Shipping Corporation of India Ltd

Dear Shareholders, Ladies and Gentlemen,

On behalf of the Board of Directors of The Shipping Corporation of India Ltd, It gives me immense pleasure to address you and present to you the 74^th Annual Report of your company. The global maritime sector during the financial year 2023-24 continued to navigate the complexities of post-pandemic recovery while contending with evolving geopolitical tensions, economic fluctuations and regulatory changes. Despite the economic uncertainties, consumer spending remained robust in major economies supporting the maritime trade flow. In the financial year 2023-24, your company delivered a strong performance despite the challenges posed by a dynamic global environment characterized by falling freight rates, increasing bunker prices and numerous geopolitical adversities, refecting your companyRs.s continued focus on operational efficiency, cost management and strategic asset deployment. I take this opportunity to congratulate each shareholder for the excellent performance of your company and also convey gratitude for strongly supporting it during challenging times.

Being a derived demand, the global economic activities play a significant role in the demand for ships and Shipping. The world GDP during 2023 grew by 3.2% and is projected to experience moderate growth over next couple of years in the range of 2.7% - 3.3%. The GDP growth in the advanced economies was slower, whereas the emerging markets and developing economies have exhibited relatively strong growth. Advanced economies are expected to see slight increase in growth with emerging economies projected to experience stable growth for 2024 and 2025 with regional differences.

Globally, the total seaborne trade exhibited a decent rise of 3.00% in year 2023. Due to slowdown in the west, growth in global demand of Crude oil is expected to moderate to 1.2% in 2024 after rising by 2.3% in 2023. However, changing trade patterns are expected to increase in tonne-mile demand by around 3% in 2024. Coupled with weakness expected in fleet growth at around 0.1% and 0.5% in 2024 and 2025 respectively, major decline in freight rates will find resistance. Product tanker owners would continue to see healthy earnings in 2024, high tonnage utilization due to stretched voyages will keep freight markets firm. However, the feet growth is expected to match the growth in trade in 2025 which may lead to rates to recede after 2024. On the dry bulk trade front, although, the beginning of 2023 was sluggish, second half of the year witnessed improvement. Due to rising import demand, the forecast of trade for most of the dry bulk commodities looks promising and the volume of trade shall likely convert into positive tonne-miles due to geo-political uncertainties leading vessels to divert and, thus, haul longer. With the modest expansion in supply growth in 2024 amid buoyant demand, the dry bulk market in 2024-25 is expected to be healthy in all segments.

The global container market showed strong recovery in 2023 and is expected to maintain positive growth momentum in 2024 as well. On the back of strong manufacturing output and export activity, particularly in China, South Korea and South East Asia, Asia Pacific reason is expected to lead the growth in container market in 2024 as well just like 2023 (with all top 10 ports belonging to the region). The market has taken a cautious approach to feet expansion focusing on larger, modern and more efficient vessels. FY 2023-24 had been a mixed year for global offshore shipping with fluctuating oil prices and geopolitical tensions impacting demand and operations. However, the segment showed recovery signs in the latter part of the year, driven by increased offshore exploration and production activities. In India, the market showed resilience, with increased exploration and production activities, partly driven by government initiatives to boost domestic energy production. In the coming year, stabilization in global oil prices, coupled with increased offshore exploration and production activities, is expected to drive demand in both global and domestic market. Indian Offshore market is, however, very competitive due to increase in private participation and diversion of foreign assets to Indian waters.

Globally, business communities are recognizing the significance of sustainable development and conservation of the environment and, in this direction, the International Maritime Organization (IMO) has already implemented the Green House Gas (GHG) strategy to reduce the greenhouse gas emissions. Driven by technological advancements, environmental concerns and shifting market dynamics, trends in the industry show increasing adoption of alternative fuels such as LNG, Hydrogen, Ammonia, Methanol and biofuels to reduce carbon emissions and design and construction of energy efficient vessels with advanced hull designs, air lubrication systems and hybrid propulsion systems.

On the policy front, Government of India has undertaken several initiatives aimed at strengthening the domestic shipping industry, including coastal and Inland Waterways, and enhancing its global competitiveness. The Maritime India Vision 2030 with over 150 initiatives across 10 themes and Maritime Amrit Kal Vision 2047 with more than 300 initiatives across 11 key themes are aimed at enhancing the overall performance and efficiency of the Indian Maritime Sector leveraging the recent National Logistics Policy (NLP) and the PM Gati Shakti National Master Plan (PMGS - NMP). In order to promote Green Maritime Sector in India, the Ministry of Ports, Shipping and Waterways has launched "HaritSagar" Green Port Guidelines to reduce carbon intensity and to develop an environment friendly ecosystem at Major Ports and "Harit Nauka" initiative for promoting environmentally friendly practices in shipping industry. Further, in January 2023, the Ministry of New and Renewable Energy has issued the National Green Hydrogen Mission to make India a Global Hub for Green Hydrogen production, usage, and export of green hydrogen and its derivatives.

Your Company has reported a standalone net Profit After Tax (PAT) ofRs. 612.15 Crores and consolidated PAT ofRs. 678.97 Crores for the year ended 31^st March 2024 as against a standalone PAT of Rs. 800.12 Crores and consolidated PAT ofRs. 870.16 Crores for the year ended 31^st March 2023. Revenue from operations for FY 2023-24 decreased to Rs. 5,046.04 Crores as compared to Rs. 5,793.95 Crores in the previous year, i.e. FY 2022-23 due to drastic dip in Liner market and to some extent in the Bulk segment. Acuite Ratings and Research has upgraded the credit rating of your Company to AA+, which is the second highest rating. Rating upgrade to AA+ has been restored after a period of 12 years (Last AA+ was in Nov. 2011).

Government of India established International Financial Services Centres Authority (IFSCA) in 2020 under the International Financial Services Centres Authority Act, 2019, at GIFT City, Gandhinagar, Gujarat as a unified authority for development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India. The Board of Directors of your Company in its meeting held on 09.02.2024 accorded in-principle approval for the formation of a wholly owned subsidiary ("WOS") of the Company at GIFT City. The Ministry of Ports, Shipping and Waterways vide Letter no. SS-11027/1/2024-SU dated 01.08.2024 have communicated the approval of Competent Authority in this regards. Consequently, wholly-owned subsidiary of Shipping Corporation of India Limited, has been incorporated effective August 12, 2024 with the name Rs.SCI Bharat IFSC LimitedRs. bearing CIN of U64990GJ2024GOI154335. Your Company is undertaking further expeditious actions in this regard.

During the year, your company disposed-off two of its Product Tankers, namely MT Suvarna Swarajya and MT Sampurna Swarajya, after their useful life. In order to augment the existing fleet, your company has envisaged acquisition of secondhand / resale / new vessels in various segments viz. Container, Gas, Product Carrier, Offshore vessels etc. Your company has also been scanning the market continuously for right assets in the market in relation to the available employment opportunities and is optimistic about acquisition of vessels at the opportune time.

Your company has initiated a major IT infrastructure upgradation drive to not only harness the advantages of Digitization but also to protect it from globally increasing cyber threats. During the year, Email Software and Hardwares have been upgraded. E-Office along with new systems are being rolled out for day to day operations of the company. Further, Data Centre and Disaster Recovery site are also under contemplation for their upgradation and refresh.

Your company considers its Human resource as its most significant asset and continuously endeavors to identify and assimilate bright and enthusiastic minds, All skill gaps, groom them to build a technically sound work force with the ability to adapt to modern challenges and technology. Ministry of Ports, Shipping and Waterways (MoPSW) appreciating the significance of a motivated future ready workforce has restored the age of superannuation of employees of your company from 58 to 60 years, thereby providing an edge to your company in attracting and retaining a qualified, competent and motivated workforce. Demerger and Strategic Disinvestment of SCI

Your Company has been identified for strategic disinvestment by the Government of India. Transaction Advisors, Asset Valuers and Legal Advisors have been appointed by the Department of Investment and Public Asset Management (DIPAM) of Ministry of Finance. DIPAM had floated a Preliminary Information Memorandum (PIM) for inviting Expression of Interest on 22^nd December 2020.

Subsequently, Shipping Corporation of India Land and Assets Ltd (SCILAL) was incorporated in November 2021 for hiving off the Non-Core Assets of the Company as a part of the Demerger under SCIRs.s strategic Disinvestment process. Further, Ministry of Corporate Affairs (MCA) has vide order dated 22.02.2023 approved the Scheme of Arrangement for Demerger between Shipping Corporation of India Limited and Shipping Corporation of India Land and Assets Limited (SCILAL). The Shipping Corporation of India Land and Assets Limited (SCILAL), the Resultant Company formed out of the Demerger Transaction is now a separate CPSE under Rs.Schedule CRs. Category and is also a Listed Entity from 19.03.2024. The operations of SCILAL are presently managed by SCI under service level agreement.

Your CompanyRs.s values as a socially responsible organization are well entrenched and widely acknowledged. Your company aims to be a corporate with its strategies, policies and actions aligned with wider social concerns. Emphasis this year, has been on health & nutrition, women empowerment, environment, education, skill development, promotion of sports, and other areas of social upliftment.

Affirming its commitment to energy and maritime security of the Country, your companyRs.s vessel "Swarna Sindhu" became the first vessel to be flagged off from ONGC Krishna Godavari Basin and "Desh Bhakt" became the first vessel to discharge crude oil at the newly commissioned N1 SPM at Vadinar. On 26^th March 2023, your companyRs.s OSV Rs.SCI Mukta¹, was positioned in

Indian Ocean with ISRO officials on-board to monitor the real-time launch of ISRORs.s LVM3-M3 "One-Web India - 2 Mission".

I am delighted to announce that your companyRs.s significant contribution and pioneering work has been commended on the occasion of National Maritime Day 2023 wherein your company was conferred with the awards for Outstanding Indian Ship Owning Companies (1^st Rank) and Outstanding Indian Employers of Seafarers (1^st Rank). During the year, your company has also been facilitated with "Shipping Company of the Year Award" at 10^th Samudramanthan Award, "Tanker Operator of the Year" by ShipTek, "Environment & Sustainability Award" and "CMD Leadership Award" by Governance Now. Your companyRs.s significant contributions have also been acknowledged during 10^th Maritime Standard Awards. Your CompanyRs.s commitment and efforts towards implementation of official language and Women development has also been recognized by the Ministry of Ports, Shipping and Waterways, and WIPS (SCOPE) respectively.

Your Company has a legacy of fair, transparent and ethical governance practices and it believes that good Corporate Governance is essential for achieving long-term corporate goals and to enhance stakeholdersRs. value. The Report of Directors on Corporate Governance placed in the DirectorsRs. Report comprehensively describes the structure and practice of Corporate Governance of your Company. In addition to complying with the requirements of Corporate Governance emanating from various statutes, rules and regulations, your Company is also in compliance with the DPE guidelines on Corporate Governance. The Corporate Governance issues are kept in constant focus by the Board of Directors of your Company and your Company complies with the applicable guidelines both in letter and spirit.

I would like to express my gratitude to the Government of India for its support to your Company. I wish to sincerely thank the HonRs.ble Minister of Ports, Shipping and Waterways, Shri. Sarbananda Sonowal and HonRs.ble Minister of State for Ministry of Ports, Shipping and Waterways Shri Shripad Naik and Shri Shantanu Thakur for their leadership and consistent support provided to your company. I would also like to express my gratitude towards Secretary (MoPSW) for his guidance and support. My sincere thanks are also due to the other officials of the Administrative Ministry, other Ministries and Departments of the Government of India. I would also like to express my gratitude towards the Directorate General of Shipping for its support and understanding of various problems being faced by the Indian Maritime Sector and specifically by your Company. I also wish to express my special appreciation towards all the shareholders, stakeholders, my colleagues on the Board of Directors and all the floating and shore employees for their continued support over the years.