on the Board of Company with Independent Director as Chairman of the Board.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-Section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 (b) (iv) of SEBI (LODR) Regulations, 2015.

Pursuant to Sections 134 and 178 of the Act and the Regulations 17 and 19 of the Listing Regulations, Nomination and Remuneration Committee (‘NRC') has set the policy for performance evaluation of Independent Directors, Board, Committees and other individual directors; separate meeting of Independent Directors; familiarization programme for Independent Directors, etc. is provided under Corporate Governance Report annexed with this Report and the relevant policies are also available on the website of the Company Essar Shipping Limited - Essar

Based on the criteria set by NRC, the Board has carried out the annual evaluation of its own performance, its committees and individual Directors for FY 2025-2026. The questionnaires on performance evaluation were prepared in line with the Guidance Note on Board Evaluation date January 5, 2017, issued by SEBI

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

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

KEY MANAGERIAL PERSONNEL

In terms of section 203 of the Companies Act, 2013, As on March 31,2026 the Key Managerial Personnel of the Company are Mr. Rajesh Desai, Executive Director, Mr. Vipin Jain, Chief Financial Officer and Mr. Habib Jan, Company Secretary & Compliance Officer.

Further during the period under review, Mr. Bharat Modi, tendered his resignation on 27th July, 2025 from the post of Company Secretary w.e.f. close of business hours of 28th August, 2025 and simultaneously, Mr. Habib Jan was appointed as a Company Secretary & Compliance Officer w.e.f. 29th August, 2025 at the Board Meeting held on 28th August, 2025.

BOARD MEETINGS

During the year ended March 31, 2026, 7 (Seven) meetings of the Board were held 7 times, that is on May 29, 2025, August 13, 2025, August 28, 2025, September 22, 2025, November 13, 2025, February 13, 2026 and February 26, 2026.

COMMITTEES OF THE BOARD

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

A detailed note on the composition of the Board and its Committees and other related particulars are provided in the Report of Directors on Corporate Governance forming part of this Annual Report.

CHANGES IN SHARE CAPITAL

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

The Stock Exchanges have rejected the application for Reclassification of M/s. Imperial Consultants & Securities Limited from Promoters category to Public category. Further, the Company would be applying with fresh application to both the Stock Exchanges.

Further, during the under review, the Company has partially redeemed 1% Secured, Redeemable, Unlisted, Unrated, NonConvertible Debentures, having Face-Value of ' 100 Each, Fully Paid-Up at premium of ^9 per debenture.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

(a) In the preparation of the annual accounts for the year ended March 31, 2026, the applicable accounting standards had been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis. The auditors have expressed an emphasis of matter on Going Concern in their Consolidated Audit Report relating to a step down subsidiary;

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

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

RISK MANAGEMENT

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

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

(b) Interest Rate Risk by undertaking suitable hedging strategies to overcome any adverse interest rate risks.

It has formulated internal target rates at which any open interest rate risk can be hedged;

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

(d) Control over various OPEX cost of the organization.

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

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

Your Company has a well-established framework of internal operational and financial controls, including suitable monitoring procedure systems which are adequate for the nature of its business and the size of its operations. The detailed report is given in Corporate Governance Report. Based on the performance of the internal financial control, work performed by internal, statutory and external consultants and reviews of Management and the Audit Committee, the board is of the opinion that the Company's internal financial controls were effective and adequate during the FY 2025-2026 for ensuring the orderly efficient conduct of its business including adherence to the Company's policies, safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of accounting records and timely preparations of reliable financial disclosures.

VARIATION IN THE PROJECTED UTILIZATION OF FUNDS:

During the period under review, there was no variation in the utilization of funds.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of corporate governance and has put in place an effective corporate governance system. The Company has complied with all mandatory provisions of SEBI (LoDr) Regulations 2015, relating to Corporate Governance. A separate report on Corporate Governance as stipulated under the SEBI (LODR) Regulations, 2015 forms part of this Report. The requisite certificates from the Auditors of the Company regarding compliance with the conditions of corporate governance are attached to the report on Corporate Governance.

VIGIL MECHANISM

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

Blower Policy is available on the website of the Company Essar Shipping Limited - Essar

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee comprises of the following members:

Since the Company has incurred losses in proceeding three financial years, it was not required to spend on CSR Activities Further, in terms of provisions of Section 135 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014 CSR Report is annexed to this Report as Annexure-A.

AUDITORS

M/s. Manohar Chowdhry & Associates, Chartered Accountants - Statutory Auditors (Registration No. 01997S) were appointed at 15th aGm of the Company held on September 26, 2025 to hold the office up to the conclusion of 20th AGM of the Company to be held in the year 2029-2030.

The Audit Report on the Financial Statements of the Company for F.Y. 2025-2026 forms part of this Annual Report.

The Report does not contain any qualification, reservation, adverse remark or disclaimer. The Company has confirmed with Auditors that they satisfy the criteria provided under Section 141 of the Act and rules framed thereunder.

AUDITORS' REPORT:

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

1. The Company has accumulated losses of approximately ' 5968.03 crores as against share capital and reserves of approximately ' 5218.14 crores. The aforesaid conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

The Company had taken several measures to improve liquidity position of the company and address the mismatch between current assets and current liabilities. These initiative include generating cash -flow from TUG operations and obtaining comfort letter from Group Companies confirming deferment of payment of accrued interest for at least 2 years. Due to aforesaid measures, company's current assets exceeds current liabilities by '4.68 crores.

The Company has disposed of most of its assets and certain investments in subsidiaries with a view to settling its outstanding dues to lenders and vendors. Further, the Company is undertaking various measures to address the mismatch between its current assets and current liabilities. As a result of these measures, as at 31 March 2026, the

Company's current assets exceeded its current liabilities by 4.68 crore. Further, the net worth of the Company improved by 553 crore as compared to the previous year, reflecting a significant strengthening of its financial position.

2. We draw attention to Note No. 6(B) of the Standalone Financial Statements, wherein the Company has netted off an amount of ^331.26 crores payable to its wholly owned overseas subsidiary against the amount receivable from the said subsidiary, which is subject to pending approval from the regulatory authorities.

Once the Company will get the approval for set off, net amount will be shown as receivables from the subsidiary company, if any.

3. We draw attention to Note No. 17 of the Standalone Financial Statements, wherein the Company has recognized Exceptional gain of ^606.28 crores out of which ^5.5 crores were on recovery of a previously irrecoverable security deposit under One Time Settlement (OTS); further ^600.78 crores include reversal of impairment on loan given to subsidiary and exchange gain recognized on the recovery.

The Company had paid 5.50 crores as part of a One-Time Settlement to a lender of a subsidiary Company (under liquidation) in its capacity as guarantor. The amount was impaired and disclosed as an exceptional item. The lender refunded the said amount during the previous quarter and accordingly, the Company has reversed the provision. Further exceptional income include reversal of impairment provided in earlier years for loan given to subsidiary Company of 493.21 crores on account of amount realised during the year, foreign exchange gain of 413.08 crores on the amount realized.

4. We draw attention to Note No. 17 of the Standalone Financial Statements, wherein the Company has paid ^67 crores during the period towards subsidiary's OTS as guarantor, resulting in receipt of no-dues certificate.

The company has paid Rs. 67 crores by way of One Time Settlement to lenders of a subsidiary company for which the company was Guarantor. The company has made impairment provision for the amount receivable from this subsidiary company because it is under liquidation.

5. We draw attention to Note No. 30 to the Standalone Financial Statements, wherein it is stated that during the year the Company received a notice from the Serious Fraud Investigation Office (SFIO) seeking submission of certain information and documents. The management has represented that it is in the process of providing the requisite details/information as sought by the authorities.

During the year, Ministry of Corporate Affairs (MCA) has initiated an investigation against company under the Serious Fraud investigation Office (SFIO).The company has been fully complying with all the requirements, including submission of the requisite documents and information from time to time. The aforesaid matter has also been duly intimated to stock exchange.

6. We draw attention to Note No. 28 to the Consolidated Financial Statements, which indicates that as at 31st March, 2026, the Group has incurred losses from operations over the last several years resulting in erosion of its net worth. The Group has accumulated losses of approximately Rs. 4,989.77 crore as against share capital and reserves of approximately Rs. 2,916.62 crore. The aforesaid conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

The group had taken various steps during the year and due to which, the net-worth has improved by 306 crore during the year in comparison to March 2025. The Holding Company had disposed of most of its assets and some of the investment in subsidiaries with a view to pay off its outstanding dues to lenders and vendors.

Further, during the year, the group had taken several measures to improve liquidity position of the group and address the mismatch between current assets and current liabilities. These initiative include generating cash -flow from TUG operations and obtaining comfort letter from Group Companies confirming deferment of payment of accrued interest for at least 2 years.

On basis of the above, the management has decided to prepare the financials on Going concern basis.

7. We draw attention to Note No. 32 to the Consolidated Financial Statements, wherein it is stated that during the year the Parent has received a notice from the Serious Fraud Investigation Office (SFIO) seeking submission of certain information and documents. The management has represented that it is in the process of providing the requisite details/information as sought by the authorities.

The holding company has been fully complying with all the requirements, including submission of the requisite documents and information from time to time. The aforesaid matter has also been duly intimated to stock exchange.

8. We draw attention to Note No. 19(d) of the Consolidated Financial Statements, wherein, during the period, the Parent recognized an exceptional gain on recovery of a security deposit earlier considered irrecoverable in connection with a One-Time Settlement (OTS) offer made on behalf of its subsidiary and, during the quarter, paid ^67 crores towards a OTS to a lender of its subsidiary (under liquidation) in its capacity as guarantor, pursuant to which a no-dues certificate was received.

One of the lender to a Subsidiary Company (where the Holding Company is a Guarantor) has filed suit against the Company before the NCLT/ DRT for recovery of loans granted to the subsidiary company (Holding Company is a Guarantor). The said subsidiary company is under liquidation. During the quarter, the Holding Company had paid 57 crore as part of a One-time Settlement to a lender of subsidiary (under liquidation) in its capacity as guarantor and no dues certificate received from the lender. The said amount is impaired because subsidiary is under liquidation and shown under exceptional item.

9. As stated in Note No. 2, the Company has incurred losses over the past several years and has also incurred loss amounting to USD 20,178,727 during the year. The accumulated losses as at March 31,2026 amounted to USD 111,875,802. The Company's net worth is negative and the Company's current liabilities exceeded its current assets at the year end. The Company has negative operating cash flows for the year under audit. The above matters indicate that a material uncertainty exists that may cast doubt on the Company's ability to continue as going concern.

During the previous year, the subsidiary company acquired a rig and is currently exploring opportunities for its deployment through participation in tenders for rig deployment.

10. We draw attention to Note 22 to the financial statements. The Company has accumulated losses of USD 502,396,994 (2025: USD 502,900,693). For the year ended 31 March 2026 it recorded a net profit of USD 503,700. As at that date, however, the Company's current liabilities still exceeded its current assets by USD 48,564,724 (2025: USD 49,068,754).

The subsidiary company continues to negotiate with the lender for settlement of its outstanding dues. The Company has also obtained the necessary financial support letter from a Group Company to support the settlement of the lender's dues and meet its operational expenses. Further, the Company has obtained legally binding letters of undertaking from its Group Companies confirming that they will not demand repayment of their outstanding loans for a period of at least twelve months from the date of approval of these financial statements.

REPORTING OF FRAUDS BY AUDITORS:

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

INTERNAL AUDITOR AND THEIR REPORT

The Board has appointed M/s S M M P and Company, Chartered Accountants, as Internal Auditor of the Company to conduct Internal Audit for the financial year 2025-2026. During the year under review S M M P & Company, Chartered Accountants, Internal Auditor has submitted their Report for the said quarters/ period to the Audit Committee for its review and necessary action.

SECRETARIAL AUDIT

The Board has appointed M/s. Mayank Arora & Co., Practising Company Secretaries, to conduct Secretarial Audit for a term of Five (5) consecutive years from FY2026 to FY2030.

The Secretarial Audit Report for the financial year ended March 31,2026 is annexed herewith marked as Annexure - B to this Report.

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

1. Pursuant to regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the company was required to make disclosure of related party transactions after every six months on the date of publication of its standalone and consolidated financial results with effect from April 01, 2023; however the company has filed the related party transaction details with 1 (one) day delay for quarter and half year ended i.e. September 30, 2025, therefore the company has paid the relevant fine as levied by BSE and NSE within the relevant timeline. The Board Members took the cognizance of the fine levied by the exchanges and stated that more care should be taken while undertaking compliances in the future.

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

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

During FY 2022-23, one of Indian sub-subsidiary got admitted to Corporate Insolvency Resolution Process (CIRP) and management of the company took over by Resolution Professional and hence the said subsidiary not considered for consolidation purpose as it is under liquidation.

3. The Company has made an allotment of 6,00,00,000 (Six Crore only) 1% Secured, Redeemable, Unlisted, and Non-Convertible Debentures ("NCDs") of face value of ' 100/- (Rupees Hundred Only) each aggregating to ' 600,00,00,000/- (Rupees Six Hundred Crores Only) and 2,50,00,000 (Two Crore Fifty Lakhs only) 8.25% Secured, Redeemable, Unlisted, and Non-Convertible Debentures ("NCDs") of face value of ' 100/- (Rupees Hundred Only) each aggregating to ' 250,00,00,000/- (Rupees Two Hundred Fifty Crores Only) to M/s. Abhinand Ventures Private Limited in FY 2024-2025. The Company is yet to appoint Debenture Trustee for the same and therefore e-form CHG-9 is yet to be filed for the creation of both the charges.

MAINTENANCE OF COST RECORDS:

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

SECRETARIAL STANDARDS OF ICSI

The Directors state that proper systems have been devised to ensure compliance with the applicable laws. Pursuant to the provisions of Section 118 of the Act, 2013 during F.Y. 2025-2026, the Company has adhered with the applicable provisions of the Secretarial Standards ("SS-1" and "SS-2") relating to ‘Meetings of the Board of Directors' and ‘General Meetings' issued by the Institute of Company Secretaries of India ("ICSI") and notified by MCA.

APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT

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

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules together with disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure - D to this Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website Essar Shipping Limited - Essar. The information on each of the transactions with the related party as per the Companies Act, 2013 is provided in note 27 of notes forming part of the financial statement and hence not repeated. The disclosure required pursuant to clause (h) of subSection (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed herewith as Annexure - E to this Report.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2026 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at Essar Shipping Limited - Essar.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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

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

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

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

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

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

During the year, Magistrate court dismissed the prosecution case filed by Income Tax Department for the FY 13-14 in the favour of the company.

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

During the year, the Company filed writ petition with Delhi High Court against the DGGI for alleging that GST was leviable on corporate guarantee.

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Technology Absorption

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

Foreign Exchange Earnings and Outgo

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

Foreign Exchanged Earned (including loan receipts, sale of ships, freight, charter hire earnings, interest income, etc.): ' 693.62 crores.

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

PUBLIC DEPOSITS

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

PREVENTION OF SEXUAL HARASSMENT

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance.

LISTING OF SHARES & LISTING FEES

The Company's equity shares are actively traded on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSEIL). The listing fees payable for the financial year 20252026 is paid to BSE Limited and National Stock Exchange of India Limited within due date.

PREVENTION OF INSIDER TRADING:

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

PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

To the best of our knowledge and belief, there are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal as on March 31,2026

OTHER STATUTORY DISCLOSURES

No disclosure or reporting is made with respect to the following items, as there were no transactions during FY 2025-2026.

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

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

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

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

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

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

APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their appreciation of commendable teamwork of all employees. Your Directors express their thanks to all the offices of the Ministry of Shipping, Directorate General of Shipping, Ministry of Petroleum and Natural Gas, Indian Navy, Indian Coast Guard, Mercantile Marine Department, State Government and Central Government, Classification societies, Oil Companies and Charterers, creditors, Banks and Financial Institutions for the valuable support, help and co-operation extended by them to the Company.

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