Dear Shareholders Ladies and Gentlemen
On behalf of the Board of Directors of The Shipping Corporation ofIndia Ltd I welcome you all to the 72nd Annual General Meeting of your Company. It is aproud moment for all of us as Your esteemed company has completed 60 glorious years inservice of our nation on 2nd October 2021. I wish to convey my special complements to allthe shareholders for the success that Your company has achieved during past six decades bypioneering into various segments of Maritime transportation which has not only supportedIndian Economy but has immensely contributed towards nation building while ensuringself-sustenance of our country in maritime industry. The Diamond celebrations were markedwith great fanfare and enthusiasm with concluding ceremony being graced by Shri.Sarbananda Sonowal the Hon'ble Minister for Ports Shipping & Waterways andAYUSH as the Chief Guest and Shri. Shantanu Thakur Hon'ble Minister of State forPorts Shipping & Waterways as Guest of Honour. It gives me immense pleasure to placebefore our esteemed shareholders the 72nd Annual Report of your Company for the financialyear 2021-2022. The financial year 2021-22 had post COVID reminiscence and the beginningof the year witnessed lockdowns being rolled back in phased manner by many countriesacross globe. As the global economies reopened there was rebound witnessed in globalmerchandise trade and shipping industry which works on principles of derived demand had adeep positive impact with freight rates in liner and bulk segments touching historicalhigh levels. While the geopolitical situation arising from the Russia Ukraine war crisiswhich started in February 2022 shall have a bearing on shipping industry your companywith its diversified fleet is poised towards taking advantage of market opportunitiesemerging from the global shipping outlook. I am glad to inform that your company had asplendid performance during the financial year 2021-22 and I am pleased to summarise someof the key highlights of your company during FY 2021-22.
Shipping Scenario & Operations
The World has seen some resilience in year 2021-22 as the economicactivities recovered from the Covid-19 pandemic. The Global growth was estimated to 6.1%during calendar year 2021. All major trading economies saw imports and exports rise abovepre-pandemic levels in the fourth quarter of 2021 with trade in goods increasing morestrongly in the developing world than in developed countries. The global trade reflected astrong increase of 10.1% by volume in 2021 in comparison to 2020 which has led to apparentincrease in total seaborne trade during the same period. The growth rates indicated signsof recovery but it was not uniform across all segments such as seaborne oil trade (crudeoil and refined products) which continued to decline in 2021. However in view of thegeo-political issues like the Russia-Ukraine conflict lockdowns in China supply-chaindisruptions and the risk of stagflation across many countries the forecasts of globalgrowth has been downgraded to 3.6% and the global trade volume by 5.0% in 2022. The warbetween Russia and Ukraine has pushed up the commodity prices significantly. Highercommodity price inflation is likely to affect lower income countries the most and sincethese countries tend to be net importers of dry bulk commodities it is likely to havesome implications on their dry bulk demand. In 2021-22 container volumes bounced backquickly as consumer demand increased boosted by stimulus packages and measures to supportincomes during COVID-19. Bounce-back brought along with it a shift in consumption patternsaway from services and more towards goods. This surge in trade however resulted inseveral logistical bottlenecks globally and in 2021 whole industry including shippingports shippers and inland carriers struggled with shortages in containers transportequipment like chassis and space on container ships. This has added to severe portcongestion across several ports globally and reduced service levels and carrierreliability while exponentially increasing freight rates and surcharges. The impact ofCOVID induced lockdown continued to have impact on E&P activities along Indian Coastwhich impacted the specialised offshore segment with few selective opportunities foremployment of these vessels in the country. However there was a recovery in the E&Poperations as the crude price touched US$ 100 per barrel by the end of the year 2021-22.With positive indication from E&P companies to enhance production the utilization foroffshore vessels is expected to increase. India's GDP in 2021 has rebounded from theslump in 2020 and surpassed China's GDP growth rate in 2021. India's import andexports have significantly rose in the year 2021-22. The year 2021-22 observed areasonable increase in the quantum of Cargo Traffic at India's 13 major portsmajorly contributed by was P.O.L. (Petroleum Oil & Lubricants) followed by Containertraffic Thermal & Steam Coal Other Misc. Cargo Iron Ore & Pellets Coking &Other Coal Other Liquids Finished Fertilizers and Raw Fertilizers. This improvement inport performances is the result of many strategic measures initiated by the Ministry ofPorts Shipping and Waterways focused towards elevating the performance of Indian portssuch as mechanization of the terminals focus on improving the TAT (turn-around time)efficient cargo movement adoption of new technology with special thrust on coastaltransportation expansion/modernization of port-related infrastructure and skilldevelopment of port employees.
Going ahead the factors like war between Russia and Ukraine high oilprices recurrence of lockdown in China and overall sluggishness in economy due tomonetary policy tightening are expected to keep the Crude Oil Tanker market underpressure. However the demand for the Product Tankers is expected to increase incomparison to 2021 as the Russian refined products are unacceptable to Western countriesand thus they will source Petroleum Products from alternative locations boosting the tonnemiles of Product Tankers. The dry bulk segment has recovered remarkably during 2021 andfactors like strong trade growth and tapering dry bulk carrier are expected to maintainhigher rates in this segment. The Liner trade is also expected to keep the momentum asIndia's exports have surpassed pre-COVID levels during 2021-22 and the union Budget2022-23 has emphasized long-term potential for Indian exports. Further focus on increasingshare of coastal shipping in cargo transportation in India is also expected to contributetoward growth of Liner/ Container trade during 2022-23. For boosting the maritime sectorin India Government has formulated a Maritime India Vision 2030 which focuses on over 150initiatives across 10 themes covering all the facets of the Indian maritime sector and isa comprehensive effort to define and meet national maritime objectives. FurtherGovernment's landmark initiatives such as Sagarmala Gati Shakti Atmanibhar Bharatand Make in India shall definitely propel Indian maritime industry toward newer horizonsof success in coming year.
Your Company has reported a stand-alone net Profit After Tax (PAT) ofRs. 794.79 Crores and consolidated PATof Rs. 865.22 Crores for the year ended 31st March2022 as against a standalone PAT of Rs. 618.10 Crores and consolidated PAT Rs. 696.09Crores for the year ended 31st March 2021. The revenue from operation has significantlyincreased by 35% during FY 2021-22 vis-a-vis FY 2020-21. Further Your Company hasreported highest Operating Revenue of last two decades and highest PAT of last 13 years inFY 2021-22. It is also a matter of pride to share that your company is first CPSE inNavratna/ Maharatna category to declare Annual Results for the third consecutive financialyear.
Your Company continued its spirit of buoyancy this year too and theBoard of Directors giving due consideration to sustainability on all accounts hasrecommended a dividend of Rs. 0.33/- per equity share of face value of Rs. 10/- eachsubject to your approval at the Annual General Meeting. The Board of Directors remainsgrateful to all the stakeholders for the unstinted support faith and patience reposed init to deliver. We continue to remain responsible for maintaining and sustaining themomentum gained and while we surpassed our previous performance overcoming theadversities.
Acquisitions and Disposals
The present fleet of Your Company comprise of 59 vessels. There were nonew acquisitions or scrapping of vessels during FY 2021-22. Your Company has over theyears has successfully retained its Numero Uno' position in Indian Shipping andhas been a frontrunner in terms of growth diversification and replenishment of itstonnage. The average age of Your Company's fleet is less than average age of Indiantonnage. Augmentation of tonnage through acquisition of vessels is continually beingexplored subject to the favourable market conditions and economic viability. During FY2021-22 Your Company floated tenders for acquisition of 2 nos. of Very Large Gas Carriers(VLGC) of about 12-16 years old and acquisition of up to 10 year old resale/second-handOSV. However the tenders floated did not elucidate desired bid and thus Your Companyshall continue scanning S&P markets for the acquisition opportunities.
Strategic Disinvestment of SCI
Your Company has been identified for strategic disinvestment by theGovernment of India. On 10th November 2021 SCI incorporated a wholly owned subsidiary"Shipping Corporation of India Land and Assets Limited" (SCILAL) pursuant toapproval of Board of Directors based on the concurrence given by the Ministry of PortsShipping and Waterways and NITI Aayog for hiving off the Non-Core Assets of the Company asa part of the Demerger under SCI's strategic Disinvestment process. The Scheme ofDemerger has been approved by the SCI Board DIPAM MoPSW SCILAL Board and stockexchange. The Demerger Scheme has been filed with Ministry of Corporate Affairs (MCA) forapproval.
Corporate Social Responsibility
Your company's values as a socially responsible organization arewell entrenched in its activities. The emphasis this year has been on health &nutrition with a special focus on Covid-19 related measures promotion of school educationfor underprivileged children and maritime education for weaker sections of the societyeradication of hunger and malnutrition women empowerment skill development health careenvironment sustainability and other areas of social upliftment. To reinforceNation's fight against Covid-19 your company has generously contributed towardsstrengthening healthcare infrastructure in the country by donating oxygen generatingplants ventilators and PPE kits.
Your Company has a legacy of fair transparent and ethical governancepractices and it believes that good Corporate Governance is essential for achievinglong-term corporate goals and to enhance stakeholders' value. The Report of Directorson Corporate Governance placed in the Directors' Report comprehensively describes thestructure and practice of Corporate Governance of your Company. In addition to complyingwith the requirements of Corporate Governance emanating from various statutes rules andregulations your Company is also in compliance with the DPE guidelines on CorporateGovernance. The Corporate Governance issues are kept in constant focus by the Board ofDirectors of your Company and your Company complies with the applicable guidelines both inletter and spirit.
In compliance with the IMO's Ballast Water Management ConventionYour Company is in process of installing the Ballast Water Treatment System (BWTS) on its40 foreign going vessels. Installation and commissioning of BWTS has been completed on 15foreign going vessels and for other vessel BWTS fitting will be undertaken commensuratewith their dry-docking schedule. Informatively 11 foreign going vessels were fitted withBWTS by 31.03.2022. Your company's vessels M.T. Swarna Sindhu and M.V. SCI Sabarmatiwere part of the prestigious 12th Fleet Review by Hon'ble President of India &Supreme Commander of Indian Armed Forces along with other Indian Navy Fleet duringFebruary 2022.
In accordance to approval received from A&N Administration in July2021 Your Company has taken over the officer manning of the 17 nos. Foreshore vessels.Foreshore Vessels are lifeline for inter-island connectivity in Andaman and Nicorbar andthus Islanders will be benefitted by uninterrupted services offered by Your Company. Toovercome high freight rates shortage of containers and for catering to the requirementsof Indian exporters Your Company deployed its container vessel M.V. SCIChennai' on direct "India Middle East Shipping Service". This service willconnect East & West Coast of India with Middle East ports of Jebel Ali and Hamad andwill also cater to other ports in Persian Gulf. The service was flagged off byHon'ble Minister MoPSW during SCI's Diamond Jubilee Celebration function held on3rd Oct 2022. Your company executed an agreement with Union Territories of LakshadweepAdministration (UTLA) in February 2022 for Operation and Management (O&M) of 21 nos.diversified fleet of vessels comprising Passenger vessels High Speed Passenger CraftsPOL vessels Cargo vessels and Harbor Tugs. In March 2022 a historic Memorandum ofUnderstanding (MOU) was signed between Inland Waterways Authority of India (IWAI) &Inland & Coastal Shipping Ltd (ICSL) a wholly owned subsidiary of Your Company fortaking over of two RO-RO vessels M.V. Gopinath Bordoloi & M.V. Sankar Dev of IWAI. Inyet another historical event showcasing and promoting Diversity and Inclusivity (D&I)in the Global Shipping Industry Your Company successfully organized All WomenMerchant Officers' sailing on M.T. Swarna Godavari for celebrating the Inaugural IMOInternational Day for Women in Maritime. This is second such event in succession. Thevessel was flagged off from Jawahar Dweep oil terminal Mumbai on 14th May 2022 by Smt.Meenakashi Lekhi Hon'ble Union Minister of State Ministry of External Affairs andUnion Minister of State Ministry of Culture. India - Maldives Cargo Shipping Service wasjointly launched on 21.09.2020 adding a new chapter in the connectivity initiatives takenby both the countries in the Indian Ocean Region (IOR) connecting Indian Ports of Cochinand Tuticorin with Kulhuduffushi and Male.
Azadi Ka Amrit Mahotsav Celebrations
To commemorate the 75 years of Independence of the progressive Indiaand its glorious history encompassing its people culture and achievements your companycelebrated the Azadi Ka Amrit Mahotsav (AKAM) with great fervour. A series of activitieswere organized by Your Company to celebrate the milestone such as talk on freedomfighters quiz to increase awareness of freedom fighting movements programs intended foremployees and family welfare felicitation of Freedom Fighters felicitation of seafarersplantation drive free COVID vaccination camps and participation in AKAM Mega showorganized by Department of Public Enterprise at Gandhinagar Gujarat wherein SCI showcasedits contribution in nation building.
Awards & Accolades bestowed upon your company during FY 2021-22
Amity Excellence Award for Exceptional Leadership was given to Smt.H.K. Joshi C&MD on 28th April 2021.
Your Company received the prestigious NMDC Award on the Occasion ofDay of the Seafarer' celebrated on 25th June 2021 for the historic journey ofM.T. Swarna Krishna being the first Indian Flag vessel with all Women Officers on board.
The Central Board of Indirect Taxes and Customs issued a certificate ofappreciation to Your Company for prompt filing of returns and payment of GST up to31.03.2021.
Your Company received HR Excellence award during the The Governance Now8th PSU Awards held on 29th July 2021. Smt. H. K. Joshi C&MD SCI received CMDLeadership Award.
During the 5th Edition of India Maritime Awards organized by DailyShipping Times following awards were conferred: a. Your Company was felicitated forcompletion of 60 glorious years. b. Your Company was conferred with Runner Up Award forthe Coastal Service Operator of the Year and the Main Line Container Operator of the Yearwith Widest Sector Coverage. c. Smt. H. K. Joshi C&MD received "Woman Star inShipping & Logistics" Award.
Your Company was awarded second prize in "Swachhata Pakhwada"Awards 2019 by the Ministry of Ports Shipping and Waterways During the 11th Maritime& Logistics Awards (MALA) 2021 held on 18th November 2021 Your Company was awarded"Shipping & Logistics Super Brand of the Year Award" and Felicitated for"60 successful years of being the Flagship of Indian Maritime Trade". "TheMaritime Standard Personality of the Year" award was presented to C&MD SCI Smt.H.K. Joshi during The Maritime Standards Awards 2021 Dubai.
National Maritime Search & Rescue Award (NMSAR) for the year2019-20 from the Indian Coast Guard was given to Your Company managed and ONGC ownedOffshore Vessel Col S P Wahi for prompt SAR operation on 4th Aug 2020 saving 16 survivorsfrom abandoned Indian fishing boat Smt H. K. Joshi CMD SCI was awarded "Champion ofDiversity Award" during the Maritime SheEO Conference 2021 held on 25th November2021.
During the 8th Samudra Manthan Awards held on 16th December 2021 YourCompany was awarded Shipping Company of the Year (Indian) and Smt. H. K. JoshiC&MD SCI was honored with "Empowered Women of the Year Award".
Special Jury Award to Woman Role Model in Maritime Industry was givento Smt H. K. Joshi C&MD SCI during the 7th Edition of East Coast Maritime Forum 2022concurrent with Eastern Star Awards 2022 held on 24th February 2022.
Smt. H. K. Joshi C&MD was felicitated with "MaritimePersonality Award of the Year" at Gujarat Star Awards 9th edition during the functionheld on 12th March 2022.
On 22nd March 2022 Smt. H. K. Joshi C&MD was felicitated with CEOwith HR Orientation Award by World HRD Congress.
I would like to express my gratitude to the Government of India for itssupport to your Company. I wish to thank the Hon'ble Minister of Ports Shipping andWaterways Shri. Sarbanand Sonowal and Hon'ble Minister of States of Ports Shippingand Waterways Shri Shripad Naik and Shri Shantanu Thakur for their leadership andconsistent support provided to your company. I would also like to express my gratitudetowards Secretary (MoPSW) for his guidance and support. My sincere thanks are also due tothe other officials of the Administrative Ministry other Ministries and Departments ofthe Government of India. I would also like to express my gratitude towards the DirectorateGeneral of Shipping for its support and understanding of various problems being faced bythe Indian Maritime Sector and specifically by your Company. I also wish to express myspecial appreciation towards all the shareholders stakeholders my colleagues on theBoard of Directors and all the floating and shore employees for their continued supportover the years.
Chairman & Managing Director (A/C)