Annual Report: 2022-23

About this update from Essar Shipping Limited.

13 TH ANNUAL REPORT FOR THE FINANCIAL YEAR 2022-23 BOARD OF DIRECTORS Mr. R. Suresh Independent Non- Executive Director Chairman (w.e.f. 29.09.2021) Mr. R. Jayakumar Independent Non- Executive Director (w.e.f. 29.09.2021) Mr. Sunil Modak Independent Non- Executive Director (w.e.f 08.09.2022) Ms. Raji Chandrashekar Independent Non- Executive Director (w.e.f 08.09.2022) Mr. Rajesh Desai Executive Director (w.e.f. 12.11.2021) Ms. Raichel Mathew Non- Executive Director (w.e.f 08.09.2022) Mr. N. Srinivasan Independent Director & Chairman (till 08.09.2022) Captain Bhupinder Singh Kumar Independent Non- Executive Director (till 08.09.2022) Ms. Saraswathy Subramanian Non- Executive Director (till 08.09.2022) Mr. Ranjit Singh President and Chief Executive Officer (till 30.09.2022) Mr. Ketan Shah Chief Financial Officer (till 30.09.2022) Mr. Vipin Jain Chief Financial Officer (w.e.f. 01.10.2022) Ms. Nisha Barnwal Company Secretary (w.e.f 23.09.2021) AUDITORS C N K & Associates LLP. Chartered Accountants (Firm Registration No. 101961 W/W - 100036) Add: Mistry Bhavan, 3rd Floor, Dinshaw Vachha Road, Churchgate, Mumbai- 400 020 SECRETARIAL AUDITOR MARTINHO FERRAO & ASSOCIATES Dhun Building, Office # 301, 23/25, Janmab- hoomi Marg, Fort, Mumbai- 400001 Telephone: 022 2202 4366 Email: mferraocs@ yahoo.com INTERNAL AUDITOR DMKH & CO. 311, 3rd Floor, Pratik Mall, Near Swaminarayan Dham, Kudasan, Gandhinagar, Gujarat - 382421 DEBENTURE TRUSTEEE IDBI Trusteeship Services Limited Asian Building, Ground Floor, R. Kamani Marg, Ballard Estate, Mumbai - 001 Phone: 022 40807000 Fax: 022 66311776 Email: [email protected] REGISTRAR & TRANSFER AGENT Data Software Research Company Private Limited 19, Pycroft Garden Road, Off Haddows Road, Nungambakkam, Chennai- 600 006 Ph.No.044-28213738 / 28214487 Fax No. 044-28214636 Email: [email protected] REGISTERED OFFICE CORPORATE OFFICE EBTSL Premises, ER-2 Building Essar House (Admin Building), 11, K.K. Marg, Salaya, 44 KM, P.O. Box No.7, Mahalaxmi. Taluka Khambhalia, Mumbai- 400 034. Devbhumi Dwarka. Maharashtra, India. Gujarat- 361 305 E-mail: [email protected] Contents Notice to Members 2 Director's Report 19 Report on Corporate Governance 43 Auditor's Report on Standalone Financial Statements 57 Standalone Balance Sheet 65 Standalone Statement of Profit and Loss 66 Standalone Statement of Cash Flows 67 Standalone Statement of Changes in Equity 69 Notes forming part of the Standalone Financial Statements 71 Auditors' Report on Consolidated Financial Statements 110 Consolidated Balance Sheet 117 Consolidated Statement of Profit and Loss 118 Consolidated Statement of Cash Flows 119 Consolidated Statement of Changes in Equity 121 Notes forming part of the Consolidated Financial Statements 123 ESSAR SHIPPING LIMITED NOTICE FOR ANNUAL GENERAL MEETING Notice is hereby given that the Thirteenth Annual General Meeting (the Meeting) of the Members of Essar Shipping Limited (the Company) will be held on Friday, September 29, 2023 at 03.00 PM through video conferencing ("VC")/ Other Audio-Visual Means (OEAVM) in accordance with the applicable provisions of the Companies Act, 2013 read with MCA General Circular No. 20/2020, 14/2020, 17/2020, 20/2021, 03/2022 and 11/2022 dated May 5, 2020, April 8, 2020, April 13, 2020, December 8, 2021, May 5, 2022 and December 28, 2022 respectively, to transact following business: ORDINARY BUSINESS: To receive, consider and adopt the Audited Standalone Financial Statements of the Company for the financial year ended on March 31, 2023 together with the reports of the Board of Directors and Auditors thereon; To receive, consider and adopt the Audited Consolidated Financial Statements of the Company for the financial year ended on March 31, 2023 together with the reports of Auditors thereon; To appoint a Director in place of Ms. Raichel Mathew(DIN: 09625593), who retires by rotation in terms of Section 152 of the Companies Act, 2013 and being eligible, offers herself for re-appointment. " RESOLVED THAT in accordance with the provisions of Section 152 and other applicable provisions of the Companies Act, 2013, Ms. Raichel Mathew (DIN: 09625593), who retires by rotation at this meeting, be and is hereby appointed as a Director of the Company." SPECIAL BUSINESS: 4. To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution "RESOLVED THAT in terms of the provisions of Section 42, 71 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder, including any amendments, notifications, or re-enactment(s) if any, as may be applicable, (hereinafter the "Act"), other applicable laws, rules, circulars and regulations and in compliance with the Memorandum of Association and the Articles of Association of the Company, and subject to such other approvals, permissions and sanctions as may be necessary and subject to such conditions and modifications as may be prescribed in granting of such approvals permissions and sanctions which may be agreed to by the Members of the Company, the consent of the members of the Company be and is hereby accorded to the board of directors of the Company (hereinafter referred to as the "Board" which term shall be deemed to include any committee which the Board may constitute to exercise its powers, including the powers conferred by this resolution) to making offer(s) or invitation(s) to subscribe to, issue and allot (by way of private placement) up to 4,00,00,000 1% Non-Convertible Debentures ("NCDs") for an aggregate subscription amount of up to Rs. 4,00,00,00,000/- to M/s. Essar Steel Metal Trading Limited a company incorporated under the laws of India, with corporate registration number 046272 and having its Corporate office at Mumbai, Maharashtra on preferential basis by conversion of outstanding unsecured loan into NCDs in one or more tranches on private placement offer letter to be issued by the Company and debentures trust Deed to be executed in relation to the issue of debentures (Debentures Trust Deed) between the Company and Beacon Trusteeship Limited as the Debentures trustee (Debentures trustee) and on such terms as set out in the debentures trust deed and so such acts as may be required in this regard to give effect to this resolution. RESOLVED FURTHER THAT the aforesaid resolutions shall come into effect immediately and any one Director be and are hereby authorized to issue a certified true copy of this resolution to the concerned authorities /parties as may be necessary and they be requested to rely upon the authority of the same. RESOLVED FURTHER THAT, for the purpose of giving effect to the above, the Board be and is hereby authorized, in its entire discretion, to do all such acts, matters, deeds and things and to take all such steps and to do all such things and give all such directions, as the Board may consider necessary, expedient or desirable, including without limitation, effecting any modification to the foregoing (including any modifications to the terms of the issue), to prescribe the forms of application, allotment, to enter into any agreements or other instruments, and to take such actions or give such directions as may be necessary or desirable and to file applications and obtain any approvals, permissions, sanctions which may be necessary or desirable and to settle any questions or difficulties that may arise and appoint consultants, valuers, legal advisors, advisors and such other agencies as may be required for the preferential issue of the NCDs without being required to seek any further clarification, consent or approval of the shareholders of the Company and that the shareholders of the Company shall be deemed to have given their approval thereto expressly by the authority of this resolution. RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter(s) referred to or contemplated in any of the foregoing resolutions be and are hereby approved, ratified and confirmed in all respects. 5. To consider and if thought fit, to pass with or without modifications the following resolution as an Ordinary Resolution: " RESOLVED THAT pursuant to the provisions of Section 177 and 188 of the Companies Act, 2013 ("the Act") and Regulation 23(4) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") (including any 2 Annual Report 2022-23 ESSAR SHIPPING LIMITED statutory modification(s) or re-enactment thereof for the time being in force), the Company's Policy on "Materiality of Related Party Transactions and also on dealing with Related Party Transactions", subject to such other approvals, consents, permissions and sanctions of any authorities as may be necessary and subject to such conditions and modifications, as may be prescribed by any one of them while granting any such approvals, consents, permissions and/ or sanctions which may be agreed to by the Board of Directors of the Company, approval of the members of the Company be and is hereby accorded to the Audit Committee and the Board of Directors to authorize the management of the Company to enter into any and all material related party agreement(s) and/or transaction(s)and/or contract(s) (whether by way of an individual transaction or all transactions taken together), as may be appropriate, with the following Related Parties as defined under Section 2(76) of the Act and Regulation 2(1)(zb) of LODR Regulations inter-alia, to sell, purchase, transfer or receipt of products, goods, materials, services or other obligations, if any, on such terms and conditions as may be mutually agreed upon between the Company and any of the Related Party, for the amount in aggregate not exceeding as mentioned against the name of each of the following Related Party during the period mentioned against the name of each Related Party: Sr. Name of Related Relationship Nature of Amount (Rs . In crores) No. Party Transaction(s) From April 01, 2023 From 29 th September 2023 2023-2024 till the date of 13 th till the date of 14 th Annual Annual General General Meeting to be held Meeting in calendar year 2024 1 OGD Services Subsidiary Income from 9.00 4.00 5.00 Holdings Limited Company Management Services 2 Essar Investment Associates Income from 7.47 0.00 7.47 Holdings Mauritius Management Limited Services 3 Futura Travels Associates Ticket & Visa 1.00 0.20 0.80 Limited charges 4 Drillxplore Private Joint Venture Investment in Joint 0.01 0.01 0.00 Limited Venture 5 Essar Shipping Provident Contribution 2.00 0.09 1.91 Limited Employees Fund Trust of Provident Provident Fund Fund amount of Employees 6 Equinox Reality Associates Sale of shares of 800.00 0.00 800.00 Holdings Limited Subsidiaries 7 IDH Drilling Holdco Holding Redemption of 1537.62 0.00 1537.62 Limited Company FCCBs 8 Essar Shipping Subsidiary Receipt against 560.00 0.00 560.00 DMCC Company receivables (Net) 9 Essar Steel Metal Associate Issue of Secured 400.00 0.00 400.00 Trading Limited Company NCDs RESOLVED FURTHER THAT consent of the Members of the Company be and is hereby accorded for ratification of the aforesaid related party transactions already entered into by Company, if any exceeding the threshold limits as specified in Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014 and which are material in nature in terms of Regulation 23 (1) of LODR Regulation 2015. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts and take all such steps as may be necessary, proper and expedient to give effect to this resolution and matters connected therewith or incidental thereto including settling all such issues, questions, difficulties or doubts whatsoever that may arise and to take all decisions from powers herein conferred to, without being required to seek further consent/approval of the members of the Company." 6. SALE OF OVERSEAS DIRECT INVESTMENTS(ODI) AND REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS(FCCBS): Disinvestment in Overseas Subsidiary (Energy II Limited, Bermuda) under Section 180(1)(a) of the Companies Act, 2013: To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution "RESOLVED THAT pursuant to the provisions of section 180(1)(a), and other applicable provisions if any, of the Companies Annual Report 2022-23 3

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