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 after another year of growth of our
Company. We present to you the 73rd Annual Report of the Company. The global maritime
sector during the financial year 2022-23 was riddled with various challenges like
inflationary pressures impacting the consumption patterns, continued geo-political risk
due to war, compliance of IMO regulations for de-carbonization etc. However, the
challenges on the other hand, have also given opportunities in the global maritime sector
and few segments like tankers, which had faced tremendous impact during the COVID
pandemic, bounced back, providing excellent returns to the tanker owners.
A well-diversified fleet has always been the strength of your Company
and during the last three financial years, it has given agility to your company to
navigate through one of the most challenging global economic crisis and continue to emerge
as a well-established and matured player in the global maritime industry. On analysing the
short term view of the last three financial years, it can be realised that while
containers and bulk carriers segment played crucial role in performance of your company
during FY 2020-21 and FY 2021-22, the impressive financial performance of your company for
FY 2022-23 was ruled by the tankers. The 78% of your company's tonnage comprise of
diversified range of tankers of different sizes serving in multiple segments of crude oil,
product and gas transportation on the coastal routes as well as in the international
trade. The consistent performance of SCI vessels has ensured that during the financial
year 2022-23 your company has been successful in earning the highest level of Revenue from
Operations in the last 17 years as well as the highest level of Profit After Tax in the
last 14 years. 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.
Shipping Scenario & Operations
Shipping works on derived demand basis that means the demand for ships
is dependent on the demand for cargoes that are carried on the ships and thus the global
economic activities play a significant role in the demand for ships. The world GDP during
2022 grew by 3.4% and during 2023, it is expected to grow by about 2.8%. The GDP growth in
the advanced economies was slower, whereas the emerging markets and developing economies
have exhibited relatively strong growth. The global trade volume (goods and services)
growth has been decent at
5.1% in 2022 and is expected to be about 2.4% in 2023.
Globally, the average seaborne trade (inclusive of both crude oil and
refined products) exhibited a handsome rise of 3.78% in year 2022. The Crude Oil trade
increased by 4.21% and the Product trade grew by 2.57% in the year 2022. The tanker
markets enjoyed a remarkable run in 2022 and the robust demand is expected to keep the
tonnage utilization high during year 2023. China's economy has fully opened with the
lifting of COVID lockdowns, hence, the demand for oil has increased. Further, due to
increase in the transportation of Russian crude oil to India and China, the tanker
tonne-mile demand has boosted, which has led to the bouncing back of tanker markets during
year 2022 and 2023. As per the IMF estimates, Indian economy is expected to grow by 5.9 %
in the current fiscal year, making it the fastest-growing economy in the world. A sharp
recovery in industrial activity in India meant a sharp rise in oil demand and thus, over
the past two years, growth has been witnessed in India's oil imports. The buoyant
freight market in the last year has spurred on the activity in the primary and secondary
tanker markets, as many buyers encourage to place orders for new-building tankers. As a
result, the new building prices of both crude oil as well as product tankers have
increased by about 16%. The dry bulk trade registered a significant dip of 3.67% in gross
cargo quantity over the course of year 2022. The war between Russia and Ukraine pushed up
the commodity prices significantly. Higher commodity prices and lockdown in China impacted
demand in the dry bulk cargo segment. In 2023, a moderate expansion in global seaborne
trade of 2.3% is expected with trade in tonne - miles projected to grow by 2.6%. The total
dry bulk fleet has grown by about 2.39% in 2022 and further expected to grow at 2.7% in
year 2023. The Dry bulk charter rates have fallen quite a bit in early 2023. As China
reopened, tonnage demand for dry bulk cargoes went up. Meanwhile, conversely the
congestion at Chinese ports eased up. Hence, dry bulk tonnage supply also increased, and
as a result, there was a little see-saw effect on the charter hire of dry bulk carriers at
the beginning of the year 2023. With regard to Indian dry bulk cargo movement, the import
for non-coking coal increased by 30% in FY 2022-23, whereas the Iron Ore export declined
by about 19.5%. The construction sector in India is increasing and as a result, demand for
steel has picked up.
Container Freight rates in 2022-23 have fallen substantially from
record high levels of 2021- 2022 due to factors like sluggish demand, easing of supply
chain bottlenecks and sharply rising fleet growth. During March 2023, freight rates for
Asia North America West Coast trade fell by 8%, Asia North America East coast trade
reduced by 10% and Asia-Europe trade fell by 17%, as compared to February 2023. Global
Carriers expect annual container demand to further shrink by 2%-4% in 2023, leading to a
further decrease in the freight rates. The container shipping fleet is set for a strong
growth and it is estimated that the global containership order-book has reached 7.53
million TEU, or 30% of the existing fleet. The majority of the vessels on order are
scheduled to be delivered in 2023 and 2024. Deliveries of new ships are expected to far
outpace growth in demand next year, indicating a continued fall in freight rates.
Similarly, coastal service in India has also witnessed a drop in freight rates as well as
cargo carried during FY 2022-23 due to deployment of additional tonnage on Indian coast
& reduction in cargo demand. The Offshore segment was also impacted due to global
economic turmoil, recessionary trends in many developed economies, impact of
Russia-Ukraine war, etc. In India, during FY 2022-23, the offshore
activities remained subdued with only few selective opportunities for employment of
offshore vessels. However, with the continuous volatility and mixed trend shown by crude
oil prices, the coming year is expected to generate increased opportunities for employment
of offshore assets. In Indian scenario, ONGC is expected to come up with many tenders with
long term requirements for its offshore assets. Also, more requirements, albeit short
term, are emanating from private operators
/ contractors in the Indian offshore market.
For boosting the maritime sector in India, the Government has
formulated a Maritime India Vision 2030 which focuses on over 150 initiatives across 10
themes covering all the facets of the Indian maritime sector and is a comprehensive effort
to define and meet national maritime objectives. Further, Government's landmark
initiatives, such as Sagarmala, Gati Shakti, National Logistics Policy 2022, Maritime
India Summit, National Logistics Portal (NLP) Marine, Sagar-Setu' App version
of NLP, Sagar Manthan portal, Atmanibhar Bharat and Make in India, are channelizing India
towards the trajectory of growth while encouraging the Indian maritime sector to enhance
its productivity and cost efficiencies. Recently, it was reported that the average dwell
time of containers at Indian port has reduced to 3 days, which is less in comparison to
countries like UAE, South Africa, USA and Germany. Very low dwell time at Indian Sea Ports
is an outcome of reforms under taken by the Country in the shipping sector to enhance port
productivity and improve visibility of the supply chain through digitalization.
Green Shipping
Just like any other industry, the Maritime transportation too is
evolving to fit the requirements of new businesses and technologies. The global business
communities are growing more and more conscious towards conservation of the environment
and, in this direction, the International Maritime Organization (IMO) has already
implemented the Green House Gas (GHG) strategy in 2018, which aims to reduce the
carbon intensity caused by international shipping. The strategy aims to reduce sea
freight-related carbon emission by 40% by 2030 and 70% by 2050, compared to 2008 levels.
It can be foreseen that the newer types of vessels operating on alternative fuels like
Solar Power, Bio Fuels, CNG, Green Hydrogen, Green Ammonia etc would act as catalyst for
these Green Shipping initiatives in coming future. The Green Shipping
initiatives will require setting up of complete eco-system like manufacturing of suitable
engines, building ships capable of operating on non-fossil based fuels, transportation of
green fuel and energy, setting up of bunkering stations etc. The green shipping eco-system
would also have to deal with issues such as developing of funding sources for green
shipping, consequent impact on the cost (both CAPEX and OPEX) of the maritime
transportation due to green shipping, impact of charter hires of modern green vessels
vis-?-vis older conventional tonnage, transition of global energy centres and also the
subsequent change in the maritime transportation of energy including the trading patterns
and routes.
Our country has pledged to reduce the emissions intensity per unit GDP
by 33-35% below 2005 level by 2030. Also, India has set the target to achieve 40% national
energy through renewable sources by 2030. 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 with participation of all stakeholders. Further, in January 2023,
the Ministry of New and Renewable Energy has issued the National Green Hydrogen Mission.
The objective of this mission is to make India a Global Hub for Green Hydrogen production,
usage, and export of green hydrogen and its derivatives. It is indeed a pride for all of
us that under the pilot project for shipping for the National
Green Hydrogen Mission; your company has been assigned to retro fit at
least two ships to run on Green Hydrogen derived fuel by year 2027.
Financials
Your Company has reported a standalone net Profit After Tax (PAT) of
Rs. 800.12 Crores and consolidated PAT of Rs. 870.16 Crores for the year ended 31st March
2023 as against a restated standalone PAT of Rs. 790.11 Crores and restated consolidated
PAT Rs. 860.54 Crores for the year ended 31st March 2022. The PAT reported for FY 2022-23
is the highest PAT your company has earned in the last 14 years. Further, during the FY
2022-23, your company earned Revenue from Operations of Rs. 5,794 crores, which has
significantly increased by about 16% over the figures of FY 2021-22. The Revenue from
Operations in FY 2022-23 is the highest level of revenues, your company has achieved in
the last 17 years.
Dividend
Your Company continued its spirit of buoyancy this year too and the
Board of Directors, giving due consideration to sustainability on all accounts, has
recommended a dividend of Re. 0.44/- per equity share of face value of Rs. 10/- each
subject to your approval at the Annual General Meeting. The Board of Directors remain
grateful to all the stakeholders for the unstinted support, faith and patience reposed in
it to deliver. We continue to remain responsible for maintaining and sustaining the
momentum gained while we surpassed our previous performance, overcoming the adversities.
Acquisitions and Disposals
Your company has envisaged acquisition of secondhand vessels in various
segments. Accordingly, your Company floated a global tender for acquisition of one
Platform Supply Vessel (PSV) of up to 10 years old considering requirements from Charterer
for a specific type of vessel. Based on the bid received, if the offered vessel meets the
technical & commercial requirements, the vessel is planned to be acquired during the
next financial year i.e. FY 2023-24. Informatively, your company has been continuously
scanning the market for right assets in relation to the available employment opportunities
and is optimistic about acquisition of vessels at the opportune time.
During the financial year 2022-23, there were no disposal/ scrapping of
any vessel. However, your Company has sold one tanker vessel MT Sampurna Swarajya of
32,950 dwt on 11.08.2023.
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 22ndDecember 2020.
Shipping Corporation of India Land and Assets Ltd (SCILAL) was incorporated in Nov 2021
for hiving off the Non-Core Assets of the Company as a part of the Demerger under
SCI'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 Scheme of Demerger is effective from 14th March 2023. Pursuant to
allotment of shares to the Shareholders of SCI in the ratio of 1:1, currently SCILAL is
progressing towards obtaining the SEBI approval for Listing of shares on National Stock
Exchange Limited (NSE) and Bombay Stock Exchange Limited (BSE).
Corporate Social Responsibility
Your Company's values as a socially responsible organization are
well entrenched in its activities. The emphasis this year, has been on health &
nutrition, women empowerment, skill development, promotion of school education for
underprivileged children and maritime education for weaker sections of the society,
eradication of hunger and malnutrition, health care, environment sustainability and other
areas of social upliftment. To reinforce Nation's fight against Covid-19, your
company has provided free booster dose vaccines to all eligible beneficiaries. Your
company further supported in the Assam flood relief campaign by providing relief material
to the flood affected people. To support the environment & sustainability, your
company undertook urban plantation of more than 7,000 plants at Delhi/ NCR.
Corporate Governance
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 stakeholders' value. The Report of Directors on
Corporate Governance placed in the Directors' 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.
Important Developments
International Day for Women in Maritime All Women Officer sailing on M
T Swarna Godavari: Prelude to the 1st International Day for Women in
Maritime observed by IMO on 18th May every year, an all women officer sailing on board M T
Swarna Godavari was organised. A function was held on-board MT 'Swarna Godavari' berthed
at Jawahar Dweep (JD-4), Mumbai Port Authority (MbPA) on 14th May, 2022. With this, your
company has demonstrated for the 2nd time its well-entrenched Diversity and
Integrity principles and recognition of women seafarers affording them visibility and
supporting a barrier-free working environment
Delivery of 2nd 500 PAX vessels of A&N Administration: The
second 500 PAX vessel of Andaman and Nicobar Administration M.V. Nalanda was delivered on
05.07.2022. The vessel is built at Cochin Shipyard Ltd, Kochi. Your company as Technical
Manager was actively involved during the shipbuilding process and further the Operation
and Management (O&M) is also being done by SCI. M.V. Nalanda sailed on its maiden
voyage from Kochi anchorage to Port Blair on 22.07.2022.
Vigilance Awareness Week 2022: The Vigilance Awareness Week
(VAW)-2022 on the theme 'Corruption Free India - for a developed Nation was observed in
SCI from 31.10.2022 to 06.11.2022. The valedictory function of Vigilance Awareness Week
(VAW)-2022 was held on 05.11.2022 at Shipping House, Mumbai. Hon'ble Central
Vigilance Commissioner of India Shri Suresh N Patel graced the valedictory function as the
Chief Guest.
Letter of Appreciation from DRDL, Ministry of Defense: DRDL
appreciated efforts of vessel owned by your company SCI Saraswati for
participating in BRAHMOS mission carried out on 28.12.2022. DRDL especially mentioned that
SCI Saraswati's participation in the mission was very crucial and extremely vital in
the decision making process and helped the mission Director to control the time critical
launch operation, which is highly needed for these kind of missions.
SCI's contribution in ISRO's LVM3-M3 One-Web India-2 Mission: On
26.03.2023, ISRO/NSIL (New Space India Ltd - commercial arm of ISRO) launched encapsulated
36 low earth orbit satellites successfully from Sriharikota using Launch Vehicle Mark III
(LVM3-M3)/ OneWeb India-2 Mission. Your company owned AHTSV SCI Mukta was
engaged in the mission by ISRO for Transportable Telemetry Tracking operation. SCI Mukta
was positioned in south mid of Indian Ocean with eight ISRO scientists onboard to monitor
the real-time launching of satellites. The mission was successfully accomplished.
Government e-Market Place (GeM) Procurement: I feel proud to inform
that your company was able to exceed the target of Rs. 55 crores for GeM procurement set
by the Government during FY 2022-23. The Government e-Market Place (GeM) appreciated your
company for successfully carrying out total purchase of Rs. 78 crores from beginning of
financial year till 28th Feb 2023 using the Government e-Market Place platform through its
twitter handle on 31.03.2023.
India - Maldives Shipping Service: In accordance to the vision of
Hon'ble Prime Minister of India, your company has been operating a first ever direct
cargo ferry service between India and Maldives since September 2020. This service has
boosted the bilateral trade between the two countries. The services were provided through
an in-chartered vessel MCP Linz which has been re-delivered to the owner. During March
2023, your company in-chartered a Maldivian flagged containership namely M.V. MSS Galena
for deploying in India Maldives sector. The newly in-chartered vessel M.V. MSS Galena was
flagged off on 05.05.2023 at Tuticorin Port by Shri. Shantanu Thakur ji, Hon'ble
Minister of State for Ministry of Ports, Shipping and Waterways from VOCPA Tuticorin Port.
Search and Rescue Operations: a. On 10.07.2022, your company owned
AHTSV SCI Urja successfully rescued 16 fishermen onboard two distressed
fishing boats in record time against all odds and heavily inclement weather conditions.
The rescued personnel were handed over to the Indian Coast Guard Ship CG 438 on the next
day. During the stay of the rescued personnel onboard, they were provided food, water,
shelter and medical support. The entire operation was carried out to the satisfaction of
Charterer and Indian Coast Guard.
b. On 31.08.2022 @ 0005 hrs as per instructions from KAVARATTI Port
Control, UTLA owned and your Company Managed vessel MV Lagoons carried out
rescue operations and safely rescued 12 fishermen onboard fishing vessel Saffereena.
c. Your Company managed and UTLA owned vessel Sagar Samraj
was able to rescue crew on board fishing boat Kuthubuzaman off Andorth Lakshadweep on
intervening night of 17/18 Jan, 2023. All crew members were safely handed over to Coast
Guard vessel. Maritime Rescue Coordination Centre (MRCC) acknowledged and appreciated the
noble act rendered by Sagar Samraj.
Azadi Ka Amrit Mahotsav Celebrations
To commemorate the 75 years of Independence of the progressive India
and its glorious history encompassing its people, culture and achievements, your company
celebrated the Azadi Ka Amrit Mahotsav (AKAM) with great fervour. A series of activities
were organized by your Company to celebrate the milestone, such as organizing employees
and family welfare program on Career Guidance, Nutrition & Exercise, Self Defence
Techniques. Your company has celebrated International Mother Language Day, Organized
health check-up camps at Head Office & Regional Offices, under Har Ghar Dhyan Campaign
conducted Yoga Sessions. The International Day of Yoga 2023 this year was celebrated under
the theme Yoga SAGARMALA. Various activities including physical Yoga and
sessions on benefits of Yoga by eminent
Yoga teachers/ faculty were conducted for employees & all
stakeholders.
Awards & Accolades bestowed upon your company during FY 2022-23
On the eve of National Maritime Day Celebration on 05.04.2022, SCI was
conferred with prestigious Sagar Samman Awards for following
categories:
a. Best Indian Ship-Owning Company'
b. Best Indian Employer of Seafarers'
SKOCH Public Sector Undertaking Award - Gold for execution of the
project All Women Officers sailing on M.T. Swarna Krishna' on 09.04.2022
During the Marex Maritime Women Empowerment Awards 2022 which
were held on 18.05.2022 to celebrate the inaugural International Day of Women in Maritime
proclaimed by the IMO, following awards were received:
a. Excellence in Gender Diversity to the Shipping
Corporation of India
b. Woman of Exemplary Courage to ex-CMD SCI.
On 11.11.2022, SCI received Shipping Company of the Year
Award during the 9thSamudra Manthan Awards 2022 in Mumbai.
On 12.11.2022, under the aegis of SCOPE, SCI was awarded 3rd
Prize for the Best Activity Report for the period Oct 21 to Sept 22 during the
30thRegional Meet of Western Reg-WIPS Forum.
On 25.11.2022, SCI was awarded Best Employer of the Year
(Indian Flag)at Seajob Indian Anchor Awards 2022.
On 10.02.2023, SCI received Best Enterprise Award Navratna
Category during the 33rd National meet of Forum of Women in Public Sector (WIPS)
at Kolkata.
During the concluding ceremony of the 60th National Maritime Day
on 5th April 2023, SCI was conferred with following two prestigious awards:
a. Recognition for Outstanding Indian Ship Owning Companies as 1st
Rank
b. Recognition for Outstanding Indian Employers of Seafarersas 1
st Rank
Additionally NMDC Committee (Kochi) has also honoured SCI with
appreciation award for cooperation and support extended to the Shipping industry, Kochi.
During the 18th ShipTek Awards 2023held on 25.05.2023
at Kochi following awards were received by SCI: a. SCI was conferred with Tanker
Operator of the Year Award.
b. CMD SCI was bestowed with Lifetime Achievement
Award.
Global Maritime India Summit 2023
I take this opportunity to also announce that the Ministry of Ports,
Shipping and Waterways has organized Global Maritime India Summit 2023 from
17th to 19th October 2023 at Pragati Maidan, New Delhi. This will be the third edition of
the summit. The first two editions of the summit which were organized in 2016 and 2021
respectively had received overwhelming response from national and international maritime
business communities. The summits have been successful in attracting investments in Indian
maritime sector. A curtain raiser of the Global Maritime India Summit 2023 was held in
Mumbai on 18thJuly 2023, which was inaugurated by Shri Sarbananda Sonowal, Hon'ble
Minister for Ports, Shipping and Waterways and AYUSH. I urge you all to participate in the
upcoming Global Maritime India Summit 2023 and make the event successful.
Acknowledgements
I would like to express my gratitude to the Government of India for its
support to your Company. I wish to thank the Hon'ble Minister of Ports, Shipping and
Waterways and Minister of AYUSH, Shri. Sarbananda Sonowal and Hon'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.
Capt B.K. Tyagi |
Chairman and Managing Director |