To the Members

Your Directors have pleasure in presenting the 76th Annual Report on the working of your Company for the Financial Year ended 31st March, 2026.

State of Company's affairs

The Tanker segment recorded revenue of 3,942.23 crore during FY 2025 26, compared to 3,609.60 crore in the previous nancial year. Segment pro t increased signi cantly from Rs. 680.14 crore in FY 2024 25 to 1,189.54 crore in FY 2025 26. While revenue registered a moderate growth, pro tability improved substantially due to favourable market conditions and a higher number of time charter days, resulting in increased earnings. At the same time, improved eet deployment and operational ef ciencies helped optimise operating expenses, leading to a proportionately higher increase in segment pro t than in revenue. The Bulk segment recorded revenue of Rs. 788.87 crore in FY 2025 26 as against Rs. 711.29 crore in FY 2024 25. The segment's loss reduced from 22.24 crore to Rs. 19.11 crore during the year. The increase in revenue was primarily driven by a higher number of voyage charters and a marginal improvement in market conditions. However, the gains were partially offset by higher operating expenses, resulting in only a modest reduction in the segment's loss. Revenue from the Liner segment declined to 784.27 crore in FY 2025 26 from 1,036.23 crore in FY 2024 25. The segment reported a pro t of 74.84 crore, compared to 166.22 crore in the previous year. The decline in both revenue and pro tability was primarily attributable to lower freight rates and reduced cargo volumes during the year. The T&OS segment recorded revenue of Rs. 297.85 crore in FY 2025 26, compared to Rs. 276.19 crore in FY 2024 25. Segment pro t increased marginally from 32.48 crore to Rs. 35.29 crore. Although revenue improved during the year, the increase in pro tability remained modest due to higher operating expenses.

FINANCIAL PERFORMANCE

The comparative position of the working results for the year under report vis - a vis earlier year is as under:

(Amt in Rs. Crore)

The above gures have been extracted from the standalone nancial statements as per Indian Accounting Standards (Ind-AS).

Appropriations :

The working results of your company for the year 2025-26 shows a net pro t of Rs. 1326.25 crore. A sum of Rs. 220 crore has been transferred to Tonnage Tax Reserve. Retained Earnings has been further adjusted for dividend payment of Rs. 609.73 crore during the nancial year 2025-26 which includes nal dividend for FY 2024-25 of 306.96 crore and Interim dividend for FY 2025-26 of Rs. 302.77 crore.

Dividend:

The Board of Directors at their meeting held on 08.05.2026 recommended a Final dividend of Rs. 1/- per equity share of face value of Rs. 10 each i.e. 10% per share on the paid up Capital of the Company. The Dividend will become payable once approved by the shareholders at the ensuing AGM. The said dividend will be paid within 30 days of its declaration at the Annual General Meeting (AGM). The dividend, subject to approval of the Members at the Annual General Meeting scheduled to be held on 23.09.2026 will be payable to those eligible Shareholders, whose names appear in the Register of Members/ list of bene cial owners as on the Record Date. The payment of dividend will be subject to deduction of tax at source.

During the year, the Board of Directors, at its meeting held on 07.11.2025 declared the rst Interim Dividend of Rs. 3/- per equity share of face value of 10/- each i.e. 30% per share, for the Financial Year 2025-26. Thereafter, at its meeting dated 06.02.2026,the Board declared a second Interim Dividend of Rs. 3.5/- per equity share of face value of Rs. 10 each i.e. 35% per share, for the Financial Year 2025-26. Both the interim dividends were paid within the statutory timeline of 30 days from the date of declaration to all eligible shareholders of the Company whose names appeared in the Register of Members/bene cial owners as on the respective Record Dates. The dividend pay-out is in accordance with the company's dividend distribution policy which is available on the Company's below mentioned website. https://www.shipindia.com/upload/policies/SCI_Dividend_Distribution_Policy2.pdf

The policy of the Company is as per the prevalent provisions of laws, rules and regulations.

Share Capital:

The Company has not issued any Equity Shares with differential voting rights. Hence, no information as required under Section 43(a) (ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 is furnished. The Company has only one class of Equity Shares having face value of Rs. 10/- each.

Brief Analysis of Financial Performance

SCI has reported a net pro t after tax of Rs. 1326.25 crore for the nancial year 2025-26. The Tanker segment contributed signi cantly, recording a pro t of Rs. 1,189.54 crore, primarily driven by lower operating expenses resulting from increased charter hire days. Bulk segment has shown improvement over previous year reducing the loss to Rs. 19.11 crore The Liner segment, however, witnessed a decline in performance due to lower freight rates and reduced volumes, with pro t falling to Rs. 74.84 crore in the current year from Rs. 166.22 crore in the previous nancial year.The T&OS segment remained stable, with a marginal increase in pro t to 35.29 crore as compared to pro t of Rs. 32.48 crore in the previous nancial year.

The consolidated net pro t for the company for Financial Year 2025-26 is Rs. 1352.92 crore.

(Amt in Lakhs)

Net Impact on Consolidated profits for the year ended 31 March 2026 is increase of 26.67 crores upon consolidation of above joint ventures and subsidiary companies.

Credit Rating Details:

Subsidiaries and Associates

Your company has two wholly owned subsidiary Companies and has four Joint Venture Companies. Investment in Subsidiary Companies: A) Inland and Coastal Shipping Limited was incorporated on 29th September 2016. B) SCI Bharat IFSC Limited was incorporated on 12 August 2024. Pursuant to section 129(3) of the Companies Act, 2013, a statement containing salient features of our Subsidiary and Associate Companies in form AOC-1 is appended to the Director's Report as Annexure III. In accordance to section 136 of the Companies Act, 2013 the audited nancial statements of the company are available on our website www.shipindia.com PARTICULARS OF HOLDING, SUBSIDIARY& ASSOCIATE COMPANIES

A. Inland and Coastal Shipping Limited

Inland & Coastal Shipping Ltd. (ICSL), a wholly owned subsidiary of The Shipping Corporation of India (SCI), was incorporated on 29.09.2016 to promote inland waterways transport.

ICSL has been designated as the implementing agency for establishing scheduled cargo services on National Waterways-1 and National Waterways-2, i.e., Haldia/Kolkata to Varanasi (NW-1) and Kolkata to Dhubri/Pandu (NW-2), under the Jal Vahak Scheme, a promotional initiative announced by the Ministry of Ports, Shipping and Waterways (MoPSW) in December 2024 to enhance cargo movement through Inland Waterways Transport (IWT).

ICSL has been supporting the development of a multimodal logistics ecosystem & strengthening regional connectivity by facilitating greater use of waterways. These initiatives continue to support the development of inland waterways as an important pillar of India's logistics and transportation network.

As on 31.03.2026, ICSL is managing & operating 6 IWAI owned vessels comprising cargo vessels, RORO vessels & passenger catamaran.

B. SCI Bharat IFSC Limited

SCI Bharat IFSC Ltd. is a wholly-owned subsidiary of The Shipping Corporation of India Limited. As the Company is currently in its formative stage, its business activities during the financial year 2025 26 remained limited and exploring to increase business in various fields. However, with the growing opportunities available within the International Financial Services Centre (IFSC) ecosystem, the Company expects its business operations to expand significantly in the coming years. To support this growth, the Company has initiated a series of strategic and transformative measures aimed at establishing a sustainable and robust business model. In this regards, the Company is in the process of appointing a reputed business consultant with global expertise in financial services and business development. Simultaneously, concerted efforts are being undertaken at both the Company and Ministry levels to formulate comprehensive governance frameworks, strengthen organisational structures, streamline operational processes and establish systems and controls that are aligned with international best practices. These initiatives are intended to create a sustainable growth, enhancing stakeholder confidence and supporting the Company's long-term business expansion.

SPECIAL PURPOSE VEHICLE: Sethusamudram Corporation Ltd.

The Government of India established Sethusamudram Corporation Limited (SCL) to fund and manage the Sethusamudram Ship Channel Project, aiming to create a navigable channel from the Gulf of Mannar to the Bay of Bengal through Palk Bay. As mandated by the government, various PSUs, including SCI, were to contribute equity to this project. By FY 2016-17, SCI had invested 50 crore.

Work was suspended on September 17, 2007, due to an interim stay order from Hon'ble Supreme Court, regarding dredging operations in the Adam's Bridge area. All dredgers were subsequently withdrawn by July 27, 2009, as a final decision on an alternative alignment remained pending. A Supreme Court hearing scheduled for April 6, 2018, was indefinitely withheld.

At its meeting held on August 9, 2024, the Board of Directors of SCI approved the nomination of Rear Admiral Jaswinder Singh, (Retd.) Director (L&PS) as SCI's representative on the Board of Sethusamudram Corporation Ltd (SCL), subject to the approval of the Ministry of Ports, Shipping and Waterways (MoPSW). Following MoPSW's advice that the earlier established procedure be followed, as per which, SCI may directly appoint a Nominee Director to the SCL Board. Accordingly, at its meeting held on November 8, 2024, the SCI Board granted approval for the appointment of the Director (L&PS) as a Nominee Director on the SCL Board to represent SCI. The Board of Sethusamudram Corporation Ltd. thereafter appointed Director (L&PS) as an Additional Director of SCL on February 4, 2025.

Subsequently, in the 20th AGM on September 24, 2025, Director (L&PS) has been appointed as Nominee Director of SCL.

(i) India LNG Transport Co. (No.1), (No.2) and (No.3) Ltd

SCI has entered into three JVCs, registered in Malta, with three Japanese Companies viz. Mitsui O.S.K.Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK) and Kawasaki Kisen Kaisha Ltd (K Line) along with Qatar Shipping Company (Q Ship) in case of ILT No. 1 & 2 and Qatar Gas.

Transport Company (QGTC) in case of ILT No. 3, each owning and operating an LNG tanker deployed in the import of a total of 7.5 million metric ton per annum of LNG for the Dahej Terminal of M/s Petronet LNG Ltd (PLL). SCI is the first and only Indian company to enter into the high-technology oriented & sunrise sector of LNG. SCI is the manager for these three companies, managing the techno-commercial operations of 3 LNG tankers.

(ii) India LNG Transport Co. No.4 Pvt Ltd

SCI has entered into 4th JV registered in Singapore, with the same three Japanese companies viz. Mitsui O.S.K.Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK) and Kawasaki Kisen Kaisha Ltd (K Line) and Petronet LNG Ltd to own and operate one 173,000 CBM LNG Tanker for transporting LNG primarily from Gorgon, Australia to India and Far East region for charterers Exxon Mobil LNG Services B.V. SCI is the manager for this company and is managing the techno-commercial operations of the tanker.

Fleet position during the year:

During the year under report, there has been an addition of two vessels (Sahyadri and Shivalik) and deletion of one vessel (Maharshi Parashuram) to SCI's fleet. The overall fleet position of SCI stood at 58 vessels of 5.261 million DWT at the end of the year.

Fleet profile during the year:

Your company inducted two secondhand Very Large Gas Carriers viz. Sahyadri and Shivalik in its fleet during FY 2025-26. Sahyadri was delivered on 14th August 2025 and Shivalik on 10th September 2025.

On 18th March 2026, your company executed a shipbuilding contract with Mazagon Dock Shipbuilders Ltd (MDL) for construction and delivery of 1 no. new-building Methanol Dual Fuel Platform Supply Vessel.

Particulars of Loans Guarantees and Investments under section 186.

Details of Loans, Guarantees and Investments are given in the notes to financial statements. Further, SCI is an Infrastructure Company under Schedule VI referred to in Section 186 of the Companies Act, 2013, hence the provisions of Section 186 are not applicable to it.

Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return in Form MGT 7 is available on the Company's website and can be accessed at https://www.shipindia.com/investors/agm_new/13 Particulars of contracts or arrangements with related parties referred to in section 188(1)

Particulars of contracts/arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed form AOC-2 is appended to the Director's Report as Annexure IV. The details are also available in Note 29 under ‘Notes to Financial statements'. For the purpose of above disclosures directors' interest shall have the same meaning as given in Section 184 of Companies Act, 2013.

Managerial Remuneration

Your Company, being a Govt. Company, is exempted to furnish information under Section 197 of Companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05.06.2015.

Employees Stock Option Scheme

The company does not have any Employee Stock Option Scheme.

Company's Policy on Directors appointment and remuneration

Being a Government Company within the meaning of Section 2(45) of the Companies Act, 2013, the prior approval of the President of India is required for appointment to the posts of Board-level Directors. Accordingly, the authority for appointment of Directors to the Board of the Company rests with the Government of India, and the terms and conditions governing the appointment of Directors are determined by the Government of India.

SCI, being a Government Company, the Whole-time Directors are appointed by the Government of India and draw remuneration as per Industrial Dearness Allowance (IDA) pay scale pre determined by the Government as per the terms and conditions of their appointment issued by the Government.

The Non-Executive Part-Time Ex-Officio Directors (Government Directors) do not draw any remuneration/sitting fees from the Company for their roles as Director but draw their remuneration under Central Dearness Allowance (CDA) scale from the Government as government official.

The Independent Directors are paid a sitting fee of Rs. 30,000/- for attending every meeting of the Board of Directors and Committee(s) thereof

Receipt of Remuneration by Managing Director from Subsidiary Companies.

Capt.B.K.Tyagi, CMD has not received any remuneration from the Subsidiary Companies.

Risk Management.

SCI considers Risk Management to be a core component of the Management of the Company and its ability to identify and address risks is central to achieving Corporate objectives. Accordingly, SCI has developed a detailed Risk Management Policy in line with the requirements of SEBI (LODR) Regulations, 2015, which includes framework for identification of risks, measures for risk mitigation and Business Continuity Plan. The Policy has been approved by the Risk Management Committee and the Board. The company has identified entity level Risks which includes: I) Strategic Risk ii) Operational Risk iii) Financial Risk iv) Compliance Risk Some of the risks identified by SCI include market volatility, increasing bunkering cost, cyber security risk, geopolitical risks, decarbonisation challenges, Piracy, Foreign exchange fluctuation, regulatory compliances among others. All efforts are made for mitigating and controlling the risks through well-defined mitigation measures and coordination with all stakeholders.

SCI has formulated a three line of Risk Reporting viz. Corporate Risk Committee, Risk Management Committee and Audit Committee.

A corporate level Risk Register is maintained and reviewed quarterly by the Corporate Risk Committee. At each meeting of the RMC, the Corporate Risk Committee reports all the risks including the High risks and their mitigation plans. Further, in the area of 'Risk Management', the Audit Committee and the Board continued to function in accordance with the applicable laws, rules and regulations.

The Risk Management Policy is uploaded on the website of the Company at the following link: https://www.shipindia.com/upload/policies/Risk_Management_Policy1.pdf

A Special Crisis Management Team (CMT) has been formed to monitor and assist vessels trading in War Zone Areas of West Asia Gulf Region and Strait of Hormuz. The Team is monitoring vessels closely on 24x7 basis. Considering heightened Safety/Security concerns and volatile situations prevailing across the West Asia Gulf Region / Persian Gulf / HRA areas, SCI HO Crisis Management Control Room / Contingency Room is being maintained & monitored daily on a 24x7 basis to provide immediate support and necessary help to our fleet vessels trading in above region. Additional war risk premium is taken on case to case basis for vessels transiting the above high risk areas.

Conservation of Energy, Technology Absorption

The information pertaining to conservation of energy, technology absorption is forming a part of the Management Discussion and AnalysisReport.

Foreign exchange earnings and outgo

*includes deemed foreign exchange earnings and outgo.

Public Deposit:

During the financial year 2025-26, SCI has not accepted any deposit within the meaning of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Proposed Strategic Disinvestment of SCI:

The proposed strategic disinvestment of SCI is being handled by Department of Investment and Public Asset Management (DIPAM) with the engagement of necessary Advisors. In this regard, Preliminary Information Memorandum (PIM) for inviting expression of interest was released on 22.12.2020. The Virtual Data Room is open and is being managed by the Transaction Advisor for the process of due diligence by the Qualified Interested Parties.

Updates On Transfer Of Non-Core Assets From The Shipping Corporation Of India Limited Pursuant to Demerger scheme :

In accordance with the MCA Order dated 22.02.2023, during the Financial Year 2023 2024, titles of all Fixed Deposits eligible to be transferred to Shipping Corporation of India Land and Assets Limited (SCILAL) as per the Demerger Scheme, have been transferred in to their name.

Consequent to the approved Demerger Scheme, all non-core assets (i.e., real estate properties) of The Shipping Corporation of India Ltd. (SCI), as listed in the scheme, have been transferred de facto to Shipping Corporation of India Land and Assets Limited (SCILAL). To effectuate the de jure transfer, the execution and registration of conveyance deeds with the respective Land & Revenue Departments of State Governments is required. The Company is actively pursuing the necessary legal and administrative steps in this regard. Subsequent to the issuance of a Stamp Duty Exemption Order by the Government of West Bengal, registration of all freehold properties located in Kolkata has been completed on 22.03.2024. Transfer Deeds for 15 flats and Shipping House, Kolkata have been registered and the original registered documents have been received at the SCI Kolkata office. Mutation (name change) entries with the Kolkata Municipal Corporation are pending and will be completed in due course.

To facilitate transfer of properties in Maharashtra from SCI to SCILAL, the Government of Maharashtra has issued the Stamp Duty Exemption Order. Adjudication process for residential freehold properties aimed at enabling the execution of Transfer Deeds at the respective Sub-Registrar offices is currently in process. The Certified copies of the Demerger Order and Scheme of Demerger have been submitted to the Office of the Collector of Stamps through the prescribed online application process. Additionally, follow-ups are being actively pursued with the concerned authorities for issuance of No Objection Certificates (NOCs) for Lease hold and Grant properties from Maharashtra State Govt., by SCI to facilitate the transfer of Shipping House (Lease hold property) and Maritime Training Institute (Land given on Grant) to the Resultant Company i.e., SCILAL.

Additionally, The Company is taking necessary and appropriate actions for the legal transfer of Irano Hind Shipping Company, P.J.S (IHSC) from SCI to SCILAL.

MANAGEMENT DISCUSSION AND ANALYSIS

The following remaining information w.r.t. to addition of new sub clause (i) under clause 1 in Part B (‘Management Discussion and Analysis) of schedule V of SEBI (LODR) Regulations, 2015.

The Company has identified the following ratios as key financial ratios :

* Ratios of comparative period i.e, 2024-25 are based on previous year figures which have been regrouped and rearranged wherever necessary to conform to current year presentation of the financial statements as per Schedule III (Division II) to the Companies Act 2013.

Ratio Details of Significant changes and explanation thereto:

1) Return on Net Worth- Return on Net worth has increased to 15.82 for F.Y. 2025-26 as compared to Return on Net worth of 10.61 for F.Y. 2024-25 due to increase in profit.

2) Net Profit Margin- Increase in profit from Rs. 81,410 lakh in 2024-25 to Rs. 1,32,625 lakh in 2025-26 has resulted in increase in Net Profit Margin

3) Operating Profit Margin- Increase in operating profit from Rs. 1,00,874 lakh in 2024-25 to Rs. 1,56,924 lakh in 2025-26 has resulted in increase in Operating Profit Margin.

4) Interest Coverage Ratio- EBIT has increased from Rs. 1,00,874 lakh in 2024-25 to Rs. 1,56,924 lakh in 2025-26 without increase in finance cost has resulted in increase in Interest Coverage Ratio.

5) Inventory Turnover Ratio- Change in the pattern of employability of vessels, i.e., from time charter to voyage charter (or vice versa), has resulted in a change in inventory levels and consequently impacted the inventory turnover ratio. ** Return on Net Worth is calculated on Net Worth as per Section 2(57) of Companies Act 2013 - As on 31.03.2026 - Standalone Net Worth is Rs. 8,38,444 lakh and Consolidated Net worth works out to Rs. 8,97,402 lakh.

As on 31.03.2025 - Standalone Net Worth is Rs. 7,67,022 lakh and Consolidated Net worth works out to Rs. 8,23,313 lakh.

Accounting treatment:

In preparation of financial statements, the Company has followed the Indian Accounting Standards (IND AS) laid down by the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 2013

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The overall scenario under which the Shipping industry operated and which impacted the various segments is discussed below: i) WORLD SCENARIO

The global economy demonstrated greater resilience than anticipated in 2025, with world GDP growth reaching 3.4%. Looking ahead, the IMF projects global growth to moderate to 3.1% in 2026 before improving slightly to 3.2% in 2027. The outlook reflects the adverse effects of heightened geopolitical tensions, particularly the conflict in the Middle East, alongside higher commodity prices and tighter financial conditions. Emerging market and developing economies are expected to face a more pronounced slowdown, especially commodity-importing nations with existing economic vulnerabilities.

Global Trade

According to the IMF, global trade is expected to remain under pressure amid heightened geopolitical tensions, elevated trade barriers, and increased policy uncertainty. While global economic activity demonstrated resilience in 2025, the outbreak of conflict in the Middle East has added a new source of disruption to international trade flows and supply chains.

World trade volume growth is expected to decline from 5.1 percent in 2025 to 2.8 percent in 2026 and increase to 3.8 percent in 2027 The IMF notes that rising commodity prices, tighter financial conditions, and growing geopolitical fragmentation are likely to weigh on both merchandise and services trade in the near term. Although global trade in services continues to expand and has become an increasingly important driver of international commerce, downside risks to the trade outlook remain significant. A prolonged conflict, renewed trade restrictions, or further fragmentation of global trade networks could adversely affect trade volumes and economic growth worldwide.

Seaborne Trade

In 2025, global seaborne trade reached an estimated 12.7 billion tonnes, marking a modest 0.5% year-on-year increase over 2024, as geopolitical disruptions, trade tensions, and subdued economic activity weighed on maritime trade growth. ii] INDIAN SCENARIO

India remains one of the world's fastest-growing major economies, supported by strong domestic demand, continued infrastructure investment, manufacturing expansion, and a resilient services sector. According to the IMF's April 2026 World Economic Outlook, India's GDP is projected to grow by approximately 6.5% in FY2026-27, maintaining its position as the fastest-growing major economy despite a challenging global trade environment and heightened geopolitical uncertainties.

This sustained economic expansion is expected to continue supporting India's seaborne dry bulk trade. Infrastructure development, urbanization, and industrial growth are likely to sustain demand for key dry bulk commodities. Thermal coal imports are expected to remain relatively firm and thus supporting employment of Panamax and Supramax vessels. Meanwhile, ongoing investments in transport infrastructure, logistics corridors, housing, renewable energy projects, and manufacturing facilities under initiatives such as PM Gati Shakti and Make in India are expected to support imports of steelmaking raw materials, benefiting larger bulk carrier segments including Capesize vessels.

Agriculture-related imports, particularly fertilizers such as urea, DAP, and potash, are also expected to remain stable, providing continued support to Handysize and Supramax trades. Overall, India's robust economic fundamentals, expanding industrial base, and infrastructure-led growth model are expected to remain positive drivers for regional dry bulk demand in 2026, supporting stable import volumes across a broad range of commodities even as global trade growth faces headwinds.

On the tanker front, India's economic momentum is expected to provide continued support to both crude and product tanker demand. As one of the world's largest crude oil importers, India's growing energy requirements are likely to sustain high refinery utilization rates and steady crude import volumes. Continued expansion of refining and petrochemical capacity, coupled with rising transportation and industrial fuel consumption, is expected to underpin demand for inbound crude shipments.

On the clean tanker side, India is expected to further strengthen its position as a major exporter of refined petroleum products. Its sophisticated refining sector, competitive operating costs, and strategic geographic location continue to support exports of diesel, jet fuel, gasoline, naphtha, and other refined products to markets in Europe, Africa, the Middle East, and Asia. These trade flows are expected to provide ongoing support for MR and LR tanker demand.

Furthermore, evolving trade patterns arising from geopolitical developments, sanctions, and shifts in global refining balances are likely to continue generating additional tonne-mile demand for both crude and clean petroleum product transportation.

Overall, India's strong economic growth outlook, expanding energy demand, and growing role in global refining and product exports are expected to provide firm underlying support to both crude and product tanker markets throughout 2026.

iii] STRENGTHS

SCI remains India's largest and most diversified shipping company, backed by over six decades of operational experience across multiple shipping segments. The Company operates a balanced fleet comprising crude oil tankers, product tankers, LPG carriers, bulk carriers, container vessels, offshore support vessels, and LNG carriers through its joint ventures. This diversified fleet profile helps mitigate cyclicality in individual shipping sectors while enabling SCI to capitalize on opportunities across different maritime markets.

The acquisition of two modern gas carriers further strengthens SCI's presence in the gas transportation segment, enhances its fleet profile, and positions the Company to capitalize on the growing demand for LPG and gas transportation driven by India's expanding energy requirements.

The Company's fleet is strategically deployed across India's EXIM trade, coastal trade, and international cross-trade routes, providing flexibility in vessel employment and revenue generation. SCI continues to enjoy a unique position in the Indian maritime sector as the only Indian shipping company operating both coastal and international container liner services. Additionally, through its joint venture companies, SCI maintains a presence in the LNG transportation sector, a strategically important segment supporting India's growing energy requirements.

1) Crude Oil & Product Tankers

The tanker market during financial year 2025-26 witnessed a strong recovery in earnings and tonnage utilization, driven primarily by geopolitical disruptions, changing crude oil trade patterns, tightening effective vessel supply and increasing tonne-mile demand. The market remained highly volatile but overall favorable for tankers particularly in the crude oil segment. The crude tanker market experienced one of its strongest phases since the post-covid recovery, particularly from third quarter of financial year 2025-26 onwards. Although earnings moderated in the first half of 2025, market conditions strengthened in later part of 2025 as OPEC+ accelerated its production unwinding plans and China increased crude oil stockpiling. Fleet growth remained constrained as an expanding sanctioned fleet and a limited number of new deliveries restricted effective supply, providing sustained support to freight rates. At the same time, product tanker owners experienced a mixed market in 2025, as increase in newbuilding deliveries brought earnings under pressure. Although freight rates remained subdued in the first half of 2025, conditions improved in the second half of 2025, supported by the strong crude tanker market. However, crude tanker market was quite buoyant and a number of LR2 product tankers switched to dirty trades owing to elevated Aframax earnings. This effectively tightened supply in the clean segment. Meanwhile, Europe's plans to ban refined products derived from Russian crude benefited MR tankers as the transatlantic diesel flows from the US to Europe increased ahead of the winter season.

Global Oil demand in the year 2025 was marginally higher compared to the demand during year 2024. The market was primarily driven by various factors including India reducing dependence on Russian crude, increased long-haul imports from the US Gulf as well as the geo-political disruptions in the Middle East Gulf, Venezuela and the Red Sea region, which resulted in growing Asian stockpiling activity. The easing of US sanctions on Venezuela boosted Venezuelan exports, increasing employment of mainstream vessels. These factors boosted trading activity and underpinned the demand for tankers. VLCC freight rates surged to exceptionally high levels in September 2025, driven by heightened demand against the backdrop of minimal fleet additions.

The beginning of the armed conflict in the Middle East on February 28, 2026 brought about abrupt stoppage of marine traffic through the Strait of Hormuz (SOH) and the strait continues to remain effectively closed. Although, the immediate shocks were felt in energy shipping, multiple sectors have been exposed, with knock-on effects including cargo disruptions, rerouting and higher war-risk premiums. With the beginning of the war, the tanker freight rates surged and most global freight indices rose substantially higher than levels before the war. The freight rates for cargo loading in the Middle East Gulf (MEG) continue to remain very high even though reportedly hardly any ships are loadings at the MEG ports. Freight rates in most other key trade lanes are, however, back to levels similar to those seen before the war began. The opening of the SOH and resumption of the oil flow are the key determinants for further course for the tanker market. In the recent years, the crude tanker sector has been impacted by geopolitical and trade related developments resulting in significant volatility in freight markets. With the disruption to crude oil exports from Middle East Gulf owing to the blockade of the Strait of Hormuz, the crude tanker market has entered yet another turbulent phase as around 10 mbpd of crude oil has been effectively trapped within the Middle East Gulf. Prior to the West Asia conflict, global oil demand was projected to grow by around 0.8 mbpd in 2026 compared with 2025, supported by lower crude prices resulting from the unwinding of OPEC+ production cuts and a recovery in petrochemical feedstock demand. However, the ongoing disruption to Middle Eastern supply and the resultant high oil prices have significantly altered the outlook. Global oil demand is now expected to contract in 2026 amid tight supply and elevated prices; however, With significant inventory drawdowns due to disrupted crude flows and precautionary stock releases, the reopening of SOH, refiners and governments will replenish the depleted inventories, supporting crude trade and tanker demand during second half 2026 and into 2027.

On the tonnage supply side, first quarter of 2026 saw deliveries of 27 crude tankers (5.5 mdwt), which is significant compared to 33 tanker deliveries (6.0 mdwt) during the year 2025 indicating acceleration in fleet additions. The current tanker new building order book represents about 23% of the fleet. Based on the current orderbook position, a further 66 tankers (13.9 mdwt) are scheduled for delivery in the remainder of 2026 with Suezmax and VLCC vessels dominating the new additions. For Product tankers, as per reports, around 70 non-IMO coated tanker were ordered during the year 2025; whereas deliveries were largely driven by LR II tankers. It is also important to note that more than 200 tankers are currently stuck in the Middle East Gulf and there rejoining the active fleet is also important for the supply situation.

The average spot rate yield (TCE) of TD3C route (AG/China for VLCC) was US$ 80,000 per day in 2025. In case of Aframax segment, the average spot rate yield (TCE) of TD8 route (Kuwait Singapore) for the year 2025 was US$ 33,000. For product tankers, LR2 and LR1 Spot rates on AG/East routes, (TC1 and TC5 respectively) were US$ 25,800 and US$ 21,300 per day respectively in 2025. The average spot rate yield (TCE) of TC12, WCI Japan route for the year 2025 was US$ 13,600 and for the MEG- East Africa TC17 route, it was around US$ 21,300.

Opportunities

Looking ahead beyond the current MEG conflict scenario, overall tonnage demand is expected to improve, supported by a rebound in global refinery runs and a likely increase in inventory restocking as rebuilding of oil stocks shall support post-war tanker demand growth. Any sustained oversupply in the global oil market stemming from the unwinding of OPEC+ production cuts could provide additional support to crude trade volumes, tonnage demand, and tanker earnings. Any reconfiguration of trade patterns will be an opportunity for the VLCC tonnage and will boost tonne-mile demand. Further Asia-bound trade is likely to surge due to such restocking activity. It will provide firm support to freight rates. The partial relaxation of sanctions of

Venezuelan crude is expected to move on compliant mainstream tonnage. The Aframax demand is likely to be strengthened, as these vessels dominate the short-haul routes from Venezuela to the US. While global refined product trade is projected to rebound on the back of stronger refinery activity and increased inventory replenishment, growth in vessel supply is likely to outpace demand growth. After contracting in 2026 due to the disruption to the refined product flows caused by SOH blockade, the global clean petroleum product (CPP) trade is projected to expand once the blockade is lifted. Higher refinery runs, improved crude availability and a gradual normalisation of trade flows are likely to support this recovery.

Risk

Since the beginning of the West Asia conflict, the Strait of Hormuz has been effectively closed and as of now it remains unknown when the strait will reopen. The reduction in global crude oil supply has led to increase in the price of crude, which has led many countries to take emergency steps to deal with the energy crisis. The higher oil prices have already impacted global inflation levels. In order to keep inflation in check, central banks may be forced to raise interest rates, which may slow economic activity.

After the SOH blockade, buyers secured alternative barrels from Atlantic Basin suppliers such as West Africa, Latin America, and the US. This shift significantly boosted tonnage demand in Atlantic loading regions. Although freight rates have since eased from their immediate post-conflict levels as vessel repositioning improved tonnage availability at loading hubs, they remain well above 2025 averages. Nevertheless, if the blockade continues, subdued crude trade volumes will increasingly weigh on vessel employment, eventually exerting downward pressure on freight rates. The future trajectory of tanker earnings will therefore depend heavily on the duration of the disruption. The longer the blockade persists, the greater the damage to tonnage demand and vessel earnings.

The global oil market will remain extremely tight due to the disruption to MEG exports. Even likely expansion in non-OPEC supply particularly with rising crude production from Latin America and parts of the Atlantic Basin will not be sufficient to fully offset the loss of MEG supply. This might lead to under supply in the market making it highly vulnerable to further price spikes in the near term. It may be noted that the International Energy Agency (IEA), in its latest forecast, has lowered its estimates of global oil supply as well as that for refinery throughput and demand for 2026 compared to the pre-war forecasts. Any prolonged extension of the blockade is likely to dent tonnage demand and place significant downward pressure on freight rates. In case of product tankers, restrictions on clean product exports continue to limit export opportunities in Asia. Although intra-Asia trade initially benefited from reduced Middle Eastern supply, sustained declines in refinery runs amid tight crude availability are likely to erode these gains and weaken regional tanker demand. A similar trend is seen to be emerging in Europe. Any further slowdown in refinery activity is likely to reduce intra-European diesel movements and transatlantic gasoline trade, which will affect product tanker demand. A potential resolution of the Russia-Ukraine conflict could lead to resumption of short-haul Russian diesel. However, the weakness in refined products trade resulting from the blockade of the Strait of Hormuz is now being reflected in the freight rates. The future direction of the product tanker market is largely dependent on the duration of the disruption. If the blockade persists for an extended period, it will hamper global refined product trade, undermining tonne-mile demand and putting downward pressure on freight rates.

2) Dry Bulk

The overall dry bulk segment earnings for the year FY 25-26 was healthier as compared to FY 24-25. The average Baltic Dry Index (BDI) firmed up slightly in FY 25-26 when compared to FY 24-25 and the TCY earning also improved. Although the market for Dry Bulk Carriers was subdued in 1st half of 2025-26, the markets improved substantially in the second half. The key differentiator was Jan March 2026 period where in, the BDI

for Jan March 2026 period was 74 % higher than the BDI for the same period in 2025.

The dry bulk market has entered 2026 on a firm footing, with improving utilisation and strong earnings reflecting a tighter balance between shipping demand and effective fleet supply. The charter market has strengthened on the back of resilient cargo flows, an increase in average haul length and constraints on effective fleet capacity at the start of the year. The ongoing geopolitical tensions, particularly in the Middle East and continued disruption of key trade corridors, have extended voyage distances, increasing shipping demand.

With respect to demand side, bulk trade volume is forecast to grow by 3.3% in 2026. However the dry bulk demand in 2026 is expected to grow with tonne-mile expansion playing a more significant role than volume growth. Coal markets exemplify this dynamic, where short-term demand has been supported by energy security concerns despite a longer-term structural decline. The recent pivot back to coal in parts of Asia highlights the sensitivity of energy ecosystems to supply shocks and the continued importance of coal as a fallback fuel. However, this support is likely to be temporary, with demand expected to stabilise and gradually decline beyond the near term as renewal energy gains further momentum.

On the supply side, the dry bulk fleet is entering a phase of strong delivery however, effective supply growth is likely to remain lower, at around 1.1 % in 2026 and around 2 3% in the coming years, due to operational inefficiencies, including slower sailing speeds, increased maintenance requirements and regulatory compliance measures. These factors reduce available capacity and partially offset the impact of new deliveries. Your company's dry bulk fleet comprises of eight modern Supramax vessels of around 57,000 dwt each & seven modern Panamax / Kamsarmax dry bulk carriers of around 80-82,000 dwt. The dry bulk carrier fleet is relatively young with an average age of about 14 years. The company's dry bulk carriers have been engaged over a spread of various trade& deployment pattern like spot voyages and time charter. In addition to import/export/cross trade voyages, your dry bulk carriers were also employed on Indian coast, performing coastal time charters & voyage charters, whose earnings compare well with markets. The geographical spread of the deployment was also diversified with coastal, import, export and cross country trade. The diverse trade & deployment patterns ensured that the market volatility and geo political uncertainties were well covered.

Opportunities

The ongoing conflicts in the Middle East and Eastern Europe, along with broader trade tensions, are reshaping global export centers and trade routes. These disruptions are increasing uncertainty but also generating opportunities for the dry bulk market by extending trade distances and creating inefficiencies that support tonne-mile demand.

Iron ore trade remains the cornerstone of dry bulk demand, although its growth is increasingly influenced by inventory dynamics and developments in iron ore production centers. The emergence of new sources, particularly in West Africa and the expansion of long-haul trade routes are supporting tonne-mile demand, even as the underlying growth in steel production remains modest. Moreover, coking coal demand is being reshaped by structural shifts in the steel industry, with India emerging as the primary growth driver. Rapid expansion in blast furnace capacity and rising steel production are supporting strong import growth, offsetting weaker demand in China.

Grain markets remain subject to weather risks and geopolitical disruptions with strong trade growth expected in 2026, while minor bulks, including bauxite and other energy-transition commodities, are experiencing firm growth.

Risks & Concerns

China remains central to the dry bulk market due to its dominance in iron ore, coal, and steel-related trades. Weaker demand from key commodities, particularly coal and iron ore, driven by a slowdown in China, would weigh on cargo volumes.

The US/Israel Iran conflict and closure of Strait of Hormuz has adversely impacted movement of Fertilizer and also has led to loss of access to the Persian Gulf markets. Although the war has led to the markets temporarily firming up, any prolonged closure of the Strait of Hormuz may lead to changes in global trade flow and dependence of non renewal energy, which was dampen the demand in long term.

Also, a sudden de-escalation and opening of Strait of Hormuz may also lead to oversupply of tonnage in certain areas, which may lead to a fall in the market. Lastly, the Middle East war has had impact on bunker prices and thus volatility of bunker prices remains a point of concern.

3) LNG and LPG scenario: World LNG and LPG Scenario

The global Liquefied Natural Gas (LNG) market is entering a period of significant expansion driven by rising energy demand, increasing export capacity, and long-term energy security strategies across major importing nations. Global LNG trade reached approximately 435 million tonnes in 2025 as compared to 412 million tonnes in 2024 and is expected to continue growing strongly through 2030. New liquefaction projects in the United States, Qatar, and Canada are expected to add nearly 290 million tonnes per annum (mtpa) of export capacity by the end of the decade.

The United States is expected to remain the world's largest LNG exporter, supported by the ramp-up of major projects such as Plaquemines' LNG and Corpus Christi Stage 3. Qatar's North Field expansion and LNG Canada's continued development will further contribute to supply growth. Demand growth is expected to be led by Europe and Asia. European imports remain supported by energy security requirements, while Asian demand is forecast to strengthen as economic growth and cleaner energy policies drive gas consumption. LNG shipping demand is projected to increase alongside trade growth. The market is expected to shift from a seller's market to a buyer's market, giving buyers greater negotiating power and contract flexibility. LNG trade is projected to rise 6.4% YoY to approximately 458 million tonnes in 2026. Looking ahead, continued investment in LNG infrastructure, long-term supply agreements, and rising global energy demand support a positive long-term outlook for the sector. Geopolitical developments remain a key market risk. The disruption of shipping through the Strait of Hormuz during Q1 of 2026 demonstrated the vulnerability of global LNG supply chains and caused extreme volatility in LNG freight markets. Spot LNG carrier rates surged above $200,000 per day during the peak of the crisis before moderating. Overall, the global LNG industry is positioned for sustained growth through 2030. While short-term market volatility and fleet oversupply may create challenges, the long-term outlook remains positive, supported by expanding production capacity, growing international trade, and increasing demand for cleaner energy sources worldwide. Geopolitical and weather-related factors will remain key swing factors, along with China's demand recovery. US-led policy changes may also dictate the market shifts.

Global LPG trade is expected to grow at 3.6% CAGR (2025 2030), slower than the 4.3% CAGR seen in 2020 2024. Asia will remain the largest demand centre, led by India, Indonesia, and emerging Southeast Asian markets. Petrochemical demand, especially from China, will be the key driver and uncertainty for future LPG imports.

US China trade diversification is reshaping LPG flows, leading to longer shipping routes and higher ton-mile demand. LPG shipping in 2026 will be driven by geopolitical disruptions, particularly reduced Middle Eastern exports through the Strait of Hormuz. Middle Eastern LPG supply is expected to fall sharply, while increased US exports can only partially offset the shortage, keeping the market tight. Freight rates have risen due to limited vessel availability and longer trade routes, but high LPG prices are weakening downstream demand. Although near-term market conditions remain supportive, rapid fleet growth in 2026 27 could create vessel oversupply and pressure freight rates over the medium term.

India's LNG Scenario

India's LNG imports declined to just under 25 million tonnes, a 9% year-on-year decrease. Main reasons included subdued power-sector and industrial gas demand, high competition from coal, buyers delaying purchases in anticipation of increased global LNG supply in 2026 and elevated LNG prices, which encouraged consumers to switch from PNG (piped natural gas) to propane. India currently has 8 LNG terminals and combined regasification capacity of 52.7 mtpa. However only the terminal at Dahej LNG Terminal operated above 90% utilisation in 2025. Most other terminals are running below 30% utilisation. This is expected to improve with the completion of the breakwater at Chhara LNG Terminal, Expansion of Dahej LNG Terminal by 5 mtpa and proposed Gopalpur LNG Terminal project. Important projects also include MNJPL and URJA South Link The government plans to mandate LNG terminals to maintain additional storage equal to 10% of terminal capacity that can be accessed during supply disruptions or price shocks. This would effectively create India's strategic natural gas reserve.

India has around 25,000 km of operational gas pipelines and another 9,000 km under construction, yet pipeline utilisation is only about 40%.These pipelines are intended to support CGD networks, CNG stations, industrial consumers and residential gas users. India's Domestic Gas Production Remains Limited. Domestic production supplied approximately 50% of India's gas demand in FY 2023-24. But production growth is expected to be modest: Only about 8% higher by 2030 compared with 2023 levels. Reasons include maturing gas fields, production variability and allocation policy constraints. As a result India's LNG imports will likely need to double by 2030 if the country aims to increase natural gas's share in the energy mix to 15%. India signed nearly 10 mtpa of LNG supply agreements with Qatar, United Arab Emirates, and United States. Benefits would include reduced dependence on a single supplier and greater contractual flexibility. India's LNG imports were expected to rise from 24 million tonnes in 2025 to 26 million tonnes in 2026 due to growing industrial demand and expansion of natural gas use. However, conflict-related disruptions have weakened this outlook because India depends heavily on Middle Eastern suppliers, particularly Qatar and United Arab Emirates, which together account for about half of India's LNG imports. During the first quarter of 2026, LNG imports fell to 5.2 million tonnes, a 7% year-on-year decline. Despite disruptions, India mitigated some supply losses by sourcing LNG from the United States and Nigeria.

Your company jointly owns and operates 3 LNG carriers under long term charters with charterers Petronet LNG Limited, India for transportation of LNG predominantly from Qatar. The 4th LNG carrier is under long term charter to Exxon Mobil LNG Services B.V, Netherlands. In order to ensure its presence in the new areas of the LNG market, your company is exploring new opportunities in LNG space through exploring collaborative strategic partnerships. Your company has built up a pool of trained LNG officers and the experience of independent technical operation of LNG tankers has helped to provide ship management services.

India's LPG Scenario

Around 90% of India's LPG imports come from the Middle East. Imports fell sharply from about 1.9 million tonnes in January February to 0.9 million tonnes in March after the disruption. Total LPG imports declined 26% quarter-on-quarter (QoQ) and 12% year-on-year (YoY) in Q1 2026. India is particularly vulnerable because residential LPG demand is structurally strong and relatively inelastic, domestic production covers only a portion of demand and import dependence remains high despite efforts to diversify supply sources. The Indian government has taken remedial measures such as refineries and petrochemical companies were instructed to maximize LPG production, Propane, butane, propylene, and butane streams were redirected into LPG production, domestic LPG output reportedly increased by 25% and additional supply was allocated primarily to households. Priority access was extended to essential sectors such as hospitals and educational institutions. A committee consisting of executives from oil majors was established to manage allocations to commercial users such as restaurants and hotels. India sought alternative suppliers such as Argentina which increased LPG exports to India to 50,000 tonnes in Q1 2026, more than double 2025 levels. Existing supply agreements with Chevron, Phillips 66 and Total Energies provided 2.2 million tonnes of US LPG during 2026, helping offset some Middle East shortages.

The crisis appears to be accelerating efforts to improve supply security. A new agreement between Indian Oil Corporation and ADNOC aims to expand LPG trading cooperation and potentially establish long-term supply arrangements. Since the United Arab Emirates accounts for roughly 40% of India's LPG imports, strengthening this relationship could improve supply stability, although it does not fully eliminate dependence on the Gulf region. Before 2025, your company's sole VLGC carrier - VLGC Nanda Devi, was employed under time charter with Indian energy PSU during the financial year under review. The daily earnings were attractive as compared with markets. Looking at the potential in LPG markets worldwide and to meet national requirements, Your Company added two new VLGC's namely LPGC Sahyadri on 14.08.2025 and LPGC Shivalik on 10.09.2025. Both have been employed under long term time charter with Indian energy PSU at competitive hire rates. Informatively, in mid -march 2026, our two Indian-flagged liquefied petroleum gas (LPG) tankers operated by the Shipping Corporation of India namely Nanda Devi and Shivalik gained significant attention for successfully navigating the conflict-ridden Strait of Hormuz, ensuring critical energy supplies reached India amidst heightened regional tensions in the Gulf. This was a matter of national pride and showed commitment to the needs of the country.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The bottom line and top line of tanker segment exhibited improvement to the already strong performance of last year. The financial performance of the tanker segment has been largely influenced by earnings on all segments. Your company's five VLCCs were gainfully employed during the financial year under review; in a mix of time charters and spot voyage charters with Indian charterers both in public and private sector. The segment earnings were in line with the prevailing market and brought good margins over vessels' indirect operating costs. Your company's modern Suezmax tankers were deployed in a mix of Indian as well as foreign charterers mainly on voyage charter basis. Older Suezmax vessels were available for trading and were gainfully deployed on account of Indian oil refiners to carry import cargoes. Aframax tankers were deployed in a mix of COA and spot voyages for carriage of Indian import cargoes as well as cross trade cargoes. Through judicious deployment of some of the modern tankers in international cross trade and by triangulation of voyages, your Company maximized earnings of these tankers. Your company's five LR1 tankers trading in DPP were employed on Indian coast in a mix of COAs and spot voyages, catering to coastal crude movement for the Indian oil industry.

In case of product carriers, LR2 and LR1 tankers of your Company were deployed in the East of Suez market in the international cross trades and achieved a healthy level of revenue as compared to the prevailing market. Three MR product tankers were gainfully employed on the Indian coast supporting coastal movement of clean petroleum product of Indian oil industry.

With respect to Dry Bulk segment, the 1st half of FY 25-26 was subdued, however the markets improved in the 2nd half, especially towards end of the financial year. Although Dry Bulk market for Jan March period in seen to be generally a lean period, Jan March 2026 defied the seasonal cycle as charter hire levels remained higher than usual for this period with Strong fundamentals, which supporting charter rates across all bulk segments, especially in March. Your company's Dry Bulk Carriers were employed with regular back to back voyages with minimal waiting. Overall the segment revenue and PBIT of Dry Bulk carrier improved slightly in FY 25-26 vis-a-vis FY 24-25 and the markets have seen a good start to the 1st quarter of FY 26-27.

1) World Scenario:

A.1 During 2025 26, the global shipping industry operated amid slower growth, elevated trade policy uncertainty and continuing geopolitical tensions. WTO estimates indicated uneven merchandise trade performance, while OECD and multilateral agencies highlighted softer industrial activity and weaker investment sentiment. Trade flows remained resilient in parts of Asia, but volatility in major markets continued to influence freight demand and routing decisions across global supply chains.

A.2 Container shipping remained comparatively stronger, supported by e-commerce, supply chain diversification and front-loading of cargo ahead of tariff actions in some markets. However, large orderbooks and heavy vessel deliveries raised concerns of excess capacity and pressure on freight rates. Demand for LNG carriers, tankers and vehicle carriers stayed firm. Newbuilding activity increasingly focused on dual-fuel, methanol-ready and LNG vessels, reflecting the industry's transition towards cleaner technologies and future compliance needs.

A.3 Geopolitical risks continued to reshape maritime transport. Red Sea disruptions and security concerns kept many vessels on longer Cape of Good Hope routes, increasing transit times, insurance costs and ton mile demand. Ongoing Russia Ukraine conflict, tariff measures and wider geo-economic fragmentation further altered trade patterns. A.4 The recent escalation of tensions involving the United States and Iran has further heightened uncertainty in global shipping markets, particularly around the Strait of Hormuz, a critical maritime chokepoint for global energy trade. The resulting increase in security risks, war-risk insurance premiums, vessel rerouting, and concerns over supply chain disruptions has added to operational costs and volatility across shipping and logistics networks. A.5 At the same time, decarbonisation remained a strategic priority under IMO measures, driving investments in alternative fuels, fleet efficiency, digitalisation and port resilience, though infrastructure and cost challenges persisted across regions.

B) Indian Scenario:

B.1 In fiscal year 2025 26, India's economy remained one of the fastest-growing major economies, supported by resilient domestic demand, public capital expenditure and steady services activity. Official assessments indicated real GDP growth in the range of 6.5% 7.4%, reflecting continued strength in construction, manufacturing and financial services despite global uncertainty and external trade disruptions. Rural demand improved further, inflation remained broadly manageable, and macroeconomic fundamentals stayed stable with strong foreign exchange reserves and a moderated current account position. Exports of services continued to perform well, while merchandise trade faced mixed conditions amid softer global demand and tariff-related uncertainties. B.2 A key highlight for India's maritime sector in FY 2025 26 was the record performance of Major Ports, which collectively handled 915.17 million tonnes of cargo, surpassing the annual target of 904 MT and registering 7.06% growth over the previous year. The increase reflected higher handling of containers, coal, crude oil, fertilizers and POL cargo, supported by capacity augmentation, mechanisation, digitalisation and improved multimodal connectivity. Strong performances by Deendayal Port Authority, Paradip Port Authority and Jawaharlal Nehru Port Authority underscored the sector's growing efficiency and scale.

2) Business Sector & Outlook

2.1 Global economic growth in 2026 is expected to remain moderate. The IMF projects world output growth at 3.1% in 2026, supported mainly by emerging market and developing economies, while many advanced economies are expected to see comparatively slower expansion. Risks remain from geopolitical tensions, trade fragmentation, elevated debt levels and policy uncertainty. Global trade is expected to improve gradually, while services exports such as IT, tourism, logistics and digital trade are likely to remain relatively resilient. 2.2 The global container shipping market in 2026 is expected to witness modest demand growth of around 2% 3% reflecting a more normalized trade environment after recent volatility. However, substantial fleet deliveries from the existing orderbook are likely to keep vessel supply growth above demand, sustaining concerns over overcapacity and pressure on freight rates. Any continuation of Red Sea diversions or regional disruptions may provide temporary support through longer voyage distances and higher ton mile demand, but market fundamentals remain sensitive to geopolitical developments.

3) SWOT Analysis L&PS Division A) Strength & Weaknesses:

A.1 Liner Division of SCI has vast experience in liner trade, which is most formidable force instilling confidence in cargo interests / owners who continue to lend their invaluable support to SCI. A.2 Global network of agent provides and facilitates for localized contacts in markets to offer bespoke, customised, end-to-end total logistics solutions. A.3 Operating partnerships have been forged with internationally recognized container carriers in select consortia, to enhance coverage and frequency on major trading routes. A.4 Break-bulk operations are providing a stable source of revenue.

A.5 Compared to Global Shipping Lines, the percentage share of SCI's Liner Fleet is small.

B) Opportunities & Threats:

B.1 Substantial growth of Indian EXIM container trade facilitated by enabling GOI policies viz. Maritime AmritKaal Vision 2047, Maritime Vision 2030, Sagarmala, Gati Shakti, National Logistics Policy, Foreign Trade Policy 2023 etc.

B.2 Substantial potential for enhancing presence on Indian coast in coastal shipping sector, feeder operations etc.

B.3 India Maldives service would serve as template for expansion into Indian Ocean Region (IOR) & near Coastal Regions.

B.4 Break-bulk sector affords inherent potential for carriage of ODC / Project / Heavy Lift cargoes of Government Organizations / Departments / PSUs etc.

B.5 Large-scale fleet induction by global carriers, particularly in the ULCV segment, may result in excess capacity across key trade routes, exerting sustained pressure on freight rates and challenging profitability in liner operations.

B.6 Geopolitical developments, protectionist trade measures, supply-chain reconfiguration, regional conflicts, and fluctuations in global economic growth may adversely impact containerized trade volumes and cargo demand across international markets.

B.7 Volatility in fuel costs, charter markets, equipment availability, port and terminal charges, together with increasing environmental compliance obligations and technology-driven capital expenditure requirements, may adversely affect operating costs, margins, and competitiveness in the container shipping sector.

4) Liner Shipping Services 2025-26 A) Segment-Wise Performance

A.1 Liner Vessels: Table below shows profile of SCI's liner fleet as on 31.03.2026 having a total container carrying capacity of 20,000 TEUs (nominal capacity).

A.2 SCI owned container vessels viz. MV SCI Chennai and MV SCI Mumbai are 17 years old. As on 31.03.2026, 4 vessels including 2 in-chartered container vessels having combined DWT of about 2,70,198 MT were operated by SCI.

In addition to above owned and in-chartered vessel, SCI also has loading rights on 17 vessels of its partners in various consortia arrangements with leading Shipping Lines.

SCI continues to be present in the following sectors. B) Container Services

B.1 India - Europe Shipping Services: SCI launched its UK Continent Cellular Container Service in 1994, initially as a sole operator with three 1,800 TEU vessels. The service evolved to a fixed-day weekly schedule with partners, then rationalized in 2009 by forming a consortium with MSC, with SCI contributing two 4,400 TEU vessels to an eight-vessel operation. By early 2016, the service was upgraded to nine vessels of 8,500 10,000 TEU, with SCI providing one 8,500 TEU chartered vessel until its redelivery in August 2021, after which SCI maintained its presence via slot purchase from MSC.

The ongoing Red Sea crisis, prompting rerouting via the Cape of Good Hope, increased voyage durations for MSC's Asia-Europe services from 63 to 84 days, necessitating an increase from nine to twelve vessels. MSC subsequently reorganized these services. In response, SCI in-chartered the 9,000 TEU "SCI Delhi" in August 2024 (for a period of 3 years) and inducted it into the India Europe Service at Nhava Sheva on October 18, 2024.

B.2 SCI's Coastal Shipping Services: Shipping Corporation of India's coastal shipping operations are centered around the SMILE service, which connects India's West Coast with key Southern ports. In addition, through a strategic partnership, SCI extends connectivity to the East Coast via the Chennai Colombo Gulf (CCG) Service. Together, the SMILE and CCG services establish a strong pan-India coastal shipping network, offering reliable fixed-day and fixed-window schedules with improved transit times. This integrated network enables seamless connectivity between the West Coast and important Eastern ports such as Visakhapatnam and Kattupalli, significantly strengthening domestic maritime logistics. SCI continues to collaborate with industry stakeholders to develop commercially viable, efficient and environmentally sustainable transportation solutions for the trading community. By promoting coastal shipping and encouraging modal shifts from road and rail to sea transport, SCI plays an important role in advancing India's coastal trade ecosystem and supporting the objectives of the Sagarmala Programme initiative. B.3 India Maldives Shipping Services: India-Maldives Cargo Shipping Service was jointly launched through a virtual ceremony on 21.09.2020, adding a new chapter in connectivity initiatives taken by both Countries in the Indian Ocean Region (IOR). Although majority shipments are containerized in nature, this service also caters to Breakbulk cargoes. Currently, MV MSM Douro, a 265 TEU (nominal capacity) vessel in-chartered by SCI, has been deployed in IMS Service operating between ports of Tuticorin & Male.

B.4 Feeder Operations: SCI enters feeder arrangements with “Common Carriers” between various destinations / port-pairs on Indian Sub-continent for providing seamless connectivity for EXIM & Coastal trade. B.5 Break-Bulk Services: SCI arranges carriage of break-bulk cargoes on space charter basis from various regions across globe including USA, Europe, Far-East etc. for imports of Government Departments / PSUs and other GOI Organisations, which includes ODC / Project / Heavy Lift / IMO Class-I Cargoes etc. and also containers.

B.6 Marketing

SCI's marketing team continues to make regular customer calls through its own Offices and also through Agents appointed at various ports in India and abroad in order to market its container and break-bulk services. Both physical & virtual meetings with Agents, Customers, Shippers, and Cargo Consolidators etc. are held periodically, and SCI representatives also participate in various trade meets at important locations in India.

C) Managed Vessels

L&PS Division also oversees the operation and management (O&M) of vessels belonging to other government organizations. The O&M brief for these managed vessels includes: C.1 O&M of A&NA (Andaman & Nicobar Administration) owned vessels: L&PS Division operates domestic passenger and cargo transportation services between mainland and A&N group of islands and inter islands by managing vessels owned by Andaman & Nicobar Administration (A&NA). Presently, a total of 25 vessels of A&N administration are being managed by SCI. These comprise of 17 nos. Foreshore passenger vessels, 6 nos. inter-island vessels, 01 no. Mainland vessel and 01 no. cargo vessel. The harbour Tug has been handed over this year for technical management and manning by Port Management Board (PMB), A&NA.

C.2 O&M of other organizations: During the year, SCI continued operation and management of Oceanographic and Coastal Research vessels on behalf of the Government agencies / departments, viz, three vessels owned by Geological Survey of India (GSI) under Ministry of Mines.

The following table shows the profile of Passenger vessels, cargo vessels and other vessels of various Government departments managed by L&PS Division.

C.3 India-Sri Lanka Ferry Service: International passenger ferry services between Nagapattinam, India and Kankesanthurai, Sri Lanka, began on October 14, 2023, initially using the HSC Cheriyapani as a temporary measure. To secure a long-term solution, SCI issued an Expression of Interest (EOI) in October 2023. After thorough evaluation of the proposals, M/s IndSri Ferry Services Pvt. Ltd. was chosen to operate the route. M/s IndSri Ferry Services then acquired the 150-capacity passenger vessel "Sivagangai." Following its relocation from Port Blair to Chennai, the vessel underwent essential repairs, surveys, and certifications.

The "Sivagangai" officially commenced service on August 16, 2024, connecting Nagapattinam and Kankesanthurai.

SCI has been instrumental in supporting operator, providing comprehensive assistance with certifications, planning, and ensuring regulatory compliance for the international service. Initially, the ferry operated three times a week. By October 2024, M/s Subham Freight Carriers India Pvt Ltd increased Ferry Services increased the frequency to four times a week (Tuesday, Thursday, Saturday, and Sunday) to meet passenger demand. Due to seasonal weather conditions, the service was temporarily suspended from October 26, 2025, and restarted in March 2026. The total number of passengers carried since start of ferry service in October 2023 till 31st March 2026 is 33604.

5) Outlook

A. India's economic outlook for FY 2026 27 remains relatively strong, though forecasts vary across institutions. The IMF has projected India's GDP growth at around 6.2%, reflecting external risks such as global trade uncertainty and slower world demand, while agencies such as the ADB and other forecasters remain relatively optimistic on the back of resilient domestic consumption, public investment and infrastructure spending. Continued growth in manufacturing, services and rural demand is expected to support overall economic momentum. India's maritime infrastructure is also set to strengthen further with the operational ramp-up of Vizhinjam International Seaport, progress on Vadhavan Port, and ongoing modernization across major ports under national port-led development initiatives.

B. However, the global maritime outlook continues to face uncertainty from geopolitical tensions, including conflict in Middle East, disruptions in the Red Sea region, which have led to longer sailing routes, higher insurance costs and freight volatility. Trade policy measures, tariff actions and supply-chain realignments are also reshaping cargo flows and vessel deployment patterns. In this environment, India's growing domestic demand, strategic location and expanding port infrastructure position the country favourably, while external risks will require continued monitoring.

C. The India Europe corridor is poised for strong momentum in 2026 27, fueled by expanding port infrastructure, evolving global supply chains, and India's transformative trade engagements with the EU and UK. While geopolitical tensions, including the Iran conflict and Red Sea disruptions, continue to reshape shipping routes, the industry is responding with more agile and resilient operations. Simultaneously, the push toward greener shipping is accelerating adoption of low-emission vessels, reinforcing the need for strategic adaptability and collaboration across the sector.

D. SCI is committed to expand India's coastal trade, planning to add more vessels in line with government initiatives like 'Make in India' and 'Sagarmala' that foresee significant market growth.

6) Risks & Concerns

Amid escalating geopolitical tensions, including conflicts in the Middle East, Red Sea disruptions, and evolving global trade dynamics, container freight rates are expected to remain highly volatile, with limited visibility on long-term stability. While periodic supply-chain disruptions may support short-term rate spikes, persistent uncertainty and capacity pressures could weigh on the Liner division's revenues and margins. In response, SCI is intensifying cost-efficiency measures while simultaneously expanding liner connectivity and strengthening its footprint across EXIM and coastal trade markets to enhance resilience and capture emerging opportunities.

7) Discussion on Financial Performance w.r.t. to Operational Performance

SCI's Liner Segment registered a net profit of Rs. 74.84 crores in FY 2025 26. The performance was influenced by prevailing market conditions characterized by softening freight rates, increased capacity deployment across major trade lanes, and continued volatility in global trade and shipping markets.

8) Information Technology

E-tendering platform is extensively being used for procurements, thus enabling transparency and efficiency in the procurement process. SCI has implemented a Vendor Invoice Management system which facilitates registration of invoices centrally by the vendors which then goes through a work flow mechanism for approvals till settlement. Vendor has a facility to track and understand the status of their invoices. Further to strengthen SCI IT system, SCI is in the process of upgrading complete IT infrastructure. As a first step complete workstations have been replaced with latest machines. Server and other equipment are in the process and expected to complete at the earliest.

1. Information relating to the year under review viz 01.04.2025 to 31.03.2026:

The T&OS Division of SCI operates fleet of 10 owned offshore vessels. In addition to the above, it has also been managing two (02) vessels of ONGC.

2 Offshore vessels: a. SCI owned Offshore vessels:

Your Company's owned offshore fleet comprises of 10 vessels i.e. 02 nos. 80T Anchor Handling, Towing & Supply Vessels (AHTSVs), 04 nos. 120T AHTSVs, 02 nos. Platform Supply Vessels (PSVs) and 02 nos.

Multi-Purpose Support Vessels (MPSV).

During the year under review, four (4) vessels (one PSV and three 120T BP AHTSVs) continued to be on long term charter with ONGC. Further, one vessel was under deployment with DRDO (MPSV); and two vessels were under deployment with Indian Navy (one MPSV and one PSV). Vessels deployed with DRDO and Indian Navy were providing assistance in national missions of strategic importance. Remaining three vessels (1no. 120T BP AHTSV and 2 nos. 80T BP AHTSVs) were being employed through Spot market enquiries with various charterers. b. O&M of ONGC owned vessels: i. Specialized vessels of ONGC:

During the year 2025-26, your company continued the Operation & Maintenance (O&M) of ONGC's one Geotechnical vessel (GTV Samudra Sarvekshak) and one Well Stimulation vessel (WSV Samudra Nidhi).

3.0 Other Projects: 3.1 DRDO Project:

Your Company continued to deploy its one Multi-Purpose Support vessel (MPSV) “SCI Saraswati” with the Defence Research & Development Organisation (DRDO) during the entire FY 2025-26. Another OSV SCI Mukta was with DRDO for initial 3 months of the Financial Year. These vessels are being utilized to meet support requirements towards DRDO's strategic missions of national importance.

3.2 Indian Navy Projects:

Similar to previous year, during the current year also, the Indian Navy has continued to avail services of your company's one MPSV “SCI Sabarmati” and one PSV “SCI Yamuna”. Your company is proud to have been associated and assisting the Indian Navy in their critical missions of national importance.

4.0 Risks and Concerns:

Availability of competent and suitable manpower for Indian-flag offshore vessels has emerged as a significant concern for the offshore shipping industry. The acute shortage of qualified onboard personnel is adversely affecting vessel deployment and commercial operations. Further, with increasing employment opportunities available globally, a large number of Indian seafarers are opting to join foreign and private shipping companies owing to comparatively higher remuneration and favourable taxation benefits. This trend has resulted in a shortage of experienced and competent manpower for Indian offshore vessels.

Further, limited availability of shipyards on the Indian coast for dry-docking and repair of offshore vessels continues to remain a major challenge. The number of suitable repair yards and dry-dock facilities is limited, resulting in difficulties in securing dry-dock slots within the required timelines for scheduled maintenance and repairs of vessels.

Increasing competition from new entrants in the Indian offshore market is another area of concern for your Company. Several small private operators are acquiring vintage second-hand vessels at comparatively lower capital cost, thereby intensifying market competition. In order to mitigate the impact of market fluctuations and competitive pressures, your Company continues to focus on securing long term employment opportunities for its vessels to ensure stability in operations and revenue streams.

5.0 Strengths and Weaknesses:

Your Company possesses a diversified offshore fleet comprising 02 nos. 80T AHTSVs, 04 nos. 120T AHTSVs, 02 nos. PSVs and 02 nos. MPSVs, enabling it to cater to the varied operational requirements of clients in the offshore market. Further, your Company is actively pursuing acquisition of additional tonnage in the required vessel segments to strengthen its market presence and operational capabilities.

In line with evolving industry requirements and to maintain technological competitiveness, your Company has upgraded all four 120T BP AHTS vessels from DP1 to DP2 configuration, in accordance with the operational requirements of E&P operators.

During the period under review, your Company successfully secured long-term charter employment for the majority of its vessels, thereby ensuring stable revenue visibility and sustained operational deployment over an extended period.

Your Company continues to maintain a strong business relationship with ONGC, the largest E&P company in India, with a majority of the offshore fleet deployed under long-term engagements with them. However, with a view to mitigating the risks associated with dependence on a single client, your Company has been actively engaging with various public and private sector operators for deployment of vessels in their offshore activities.

While SCI possesses a diversified offshore fleet, the fleet size remains comparatively limited vis-a-vis the growing requirements of E&P operators in India. This situation is being leveraged by several private and smaller operators through induction of comparatively low-cost assets, thereby intensifying market competition.

6.0 Opportunities and Threats:

The offshore vessel market in India presents significant opportunities driven by the country's expanding energy sector, increasing offshore exploration activities, regulatory initiatives and growing demand for maritime infrastructure. Some of the key opportunities are as under: i. Oil and Gas Exploration:

Increased Exploration Activities: The Government of India continues to encourage exploration and production activities in offshore oil and gas fields, thereby generating sustained demand for offshore assets such as Offshore Support Vessels (OSVs), Platform Supply Vessels (PSVs), Anchor Handling Tug Supply Vessels (AHTSVs) and Multi-Purpose Support Vessels (MPSVs).

Deepwater and Ultra-Deepwater Projects: With exploration activities gradually expanding into deeper waters, there is increasing demand for specialized offshore vessels capable of operating in technically challenging environments. ii. Renewable Energy:

Offshore Wind Farms: India is actively exploring the potential of offshore wind energy. The development of offshore wind farms is expected to generate opportunities for support vessels for installation, maintenance and operations. iii. Subsea Operations:

Pipeline and Cable Laying: Expansion of offshore oil and gas infrastructure and renewable energy projects is expected to increase demand for vessels engaged in subsea pipeline and cable laying operations

Inspection, Maintenance, and Repair (IMR): Regular IMR activities associated with existing offshore infrastructure continue to provide long-term opportunities for offshore support vessels. iv. Maritime Security:

Coastal Surveillance: Strengthening of coastal security and maritime monitoring activities is expected to generate demand for specialized offshore vessels equipped with advanced surveillance systems.

Search and Rescue Operations: India's vast maritime domain necessitates deployment of efficient and versatile offshore vessels for search and rescue operations.

Further, investment in technologically advanced vessels is expected to enhance operational efficiency, safety standards and environmental compliance in offshore operations.

By leveraging these opportunities, companies operating in the offshore vessel sector can play a vital role in supporting India's maritime infrastructure and energy security objectives. With sustained growth in demand for crude oil and energy resources, offshore E&P activities are expected to increase, thereby creating additional demand for offshore assets along the Indian coast and neighbouring regions. However, the Indian offshore market continues to face intense competition from domestic private operators as well as foreign vessel owners. Recent tenders floated by ONGC have witnessed aggressive participation from Indian private shipping companies and international operators, resulting in heightened competitive pressure in the market.

Further, the offshore industry is increasingly inclined towards deployment of modern and technologically advanced vessels with superior fuel efficiency and enhanced operational capabilities. Consequently, older vessels with comparatively higher fuel consumption, particularly DP1 class vessels, are facing increasing challenges in securing competitive employment opportunities.

7.0 Industry Structure and Developments: i) World scenario:

The Offshore Support Vessel (OSV) industry is closely linked to offshore exploration and production (E&P) activities, rig utilization levels and overall investments in offshore oil and gas fields. The sector is significantly influenced by global energy security strategies, Government policies, long-term crude oil price trends and capital expenditure plans of major oil and gas companies.

Global economic uncertainties, geopolitical tensions, recessionary pressures in developed economies, the Russia Ukraine conflict, tensions in the Middle East, evolving global trade dynamics and tariff-related developments continue to influence the outlook of the offshore sector and may impact future investment decisions in offshore exploration and production activities.

Despite such challenges, the global OSV market has witnessed gradual improvement in utilization levels and charter rates, particularly for modern and technologically advanced offshore assets. The market dynamics in several regions have shifted from a charterers' market towards a relatively balanced or owners' market, especially for high-specification vessels. Further, increasing investments in offshore renewable energy projects are also expected to support long-term demand for specialized offshore support vessels.

ii) Indian scenario:

The Indian OSV market is primarily driven by offshore activities of state-owned oil and gas companies, predominantly ONGC, with substantial operations across the Western Offshore region, including Mumbai High and Bassein fields, as well as the Eastern Offshore region in the Krishna-Godavari Basin.

Sustained demand for offshore vessels continues to arise from offshore exploration drilling, production support activities and extensive Inspection, Maintenance and Repair (IMR) operations associated with the large offshore infrastructure already installed in Indian waters.

Recent tenders floated by ONGC have witnessed intense competition from both Indian private operators and foreign vessel owners. Such competitive pressure has moderated the extent of increase in charter hire rates in the Indian market as compared to certain international offshore markets, although charter rates have shown improvement over the subdued levels witnessed in previous years.

During the period under review, offshore vessels of your Company continued to remain substantially deployed under long-term charter arrangements with ONGC and other Government organizations, thereby reducing the impact of short-term market volatility and ensuring relative stability in fleet utilization and revenue generation. iii) Outlook:

The outlook for the Indian offshore oil and gas industry continues to remain positive, supported by increasing energy demand, continued exploration activities, Government policy initiatives and technological advancements in offshore operations.

Reserves and Exploration: India possesses significant offshore hydrocarbon reserves, particularly in the western offshore region of the Arabian Sea and the eastern offshore region of the Bay of Bengal. Exploration activities continue in both shallow-water and deep-water blocks, including identification of new reserves in deep-water and ultra-deep-water areas.

Production Growth: Offshore oil and gas production in India continues to be supported by projects operated by state-owned companies such as ONGC and Oil India Limited, along with participation from private sector operators including Reliance Industries Limited. However, ageing offshore fields and natural production decline in mature assets continue to remain operational challenges.

Investment and Development: The Government of India continues to encourage domestic and foreign investments in the offshore energy sector through policy initiatives aimed at promoting exploration and production activities and facilitating technology adoption. Policies such as the Open Acreage Licensing Policy (OALP) and Hydrocarbon Exploration and Licensing Policy (HELP) are expected to support future offshore developments in both shallow-water and deep-water regions.

Technological Advancements: Continuous advancements in seismic imaging, drilling technologies, digital monitoring systems and enhanced oil recovery techniques are improving operational efficiency and enabling commercially viable offshore operations in deeper and technically challenging environments.

Global Market Dynamics: The Indian offshore sector remains influenced by global crude oil prices, international supply-demand dynamics and geopolitical developments. Volatility in crude oil prices may impact investment decisions and offshore project economics.” Renewable Energy Transition: The global transition towards renewable energy sources presents both opportunities and challenges for the offshore industry. While increasing focus is being placed on cleaner energy sources, oil and gas are expected to continue to play a significant role in the global energy mix in the medium term, particularly for transportation, industrial and petrochemical sectors.

Overall, the Indian offshore industry is expected to continue contributing significantly towards the country's energy security and economic development. Further, ONGC is expected to issue additional long-term tenders for offshore support services, while short-term requirements are also emerging from private operators and offshore contractors, thereby creating continued business opportunities for offshore vessel operators.

8.1 Technical Consultancy Services

During the year under report, the Company continued to provide technical consultancy services to A&N

Administration, Union Territory of Lakshadweep Administration and Sardar Sarovar Narmada Nigam Limited (SSNNL). During the year, your Company provided assistance to the UTL Administration for supervision of 2000 LPG Cylinder carriers under construction at M/s Goa Shipyard Ltd. The first vessel of the series was delivered to UTL Administration on 19.07.2024 and the second vessel is scheduled to be delivered in October 2026. Your Company is actively exploring opportunities to add new clients to its consultancy base.

8.2 Tonnage Acquisition Programme

During the year under report, your company had envisaged acquisition of new-building and secondhand vessels in various segments viz., Container, Crude Oil Tankers, Product Carrier, Offshore vessels, etc. Necessary steps were taken in this regard and accordingly tenders were floated for acquisition of various vessels. Your Company has been successful in acquisition of two second hand Very Large Gas Carriers of approximately 54,000 tonnes each. Induction of these LPG carriers into SCI's fleet has boosted SCI Gas Carrier tonnage giving your company a competitive edge in the high potential seaborne gas transportation segment. Further, your company has executed a Shipbuilding Contract with Mazagon Dock Shipbuilders Ltd (MDL) on 18th March 2026 for construction of one (1 no.) 3000 DWT Methanol Dual Fuel Platform Supply Vessel (PSV). The PSV will be the first vessel in SCI's fleet which is planned to operate on alternate fuel Green Methanol, a step towards the green shipping under the aegis of National Green Hydrogen Mission (NGHM). Your company is continuously scanning the S&P market for acquisition of vessels. The second hand acquisitions will augment tonnage and replace the ships which are expected to be phased out in next few years. Simultaneously, your company has also floated tenders for acquisition of new-building ships during 2025-26. These tenders have been floated under the strategic initiatives like formation of proposed JVCs with Oil CPSEs and BCSL.

8.3 Eco-Friendly and Conservation of Energy

As a policy, your Company remained committed to environmental protection as per International Convention for the Prevention of Pollution from Ships (MARPOL). Necessary steps have been taken to minimize air pollution and oil pollution from ships.

The Company continues to undertake various energy efficiency and decarbonization initiatives across both existing and new vessels with the objective of enhancing operational efficiency, reducing fuel consumption and minimizing emissions. On existing tanker vessels, Energy Saving Devices (ESDs) such as

Propeller Boss Cap Fins (PBCF) and low-friction hull paints have already been implemented on select vessels, while the balance fleet is being covered in a phased manner depending on its feasibility. In respect of existing bulk carriers, installation of such measures is planned in line with their Dry Docking schedule commencing from FY 2026-27.

For New building projects, dual fuel technology is being adopted along with various energy efficient design features, depending upon vessel type, technical suitability and feasibility. These include devices such as rudder bulbs, application of advanced low-friction hull coatings, etc. In addition, new vessels are being specified with smart ship solutions envisaged to improve operational efficiencies and monitoring performance for regulatory compliance and sustainability.

Other measures include prohibition of single use plastics (SUP) onboard vessels in compliance with DGS orders, regular hull cleaning, propeller cleaning / polishing / periodic hull coating during drydock, use of tin free and cybutryne free Anti-fouling paints, use of bio fuel on pilot basis, using environmental friendly refrigerants, use of asbestos free products onboard, installation of Ballast Water Treatment plants (which has been completed on all 42 vessels required to be fitted with BWTS), replacement of existing lights with LED lights, etc are some of the measures showing your company's commitment to Eco-friendly policies and conservation of energy.

8.4 Technology Absorption, Adoption and Innovation

The technological advancement in Maritime sector is focused towards optimizing ship operations, building cost efficiencies, developing sustainable and environment friendly maritime business. The 2023 IMO GHG Strategy is particularly focusing on reduction in carbon intensity of international shipping (to reduce CO2 emissions per transport work), as an average across international shipping, by at least 40% by 2030. The 2023 IMO GHG Strategy also includes a new level of ambition relating to the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources which are to represent at least 5%, striving for 10%, of the energy used by international shipping by 2030. Your company is committed to align with IMO's 2023 revised GHG Emissions strategy. Your company is continuously trying to identify and implement emission reduction technologies and best practices.

Your company has completed installation of Ballast Water Treatment Plants on all those required vessels which were not fitted with the treatment plants.

To take care of the Cyber related risk, SCI has developed “Cyber Risk Management Policy” in line with the IMO regulations, so as to build capabilities to prevent, mitigate and respond to cyber risks, to reduce vulnerabilities and minimize damage from cyber incidents and protect information systems of SCI. For the (2 firm + 1 optional) 2000 Domestic LPG Carriers for UTL Administration which are under construction at M/s Goa Shipyard Limited, your company as the technical consultant has recommended various optional features such as installation of sewage treatment plant, double hull protection to fuel oil tanks, etc. over and above rule requirement for such size of vessels which reflects your company's commitment towards environment protection and technology absorption.

9.0 Situation in Coastal operation and Offshore areas:

Coastal shipping in India continues to receive significant focus from the Government as an efficient and sustainable mode of transportation aimed at reducing congestion on road and rail networks, lowering logistics costs and promoting environmentally sustainable cargo movement.

In the Indian context, coastal shipping constitutes a critical component of domestic logistics, leveraging the country's extensive coastline of more than 11,000 km, 12 Major Ports, and over 200 notified non-major ports. Over last decade, coastal cargo volumes have shown consistent growth, rising from 161 MT in FY 2013-14 to 339 MT in FY 2024-25, marking a strong increase of ~110% over the period @CAGR 7%.

In the offshore sector, ONGC continues to remain the dominant player in the Indian offshore E&P industry. ONGC remains focused on sustaining production from mature offshore fields such as Mumbai High, through technical collaborations for production enhancement, while simultaneously progressing development activities in deep-water assets located in the KG Basin on the East Coast. ONGC is expected to continue substantial investments in offshore exploration and production projects during the current financial year.

Further, ONGC has concluded few tenders during the year for chartering of offshore support vessels and additional tenders for offshore requirements are expected to be floated in the near future, thereby generating continued business opportunities for offshore vessel operators.

However, shortage of competent and suitable onboard manpower continues to remain a major concern for the Indian offshore industry, adversely impacting vessel operations and deployment. In addition, limited availability of shipyards and dry-docking facilities on the Indian coast for repairs and maintenance of offshore vessels continues to pose operational challenges for your Company's offshore business.

10.0 Measures taken to improve services and operations

In order to maintain technological competitiveness and enhance operational efficiency, your Company has upgraded 04 nos. 120T BP AHTSVs from DP1 to DP2 configuration, in line with the operational requirements of E&P operators. These vessels have also been equipped with advanced systems and fitments such as Electronic Fuel Management System (EFMS), CCTV surveillance systems and Data Loggers, thereby improving operational monitoring, fuel efficiency and safety standards.

Your Company also continues to explore opportunities for augmentation and modernization of its offshore fleet through acquisition of suitable vessels for deployment in the Indian offshore market, in line with evolving industry requirements and future business opportunities

Purchase & Services department: Procurement of Goods and Services:

Your company enters into rate contract on periodical basis for procurement and supply of high value and safety items like Marine Lubes, Marine Paints, Charts, Wire ropes, LSA / FFA, Life Rafts etc. both at Indian ports and major foreign ports, like Singapore and Fujairah. This ensures timely supply of right quality goods / services to the vessels at reasonable price.

During the financial year 2025-26, your Company continues to support the Micro and Small scale Enterprises (MSEs) by procuring 44.16% of its applicable supplies of goods and services from MSEs as against the set target of 25% in line with the Public Procurement Policy. The Procurement from Women MSE vendors during the year is 3.85% of total eligible procurement exceeding the target of 3% earmarked for women category, while the procurement from SC/ST owned MSE Vendors is 0.60% of eligible procurement as against the requirement of 4% specified under Public Procurement Policy. The shortfall in sub-target of SC-ST vendors has been met from other MSE vendors.

Further, your company actively participates in the programs organized by the Ministry so as to make MSEs aware of the SCI's requirements. The Vendor Development Programmes (VDP) were conducted by your company on 17th April, 2025 for developing SC/ST and Women owned MSE vendors and on 19th Dec. 2025.

In line with Government's vision for procurement through Government-E-Marketplace, your company has adopted the Government e-Marketplace (GeM) system of procurement for items which are available in GeM. Target for procurement through GeM portal was set at Rs.286 Crore for the financial year 2025-26. With consistent efforts, your company was able to achieve 100% target set for the procurement through GeM portal.

Protection & Indemnity (P&I) Insurance:

Protection and Indemnity (P&I) Insurance cover entered with three International Group P&I Clubs for your company's fleet for the policy year 2025-26 commencing from 20.02.2025 has been negotiated by your Company. There was an increase of 3.58% in the renewal premium over the expiring premium for policy year 2024-25.

Developments, if any, There is no material changes affecting the financial position of the company which have occurred between the end of financial year of the Company to which financial statement relates and the date of the report.

International Safety Management Cell:

The SCI has introduced the Safety Management System by setting up a dedicated International Safety Management (ISM) Cell, which has developed, structured and documented procedures in compliance with the International Management Code for Safe Operation of Ships and for Pollution Prevention (ISM Code), in accordance with the resolution A.788(9) of the International Maritime Organization (IMO) and SOLAS, Chapter IX.

The SCI has laid the foundation of the Safety Management System (SMS) by recognising that the cornerstone of good Safety Management is a commitment from the top management, coupled with the competence, attitude and motivation of individuals at all levels, that determines the expectations of a good Safety Management System.

The SCI has complied with all the functional requirements of the ISM Code, which includes the Safety, Occupational Health & Environment Protection Policy, Drug & Alcohol Policy and Cyber Security Policy. As regards, Safety Management Certificate (SMC) for SCI fleet, all ships are put up for periodical/ renewal SMC audits within time frame and respective SMCs are accordingly endorsed.

The requirements of various amendments to ISM Code and Statutory regulations from IMO/Flag are also complied with.

Towards addressing all emergency related issues officers with dedicated single point contact numbers remain manned 24 hours in the operating divisions. The achievement of time-bound certifications was the result of the SCI's strength of professional experience, planning, training, execution, systematic analysis and quality expertise, which enables SCI to remain world-class ship operator/ owner. The SCI is also in a position to provide such management expertise to other national/ international ship operators.

The SCI has successfully implemented the ISPS Code on all vessels on international voyages and coastal trade vessel as per the Administration requirement. SCI is committed to the following objectives to fulfil the requirements of its security policy:

Security of its ships and their crew, passengers and cargo

Support to its ships in implementing and maintaining the Ship Security Plan.

Integrated Management System (IMS)

SCI is now in compliance with IMS (ISO 9001:2015 Quality Management System, ISO 14001:2015 Environmental Management System and ISO 45001:2018 Occupational Health and Safety Management System) on board all vessels and shore establishments.

The scope of IMS certification includes

(1) Owning, Managing and Chartering of ships for transportation of Goods and Passengers, (2) Offshore and Marine Advisory Services.

The Certificates valid till 20th December 2027. D. PERSONNEL AND ADMINISTRATION A. FLEET PERSONNEL

The global maritime industry continues to face a significant shortage of qualified seafarer officers. Reports published by the Baltic and International Maritime Council (BIMCO) and the International Chamber of Shipping (ICS) have highlighted the widening gap between the demand for and supply of competent officers, driven by the continued expansion of the global merchant fleet. This shortage is evident across all ranks and vessel segments, including Bulk Carriers, Special Trade Passenger Ships, offshore vessels, and vessels requiring Near Coastal Voyage (NCV) certified officers.

In response to these industry challenges, the Fleet Personnel Department of The Shipping Corporation of India Ltd. (SCI) has adopted a multi-pronged strategy focussed on strengthening both recruitment and retention of seafarers. Key initiatives undertaken during the year included market-aligned wage enhancements, career progression opportunities through parallel sailing arrangements for senior officers, regularisation of eligible officers, rejoining incentives, family carriage facilities, and focussed recruitment drives. These initiatives have resulted in improved manning levels, particularly for offshore vessels and Special Trade Passenger Ships. SCI continues to strengthen its talent acquisition efforts by regularly advertising vacancies on the Company's website and expanding its outreach through social media platforms to attract qualified maritime professionals. Officers are recruited both directly and through approved manning agencies to ensure timely availability of competent personnel for operational requirements.

The Company also maintains a robust pipeline of future officers by inducting Deck Cadets, Engine Cadets, and Trainee Electrical Officers into the regular roster upon successful completion of shipboard training and acquisition of Certificates of Competency (CoC), in accordance with the provisions of the INSA-MUI Agreement. Further more, 2nd Mates and Marine Engineer Officers (MEO) Class IV officers are inducted from the open market to bridge identified gaps and ensure continuity in officer availability.

The Collective Bargaining Agreements (CBAs), namely the National Maritime Board (NMB) Agreement applicable to Ratings and Petty Officers and the INSA-MUI Agreement applicable to Officers, continue to remain in force and are valid up to 31 December 2027.

As on 31 March 2026, SCI had an onboard strength of 2,267 seafarers. The Company's workforce comprised 1000 Regular Personnel, while 1,267 personnel were engaged on direct contract. SCI continues to maintain an adequate and competent manpower pool to meet its present operational requirements and support future business growth.

In recognition of the outstanding contribution of its seafarers, SCI organized the Fleet Excellence Awards 2024 Ceremony on 2 July 2025 at the SCI Auditorium. The event was attended by Senior Management, Floating Staff, Cadets, and Shore Personnel, and celebrated excellence in safety, adherence to International Safety Management (ISM) norms, operational efficiency and incident-free sailing.

SCI remains committed to promoting diversity and inclusion within the maritime sector. During FY 2025 26, the Company employed 22 women officers and 9 women trainees. Various initiatives, including age relaxation and fee concessions for female cadets, continue to encourage greater participation of women in seafaring careers.

As part of its digital transformation initiatives, SCI has successfully implemented an online system for the transparent selection of Ratings. The system is being continuously reviewed and upgraded to improve efficiency, transparency, and alignment with evolving industry best practices.

The Fleet Personnel Department remains committed to developing a highly skilled, competent, and future-ready workforce. Through competitive compensation, structured career development, continuous training, performance management, and enhanced employee engagement, SCI continues to attract, develop, and retain maritime talent while reinforcing its position as India's premier shipping company and a trusted global maritime enterprise.

Material developments in Human Resource / Industrial Relations front, including number of people employed:

The total Manpower as on 31.03.2026 is 443 (excluding Board Level members), out of which 420 are officers and 23 are staff members. With a view to meet the present and future challenges and being a globally competitive Corporation, various capacity development initiatives and employee engagement activities were carried out in the year FY 2025-26.

Training and Employee Engagement Activities of 2025-26: Training:

The Shipping Corporation of India Ltd. (SCI) as an Organization promotes culture of continuous learning. In-house as well as external Training and Development activities are undertaken for employees for professional development and training of employees to enhance their skills, knowledge, and performance in alignment with organizational goals.

During FY 2025-26, SCI employees benefited from over 48 in - house and external training, development and awareness programmes. Training man days per employees stood at 1.39 days.

Based on organizational needs, Training Need Identification process aimed at imparting specific knowledge or skill, employees were sent for training and development programmes in the areas of General Management skills, Technical skills, Compliance, Leadership, Health & Safety, IT, and Legal.

Employees were provided training on topics under Health & Safety, in an attempt to ensure the health and well-being of the employees.

Training on IT systems like DANAOS, SAP HCM, SRM, MM, FI and Tender document uploading was imparted by the IT department. Some of the key conferences attended by employees are Bunkering India, Bharat CPSEs Consultative Conclave, Coaltrans, Law of Contracts, Cyber security, Maritime Knowledge Lecture Series, etc.

Employee engagement:

Numerous in-house events/initiatives were carried out towards employee engagement for employees both ashore as well as onboard.

The birth anniversary of Bharat Ratna Dr. B. R. Ambedkar was celebrated on 14th April, 2025. The International Day of Yoga 2025 was celebrated wherein expert-led sessions focused on the Common Yoga Protocol were conducted by faculty from Shri Ambika Yoga Kutir. SCI hosted a phygital session on Stress Management led by Dr. Manjeet Singh Arora, Senior Consultant General Physician, Fortis Hospital, Mumbai. To mark the 10th Ayurveda Day, SCI organized a free Ayurveda consultation camp for employees, conducted by Dr. Tanvi from Tanvi's Veda-Chikitsa. A phygital session was conducted to emphasize core Ayurvedic principles including Ahar (diet), Vihar (lifestyle), Dincharya (daily routine), Rutucharya (seasonal regimen), and mental wellness, with a special focus on women's health. For the wellness of employees, health check-up camps were organized. For celebration of five years of Nasha Mukt Bharat Abhiyaan (NMBA) a pledge taking event was organized. A camp for Aadhaar and PAN Correction in association with ICICI Bank, Nariman Point. Hindi Quiz Competition on Indian Language Knowledge was held. The birth anniversary of Chhatrapati Shivaji Maharaj was celebrated on 19th February, 2026. SCI employees participated in the DGS Maritime 10k Run & Cyclothon 2026, as a flagship event during the National Maritime Day Celebration Week.

Reservation Policy

SCI is complying with all the guidelines issued by the Government of India regarding Reservation as applicable from time to time in Recruitments and Promotions.

SC/ST/OBC Report

Annual Statement showing the representation of SCs, STs and OBCs as on 31.03.2026 and number of appointments made during the preceding Financial Year (01.04.2025 to 31.03.2026).

*Below board level executives

Women Representation

Company is committed to the principle of equal employment opportunity and strives to provide employees with a workplace free from discrimination. All HR activities of recruitment, placement, promotion, transfer, separation, compensation, benefits and training ensure equal opportunities for skill enhancement and career progression. Company's efforts are reflected in the representation of women across various hierarchical grades. Women constitute around 21% of total workforce at shore establishments of SCI.

Policy to prevent sexual harassment at work place.

SCI promotes gender equality and has been taking proactive measures to prevent any Sexual Harassment at workplace. SCI has been complying with the requirements of the “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”. SCI has prepared a Prevention of Sexual Harassment policy in line with the Act. SCI has constituted a committee comprising of senior women executives, legal representative and a woman representative from the NGO Pratham to enquire into complaints of Sexual Harassment at the workplace. No complaints were received in the year FY2025-26 related to Sexual Harassment.

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013]along with the following details:-

Compliance to the provisions relating to the Maternity Benefits Act, 1961.

SCI is complying with the necessary provisions as contained in the Maternity Benefits Act, 1961.

CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABLE DEVELOPMENT FOR FY 2025-26

The Corporate Social Responsibility vision of the company articulates its aim to be a corporate with its strategies, policies and actions aligned with wider social concerns, through initiatives in education, public health, nutrition and other areas of social upliftment. SCI has framed its CSR policy in line with the guidelines contained in the Companies Act 2013 and Companies (CSR Policy) Rules, 2021 & 2022 notified therein and constituted a CSR committee as per the act to coordinate and oversee the implementation of CSR initiatives. The budget available for a CSR initiative in the year FY 2025-26, as per applicable provisions was Rs. 14.21 crore, which was allocated against the following initiatives in the year FY 2025-26:

Health, Sanitation & Safe Drinking Water

1. Support for upgrading medical infrastructure by providing one radio frequency generator machine to Dr Bhubaneswar Barooah Cancer Institute (a unit of Tata Memorial Centre), grant in-aid institute of department of Atomic Energy, Government of India at Assam, Guwahati.

2. Support for upgrading medical infrastructure by providing medical equipments to set up an additional OT at the Saidham Charitable Hospital through Dr Mane Medical Foundation & Research Centre at Ahmednagar, Maharashtra.

3. Support for upgrading medical infrastructure by providing medical equipments in sub-district hospital - Armori.

4. Support for construction/ renovation of toilets blocks in Higher Education Hostel, Banswara and construction of 4 new classrooms & toilet blocks in Shri Ram Higher Secondary School Sajjangarh, Banswara, Rajasthan.

5. Support for upgrading medical infrastructure by providing critical care equipment's viz. three Dialysis Machine, one C-Arm machine flat panel with OT Table and ten Radiant Baby Warmer at 4 government hospitals viz. Civil Hospital Alibag, Sub District Hospital Mangaon, Sub District Hospital Shriwardhan and Sub District Hospital Panvel, Maharashtra

6. Support for upgrading medical infrastructure by providing medical equipments at the Urology department of AIIMS Bhopal, MP.

7. Support for setting up 25 nos of PVC Pipe tube well having 300 ft. length along with drinking water dispensers in 25 government / government aided schools in North & South 24 Parganas, West Bengal.

8. Support for upgrading medical infrastructure by providing various medical / surgical / laboratory equipments at a 45 bedded Boko Government Community Health Centre in Kamrup, Assam.

9. Support for upgrading medical infrastructure by providing medical equipments for setting up eye operation theatre (total 12 equipments) at Sadar Government hospital, Sahibganj aspirational district in Jharkhand.

10. Support for Reconstruction of Sulabh Toilet at Dawri Nagar, Vakola Road, Santacruz (E), Mumbai. 11. Support for Nanha Sa Dil Programme Heart surgeries for 50 children suffering with congenital heart defects at Sri Sathya Sai Sanjeevani Hospital-Navi Mumbai, Maharashtra.

12. Support for construction of toilet blocks in three Zila Parishad Schools and implementation of behavior change communication programs at Raigad, Maharashtra.

13. Support for providing provision of treatment to 500 children born with clubfoot through Ponseti - non surgical method at government hospitals under the aegis of National Health Mission at Mumbai, Visakhapatnam & Kolkata.

14. Support for Installation water coolers with in-built RO Systems in 50 government schools with 2 years AMC at Bargarh, Odisha.

15. Support to run a programme "The Kalgyani Project" to build legally literate, rights aware communities by empowering rural women and engaging men and boys as allies to prevent gender based violence, challenging gendered social norms and encouraging women's participation in decision making and leaderships in Thoothukudi, Tamil Nadu.

B. Environment Sustainability

16. Illuminating Rural Features Support for installation of 100 solar street lights in rural blocks of Bokaro, aspirational district in Jharkhand.

17. Installation of Solar Power Systems of 5KW each in 5 government schools in Gomati, Tripura.

18. Illuminating Rural Areas Support for installation of 81 nos of LED Solar street light system in rural areas Muzaffarpur, aspirational district in Bihar.

C. Promotion of Education

19. Support for one school bus to reduce the transportational barrier of underprivileged children residing at institutional center and studying at schools away from the centre in Mumbai, Maharashtra.

20. Augmentation of facilities viz. construction of new classrooms and toilet blocks for better sanitation facilities at Siyana public inter college (a govt. aided educational institution) in Bulandshahr, Uttar Pradesh. 21. Support to set up 30 single teacher schools in urban slums for addressing the educational needs of approx. 800 underprivileged children in 3 districts for a period of one year at Jaipur, Sikar and Jodhpur, Rajasthan 22. Support for funding the ongoing establishment of health and educational institution (Saraswati Shishu Mandir) including skill development centre and hostel at North 24 Parganas, West Bengal.

23. Support for one school bus for Happy by Nature School, where commuting to the school and back is one of the biggest challenges for children at Dunda, Uttarkashi Uttarakhand. 24. Annual Grants for Maritime Education' Supporting 75 underprivileged students pursuing maritime related courses at various campuses of IMUs & MTI.

25. Support for completing the construction work of New Building of Swadeshi Sodh Sansthan - which is designed to be an epicentre for research that supports and amplifies India's strategic interests in sustainable development, technological advancement, and social innovation.

D. Employment Enhancing Skill Development

26. Support for ITI students for skill training in the area of firefighting at Maritime Training Institute, Powai. 27. Support for running an Artificial Intelligence programme through 8 workshops targeting 4000+ students. as part of “AI Literacy for All”, a nationwide AI skilling & literacy initiative to provide foundational AI knowledge, responsible-use awareness, hands-on exposure to AI tools, and career-readiness support to school, undergraduate, and postgraduate students with priority for underserved and economically weaker groups in New Delhi.

Material Orders of Judicial Bodies / Regulators

Details of significant and material orders passed by any Regulator, Court, Tribunal, Statutory and quasi-judicial body, impacting the going concern status of the company and its future operations NIL

Implementation of Official Language Policy

In accordance with the Official Language policy of the Union Government, SCI continued its persistent efforts towards the progressive use of Hindi in its day-to-day affairs during the year under report. As per annual programme, SCI conducted Hindi activities and competitions at regular intervals and awarded prizes to the employees. Apart from this, SCI also arranged in-house Hindi typing and translation training programme. Under the Hindi Incentive Scheme, employees' children were encouraged by giving incentive prizes for scoring 70% and above marks in Hindi subject in SSC / HSC level exams held in the academic year 2024-25. With a view to creating a sense of competition amongst all Divisions/Departments and individual officers for increasing the use of Hindi in daily correspondence and activities, the Annual Rajbhasha Shield (at Divisional Level) and Annual Rajbhasha Gaurav Sammaan (at Individual Level) schemes were continued for FY 2025-26 after necessary modifications. For the year FY 2025-26, the “Annual Rajbhasha Shield” was awarded and

“Annual Rajbhasha Gaurav Sammaan” was awarded to eligible officers on the basis of their Hindi performance. All these initiatives have proved to be a booster for progressive use of Hindi in daily office routine work. During Hindi Pakhwada in September 2025, an appeal made by CMD was emailed to all employees to enhance the usage of Hindi in official noting and correspondence. SCI also attended meetings of Town Official Language Implementation Committee (TOLIC) during the year under report and participated in their activities. SCI has conducted a Hindi Seminar on “Sensitisation of POSH Act”.

Appointment and Remuneration policy a) For Board Level Post

Being a Government Company within the meaning of Section 2(45) of the Companies Act, 2013, the prior approval of the Government of India is required for appointment to the posts of Board-level Directors. Accordingly, the authority for appointment of Directors to the Board of the Company rests with the Government of India, and the terms and conditions governing the appointment of Directors are determined by the Government of India. SCI, being a Government Company, the Whole-time Directors are appointed by the Government of India and draw remuneration as per Industrial Dearness Allowance (IDA) pay scale, pre determined by the Government, as per the terms and conditions of their appointment issued by the Government.

The Non-Executive Part-Time Ex-Officio Directors (Government Directors) do not draw any remuneration/sitting fees from the Company for their roles as Director but draw their remuneration under Central Dearness Allowance (CDA) scale from the Government as government official.

The Independent Directors are paid a sitting fee of Rs. 30,000/- for attending every meeting of the Board of Directors and Committee(s) thereof. b) Other than Board Level Post

The appointments of below Board level employees in the company are done by the Head of the Organization in accordance with Government of India guidelines. The Senior management and other employees of the company draw remuneration as per Industrial Dearness Allowance (IDA) pay scale based on the Presidential Directive issued by the Ministry of Ports, Shipping and Waterways (MoPSW) derived from Department of Public Enterprises (DPE) guidelines, which forms the remuneration policy of the company. SCI's policy relating to remuneration of directors, key managerial personnel and other employees, is available on the Company's website

Memorandum of Understanding (MOU) with the Ministry of Ports, Shipping & Waterways

The MOU for the Financial year 2025-26 is under progress. The MOU is being processed as per the consolidated guidelines issued by Department of Public Enterprise (DPE) vide circular dated 28th March 2025. Under the new guidelines, entering, signing, monitoring and evaluation of MOU will be done through online dashboard. SCI MOU rating for past years are as follows:

MOU performance evaluation data for the Financial Year 2025 26, based on audited accounts, shall be submitted to DPE through the online dashboard after approval of the Board, and routed through the Administrative Ministry, by 31st October 2026. a) Ship Availability as a percentage of Total Ships:

The Planned Ship Availability (Total days of the year less quoted days for planned repair and dry dock) for 59 ships for FY 2025-26 was 20074 days. The Ships were available (Total days of the year less Actual repair and dry dock days) for 18984 days which is 94.57 % to the Planned Ship Available days. b) Revenue from Exports:

Earnings of SCI from Export Revenue as per the GST Returns filed for the FY 2025-26 amount to Rs. 1,69,780 Lakh (previous year Rs. 1,78,151 Lakhs). Basis the above, export earnings as a percentage of Revenue from Operations for the FY 2025-26 stands at 29.37% (previous year 31.78%). c) On Boarding on TReDS Platforms :Details of TReDS platforms and their on boarding is tabulated below:

d) GeM procurement for FY 2025-26 is 307.67 crores vis a vis of Total Procurement of 498.83 crores e) Details of Annual Procurements with details of MSEs:

* Further, your company actively participates in the programs organized by the Ministry so as to make MSEs aware of the SCI's requirements. The Vendor Development Programmes (VDP) were conducted by your company on 17th April, 2025 for developing SC/ST and Women owned MSE vendors and on 19th Dec,2025. Despite the aforesaid efforts, SCI could achieve procurement of only 0.60% from SC/ST MSEs. f) Compliance parameters not verifiable from any outside sources:

(I) DPE guidelines issued from time to time on CSR expenditure by CPSEs has been complied with.

(ii) Parameters w.r.t. steps and initiative taken for Health & Safety improvement of Human Resources in CPSEs has been complied with.

(a) Integrated Management System including Quality Management System, Environment Management System and Occupational Health and Safety, Management Systems, (b) MLC 2006 requirements which protect health and safety of seafarers (c) Health Checkup (iii) Parameters w.r.t. Leadership Development Plan has been complied with.

(iv) There is no delay in payments to MSE vendors for verified amounts as prescribed in MSMED Act g) Compliance parameters not applicable to the Company :

(i) Targets under PM Internship scheme of MCA.

(ii) Surplus non-core assets (land & building) monetization plan (iii) Expenditure on R&D (including Innovation Initiatives) h) SCI Board has granted exemption to its subsidiaries viz. Inland Coastal and Shipping Limited (ICSL)and SCI

Bharat IFSC Limited from signing MoU, in accordance with Clause 4.1 of DPE circular dated 28.03.2025, which empowers Holding Company to take such a decision.

Utilization of Proceeds from public issues,right issues, preferential issues etc.

During the year 2010-11, your Company had floated a “Further Public Offer”, (FPO), comprising of a ‘fresh issue' of 42,345,365 equity shares in your company and an ‘offer for sale' of 42,345,365 equity shares by the President of India. The FPO proceeds of Rs. 582.45 crore were fully utilized in the financial year 2011-12 as per object of the issue for part financing of capital expenditure on nine shipbuilding projects. However, due to delays in the projects resulting in default by the shipyards, during the period January 2014 to May 2014, your Company rescinded contracts for four shipbuilding projects and also, re-negotiated the payments for two projects. The investment in the rescinded contracts out of the FPO Proceeds was 330.65 crore. Your Company has received back entire sum of 330.65 crore from the shipyards. The shareholders vide the resolution passed through postal ballot on 11.02.2017 approved the proposal to re-deploy the said sum of 330.65 crore received as refund from Shipyards, towards various shipbuilding projects including offshore assets and liquid petroleum gas (LPG) vessels and also for acquisition of the any other such vessels, on such terms and conditions as the Board would deem fit from time to time as mentioned in the approval of the postal ballot. Further based on the approval granted by the shareholders, the Company can also utilize the sum towards the balance payments remaining due for the tonnage acquisition made by it. Out of the said amount of 330.65 crore, entire amount has been utilised till date (as on 31.03.2026) as follows

Large Corporate Entity

SCI is “Large Corporate” fulfilling the criteria specified in para 3.2 of SEBI circular no SEBI/HO/DDHS-RACPOD1/P/CIR/2023/172 dated 19.10.2023. The outstanding Qualified borrowings as at the start of Financial year 2026 was 1585 crore and the outstanding Qualified borrowings as at the end of the Financial year 2026 was 2130 crore. Hence, there is “incremental borrowings” by SCI in FY 2026 to the extent of 776 crore.

Segment-wise Performance

Report on performance of the various operating segments of the Company (audited) is included at Note No. 31 of the Notes on Financial Statements (Standalone) for the year ended 31st March 2026, which is forming part of the Annual Accounts.

Internal Control System and their adequacy:

The Company has an internal control system that is adequate and commensurate with the size, scale and complexity of its operations. Internal control framework and Risk Control Matrix (RCM) for various business processes is in place. The internal control systems (including Internal Financial Controls over Financial Reporting) are reviewed on an ongoing basis and necessary changes are carried out to align with the changing business / statutory requirements. The scope and authority of the Internal Audit function is defined in the Internal Audit Plan, which is approved by the Audit Committee. The internal audit examines, evaluates and reports on the adequacy and effectiveness of the internal control systems in the company, its compliance with the laid down policies and procedures and ensure compliance with applicable laws and regulations. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. To maintain its objectivity and independence, the Internal Audit reports are submitted to Audit Committee of the Board on quarterly basis. Significant audit observations and corrective actions thereon are reviewed, deliberated and presented to the Audit Committee of the Board.

Dividend Distribution Policy:

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the top 1000 listed entities shall formulate a dividend distribution policy. Accordingly, dividend distribution policy has been adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retaining the profit into the business. The policy is available on the website of the Company at the link https://www.shipindia.com/upload/policies/SCI_Dividend_Distribution_Policy2.pdf Role of Vigilance Division in SCI:

SCI has a full-fledged Vigilance Division headed by Chief Vigilance Officer. The Division operates as per the guidelines of the Central Vigilance Commission for Vigilance management in Public Sector Enterprises and is guided further by the instructions issued by the Ministry of Ports, Shipping and Waterways. During the year under review, the Chief Vigilance Officer put in place preventive vigilance initiatives in the business processes thereby striving towards greater transparency and improved ethical & corporate governance standards. There was concerted effort to achieve greater transparency and eliminate systemic weaknesses through use of technology in business processes such as e-payments, Supplier Relationship Management, bill tracking, greater use of GeM portal and online dissemination of important circulars/ guidelines. Vigilance Division interacted with various employees of SCI as well as various stake holders which has helped in understanding the issues from their perspective as well.

Activities of the Vigilance Division carried out in 2025-26

During the year under review, the Vigilance Division carried out the activities under Preventive, Punitive and Participative Vigilance. The important activities carried out in 2025-26 by the Vigilance Division were as follows: A. Complaints were handled as per complaint handling policies stipulated in Vigilance Manual issued by the Central Vigilance Commission. B. In adherence to the CVC guidelines, random scrutiny of APRs of SCI employees was carried out. C. Active monitoring of the implementation of Integrity Pact in SCI has been done.

D. Vigilance Division has acted as a catalyst in the implementation of preventive vigilance measures such as e-payments, bill tracking systems, transfers of employees posted in sensitive areas in a phased manner etc. E. As part of preventive vigilance activities, a surprise inspection in B&T Division was carried out by the Vigilance Division, on basis of which recommendations for systemic improvements were issued. Subsequently, CTE Type Inspection of Contract for Supply of Ballast Water Treatment System to Aframax Tankers was completed and recommendation was issued to concern division.

F. As a part of system improvement measures, following systemic improvement has been carried out on recommendation of Vigilance division;

1) Standardization and circulation of uniform format to SCI Board level Officers for submission of their Annual Property Returns.

2) Issuance of circular on Reporting System for issuance of Administrative Action / Memo to the employee.

3) Revival and updating of IT infrastructure portal to allow employees to independently verify their assigned IT assets and raise queries in case of discrepancies.

4) Issuance of Office Order by B&T Division mandating the use of e-BG for all high-value tenders.

5) An interactive session for SCI employees on the theme 'Mistakes in Filing Annual Property Return' during the campaign period wherein the employees were sensitized and educated regarding APR.

6) Installation of 'Suggestions Box' for inviting suggestions towards improvements in various processes in SCI at Shipping House, Mumbai.

7) The Asset Management Policy was adopted by SCI after approval by the Board on 06.02.2026.

8) Recommendations were issued to the concerned department highlighting specific areas of tender processing where the Dry Dock Committee could have exercised greater diligence.

9) Systemic measures were recommended to strengthen controls, improve transparency, and ensure greater economy in vessel repair and maintenance operations.

10) The report has been forwarded to Concerned Division of the company for necessary action towards the adoption and implementation of the suggested systemic improvements towards Recruitment posting policy and claims-settlement process relating to Fleet Personnel Department.

G. A number of training sessions in various thematic areas as a part of precursor campaign period of the Vigilance Awareness Week 2025 were conducted for SCI officers as follows:

1) SCI organized an insightful session on the theme” GST 2.0: Major shifts and IMS ( Invoice Management system)- What Business Must Know. Over 140 employees participated, gaining valuable insights into the evolving GST landscape and its impact on business and its thrust on transparency, compliance and efficiency.

2) Session on the theme “Cybersecurity: Safeguarding in an Evolving Maritime Digital Ecosystem” led by industry experts at Mastercard was organized at SCI. Speakers highlighted about cyber maturity mapping with standards, cyber crisis simulations, evolving nature of AI-driven cyber threats & user awareness on cyber vulnerabilities with a perspective on Maritime industry.

3) An Interactive session on GeM Procurement was delivered by GeM officials. The session highlighted on new functionalities for GeM buyers amongst various other aspects of GeM.

4) An interactive session on the theme of ‘Common Mistakes in Filing of Annual Property Return' was conducted at SCI H.O. H. Following Seminars/Workshops were organized by SCI to increase awareness and participation among vendors

1) On August 20, 2025, Shipping Corporation of India (SCI) organized a Vendor Familiarization Program on the Trade Receivables Discounting System (TReDS) platform, in collaboration with Invoicemart India's leading TReDS platform. The session aimed to promote digital awareness and financial inclusion among MSME vendors, who are key stakeholders in SCI's supply chain.

I. As part of Vigilance Awareness Week, The outreach programs such as Poster making competition, Slogan writing competition, Quiz competition, Essay writing competition were conducted throughout India by SCI in two schools in Mumbai namely, Lok Kalyan Public School, Kalyan and PM Shri Kendriya Vidyalaya I, Colaba, Mumbai, Queens of Mission School in Kolkata, PMSHRI Kendriya Vidyalaya in New Delhi, Muthialpet Higher Secondary School in Chennai and Andaman Law College and Jawaharlal Nehru Rajkiya Mahavidyalayam in Port Blair Wherein various competitions for schoolchildren were conducted with the aim of inculcating ethical behavior among younger generation.

Outreach programs were also conducted in professional institute viz. Maritime Training Institute (MTI) in Mumbai and Indian Maritime University in Kolkata. In MTI, the cadets presented a thought- provoking skit which was based on theme of Vigilance Awareness Week. These activities were geared towards making the youngsters reflect on prevalent corrupt activities which have become a norm in our day to day life and the ways these can be stopped.

J. Awareness campaign was conducted on-board SCI ships for generating awareness about Vigilance amongst seafarers. The Integrity pledge was also administered onboard the ships and banners were displayed.

During the FY 2025 26, total 9 nos. registered complaints were processed by the Vigilance Division. As on 31/03/2026, 6 registered complaints have been disposed off as per prescribed procedure while scrutiny of the remaining 3 complaints is in progress.

Cautionary Statement

The statements made in the Management Discussion and Analysis report describing Company's objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.

Key Managerial Personnel

Details of Key Managerial Personnel as on 31.03.2026 are as follows:

Changes in KMP position till the date of report a) The Ministry of Ports, Shipping and Waterways (MoPSW) vide Order No. SS-11035/1/2024-SU dated 05thMay 2025 conveyed that the Disciplinary Authority in this case, in exercise of the powers conferred under The Shipping Corporation of India Limited Conduct, Discipline & Appeal Rules, 2011 (SCI CDA Rules) has imposed a major penalty of "Dismissal from service which will be a disqualification for future employment under the Government or the Corporation/Company owned or controlled by the Government" in terms of Rule No. 23 (j) of SCI CDA Rules upon Shri Chirayu Indradeo Acharya subject to the Approval of Appointments Committee of the Cabinet (ACC). Accordingly, ACC had approved the proposal of the Ministry of Ports, Shipping and Waterways seeking premature termination of appointment of Shri Chirayu lndradeo Acharya from the post of Director (Finance) Shipping Corporation of India Limited (SCI) w.e.f. date of his dismissal from service i.e. 05.05.2025. Hence Shri Chirayu Indradeo Acharya also ceased to be Key Managerial Personnel w.e.f. 05.05.2025. b) Shri Atul Ubale erstwhile Director (B&T) pursuant to his superannuation on 30.06.2025, ceased to be Director / Key Managerial Personnel w.e.f. 01.07.2025 c) Shri Vikram Dingley erstwhile Director (T&OS) pursuant to his superannuation on 31.05.2026, ceased to be Director / Key Managerial Personnel w.e.f. 01.06.2026 d) Pursuant to appointment of Capt. Som Raj as Director (P&A) on 15.07.2025, he was designated as a Key Managerial Personnel with effect from the same date. e) Pursuant to appointment of Shri Nitin Khamesra as Director (Finance) on 23.02.2026, he was designated as a Key Managerial Personnel with effect from the same date. f) Pursuant to appointment of Capt. Chandran Durai Daniel as Director (B&T) on 05.05.2026, he was designated as a Key Managerial Personnel with effect from the same date.

Declaration of Independence

The Company has received Declaration from Independent Directors conforming that they meet the criteria of Independence and have complied with the Code for Independent Directors as prescribed under Companies Act 2013, the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and DPE guidelines. The Independent Directors have confirmed that they are registered with the database maintained by the Indian Institute of Corporate Affairs (IICA) under the Ministry of Corporate Affairs. The Company being a Government Company, the power to appoint Directors (including Independent Directors) vests with the Government of India. The Directors are appointed by following a process as per laid down guidelines. In the opinion of the Board, the Independent Director(s) possess the desired expertise, experience (including proficiency) and integrity.

1. Board Composition FY 2025-26 :

During the financial year 2025-26, the Company is non-compliant with Regulation 17(1) (a) and 17(1) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, regarding the requirement of having at least half of the Board of Directors as Independent Directors including one woman Independent Director. The Company did not have a Woman Director as required under Section

149(1) of the Companies Act, 2013 during the financial year 2025-26. The Company did not have the required number of Independent Directors as required under 149(4) of the Companies Act, 2013 during the period 01/04/2025 to 10/04/2025 and 23/02/2026 to 31/03/2026. During the period under review, the Board was not constituted as required under Clause 3.1.2 and 3.1.4 of DPE Guidelines. The detailed composition of the Board and the changes thereto has been provided in the Report on Corporate Governance, which forms part of this report.

2. Committees of the Board for FY 2025-26:

Due to completion of tenure of all Independent Directors on the Board of SCI on 21.11.2024, the Company was non-compliant from 22.11.2024 till 10.04.2025 with the applicable provisions of extant laws relating to constitution of Statutory Committees. Further, pursuant to appointment of 3 Non-Official Independent Directors on the Board of SCI w.e.f 11.04.2025, all Statutory Committees were reconstituted in compliance with the applicable provisions of extant laws. The detailed composition and scope of the Board level Committees have been provided in the Report on Corporate Governance, which forms part of this report.

3. Number of Meetings of the Board and Committees thereof:

The details in respect of the number of Board Meeting and Committee meetings of the Company are set out in the Corporate Governance Report which forms part of the Annual Report.

Performance Evaluation of Board, Committee and Directors

Your Company, being a Government Company, is exempted from the provisions relating to performance evaluation of the Board and Directors pursuant to the Ministry of Corporate Affairs Notification dated 5 June 2015. However, in order to comply with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which do not specifically provide for a similar exemption to Government Companies, the Company has adopted an internal Board Performance Evaluation Policy.

In accordance with the said Policy, the Company undertakes performance evaluation of individual Directors, the Board as a whole and the Committees of the Board. Further, as per the SCI Board Performance Evaluation Policy, the Nomination and Remuneration Committee is required to review the performance of every Director, including Independent Directors, and the Chairperson.

Though the Company nevertheless undertook the performance evaluation process for individual Directors, the Board as a whole and the Committees of the Board, the outcome of the performance evaluation could not be placed before the Nomination and Remuneration Committee for its review, as the Committee could not be constituted in the prescribed manner in the absence of Independent Directors.

SCI is a Navratna Central Public Sector Enterprise, and the appointment and change in the composition of the Board of Directors are within the purview of the Administrative Ministry/Competent Authority. Accordingly, the Company has limited control over the appointment of Directors, including Independent Directors. The Company is coordinating with the Competent Authority for the appointment of the requisite number of Independent Directors on the Board. Upon appointment and constitution of the requisite Board-level Committees, the outcome of the performance evaluation process will be placed before the Nomination and Remuneration Committee for its review in accordance with the Company's Board Performance Evaluation Policy.

Secretarial Standard

The Company has complied with all the applicable Secretarial Standards.

Secretarial Audit

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board & Shareholders had appointed M/s Upendra Shukla & Associates, Practising Company Secretary firm to conduct Secretarial Audit for the Financial Years 2025-2026 to 2029-2030. The Annual Secretarial Compliance Report in compliance to Regulation 24A of SEBI LODR Regulations 2015 and Secretarial Audit Report in Form MR-3 as per Companies Act, 2013 for the financial year 2025-26 are appended to the Director's report.

The Secretarial Auditor in this report for the year ended 31st March, 2026 has brought out that:

During the year under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. subject to the following observations; a) The Company did not have a Woman Director as required under Section 149(1) of the Act during the period under review. The Company did not have the required number of Independent Directors as required under 149(4) of the Act during the period 01/04/2025 to 10/04/2025 and 23/02/2026 to 31/03/2026. b) During the period under review, the Board was not constituted as required under Regulations 17(1)(a) and 17(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. c) During the period under review, the Board was not constituted as required under Clause 3.1.2 and 3.1.4 of DPE Guidelines. d) In absence of requisite number of Independent Directors, the Audit Committee was not properly constituted as required under Section 177(2) of the Act, Regulations 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 4.1 of DPE Guidelines during the period from 01/04/2025 to 10/04/2025. e) In absence of requisite number of Independent Directors, the Nomination and Remuneration Committee was not properly constituted as required under Section 178(1) of the Act, Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 5.1 of DPE Guidelines during the period from 01/04/2025 to 10/04/2025; f) In absence of requisite number of Independent Directors, the Stakeholders Relationship Committee is not properly constituted as required under Section 178(5) of the Act, Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the period from 01/04/2025 to 10/04/2025. g) In absence of requisite number of Independent Directors, the Risk Management Committee was not properly constituted as required under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the period from 01/04/2025 to 10/04/2025. h) In absence of requisite number of Independent Directors, the Corporate Social Responsibilities (CSR) Committee was not properly constituted as required under Section 135 of the Act during the period from 01/04/2025 to 10/04/2025.

Management Response on the above observations Of Secretarial Auditor is as follows:

The Company being Navratna Public Sector Undertaking (PSU), the Competent Authority nominates Directors on Board. The Company through its various communication letters dated 23.01.2026, 22.12.2025, 02.12.2025, 03.09.2025, 26.08.2025, 06.06.2025, 27.03.2025, 02.01.2025, 22.11.2024, 18.11.2024, 15.10.2024 and 04.09.2024 had taken up the matter with competent authority with a request to appoint requisite number of Independent Directors including women independent director on the Board of the Company.

Statutory Auditors Report

The Statutory Auditors have given an unqualified report on the Financial Statement of the Company for the Financial Year 2025-26.

Comments of Comptroller & Auditor General of India (C&AG)

The Comptroller and Auditor General of India, in their comments under Section 143(6)(b) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2026, have stated that:

Notes to Standalone Financial Statements for the financial year 2025-26

The Company accounted 10.85 crore as grant received during 2025-26, for operation of cargo shipping services between India and Maldives which was adjusted against operating expenditure. However, the Significant Accounting Policy of the Company was deficient to the extent of non- disclosure of (a) its accounting policy on Government grants (including method of presentation in financial statements) and (b) comment on unfulfilled conditions and other contingencies attached to Government assistance that has been recognized as mandated by Ind AS 20 (Para 39).

Notes to Standalone Financial Statements for the financial year 2025-26

The Company received the Income Tax refund order and refund amount during March and April 2026. However, the Company did not recognize the refund on accrual basis in the financial statements. However, the deviation from accrual basis of accounting as per Ind AS 1 (Para 27) for the income tax refunds and interest receivable on same was not disclosed in the notes to the financial statements as mandated by Ind AS 1. Thus accounting of income tax refunds and interest received was in deviation to Ind AS 1 requirements.

Notes to Consolidated Financial Statements for the financial year 2025-26

The Company accounted 10.85 crore as grant received during 2025-26, for operation of cargo shipping services between India and Maldives which was adjusted against operating expenditure. However, the Significant Accounting Policy of the Company was deficient to the extent of non- disclosure of (a) its accounting policy on Government grants (including method of presentation in financial statements) and (b) comment on unfulfilled conditions and other contingencies attached to Government assistance that has been recognized as mandated by Ind AS 20 (Para 39).

Notes to Consolidated Financial Statements for the financial year 2025-26

The Company received the Income Tax refund order and refund amount during March and April 2026. However, the Company did not recognize the refund on accrual basis in the financial statements. However, the deviation from accrual basis of accounting as per of Ind AS 1 (Para 27) for the income tax refund and interest receivable on same was not disclosed in the notes to the financial statements as mandated by Ind AS 1. Thus, accounting of income tax refunds and interest received was in deviation to Ind AS 1 requirements.

Management Response on the above observations of C&AG is as follows : Management Response on Comment No. 1

The Company has been receiving Government grants towards the operation of cargo shipping services between India and Maldives since the financial year 2020 21. The accounting treatment and related disclosures adopted during the financial year 2025 26 are consistent with those followed in previous years. The grant has been recognised by adjusting it against the related operating expenditure in accordance with the principles of Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance.

The observation relates to the disclosures prescribed under Ind AS 20. While the financial statements did not specifically include a) the accounting policy on Government grants, including the method of presentation in the financial statements, and b) an explicit disclosure regarding unfulfilled conditions and other contingencies attached to the recognised Government assistance, the Company confirms that no such unfulfilled conditions or contingencies existed in respect of the grant recognised during the financial year 2025 26.

The observation is disclosure-related in nature and does not affect the recognition, measurement or presentation of the grant, or the profit for the year, total comprehensive income, cash flows or net worth of the Company.

The Company has taken note of the observation and will strengthen the accounting policy and related disclosures on Government grants in future financial statements to ensure full compliance with the disclosure requirements of Ind AS 20.

Management Response on Comment No. 2

The Company has a Board-approved accounting policy dated 17.05.2024 for recognition of interest on Income Tax refunds, under which interest income is recognised upon receipt of the refund amount. The accounting treatment adopted during the financial year 2025 26 is in accordance with this policy, which has been consistently followed over the years, considering the practical uncertainties associated with the receipt of Income Tax refunds and the related interest.

The interest involved in the present case amounts to 1.95 crore and does not have any material impact on the Rs. Company's financial position, financial performance or cash flows.

The Company has taken note of the observation of the Comptroller and Auditor General of India and will review the existing accounting policy and related disclosures in light of the observation and the applicable requirements of the Indian Accounting Standards. Appropriate modifications, wherever considered necessary, will be incorporated in future financial statements.

Cost Auditors and Cost Audit report

The Central Government has not prescribed the maintenance of cost records for any of the business activities carried out by the Company under sub-section (1) of section 148 of the Act and the rules framed there under. Hence not applicable.

Other Disclosures

The status of pending CAG paras as on 31.03.2026 and CAG paras settled during the FY 2025-26 is tabulated as under:-

The replies to these paras have been submitted and awaiting closure from C&AG. The status reports are also being furnished as sought by C&AG from time to time.

Corporate Governance

A report on Corporate Governance pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report and forms part of it.

The Annual report on Corporate Governance 2025-26 is annexed as Annexure V. Business Responsibility and Sustainability Report

The Shipping Corporation of India's Business Responsibility and Sustainability Report (BRSR) for the fiscal year 2025-26 emphasizes its unwavering commitment to Environmental, Social, and Governance (ESG) principles and the strides we have made in addressing sustainability challenges. We see our responsibility to take the lead in sustainable development not only as a duty to the society but also as an opportunity to do well by doing good. The Annual Report on BRSR 2025 -26 is annexed to Director Reports as Annexure - II along with the BRSR Core Assurance Statement.

ESG Related Challenges: Over the past year, we have encountered a range of ESG challenges that have guided our focus on responsible business practices. We acknowledge our responsibility in mitigating the impact of shipping operations on the environment and communities. Additionally, ensuring the safety, well-being, and growth of our workforce while fostering transparency, diversity and inclusion both within and outside our organisation continues to be a priority for us.

Processes:

In response to these challenges, we have set ESG processes that align with our commitment to sustainable shipping and fostering a culture of diversity and inclusion within our organization.

1. Emission Reduction: The Company is compliant with International Maritime Organization (IMO) -MARPOL Convention and has taken appropriate actions impacting Emissions, Ballast Water Treatment, Domestic discharges and Oil Pollution enabling us to contribute to global efforts to combat climate change and promote cleaner oceans.

2. Waste Management: Waste generated on board during normal operation of the ship is managed as per the vessel-specific garbage management plan and landed ashore at approved reception facilities for further processing. Also, the discharge of oil, solid waste & sewage etc. from its ships is prohibited under MARPOL (International Convention for the Prevention of Pollution from Ships). Most of our vessels comply with Green Passport or equivalent notation. In addition, the Company diligently adheres to the compliance requirements specified in the administration circular concerning the Transport and Handling of hazardous and noxious liquid substances in bulk on Indian-flagged offshore support vessels.

3. Workforce Development: Multiple training programs with a core focus on the principles of varied topics such as Leadership, Soft Skills, Health & Wellness, Industrial skills and Building Infrastructure for a Viksit Bharat were conducted for the workforce ensuring their professional growth and well-being while fostering a diverse and inclusive work culture. In addition to these, SCI employees participated iniGOT Karmayogi for trainings across multiple areas. All SCI employees have completed over 3229 Nos. of training programs.

4. CSR Initiatives: Our community engagement initiatives positively impacted the lives of multiple individuals and many families, focussing on education, healthcare and livelihood opportunities across diverse communities.

5. Vendor Selection: The Company sources vendors who are maintaining registration under local/regional laws, are complying with National and International applicable legislations, and are maintaining management systems under ISO 9001 and 14001 or any other equivalent systems wherever applicable. Additionally, suppliers are requested to be in accordance with SOLAS Chapter 11 1/ Reg 3 -5. Furthermore, the sellers are required to guarantee that no hazardous material identified under MEPC269 (68) and EUSRR has been used in the supplies, limited/reduced use of plastic for packing material and whenever possible assist the vessel in collecting back the packing material if the vessel so requests.

Flexibility in Placement: As an organization that values transparency and accountability, we have exercised our flexibility in placing this disclosure within the Annual Report. This ensures that stakeholders have easy access to crucial information about our sustainability efforts and responsible business practices.

Conclusion: At The Shipping Corporation of India Limited, sustainability is ingrained in our corporate ethos. We view ESG as a foundation for creating long-term value and positively impacting the world around us. Through collaboration and unwavering commitment, we remain steadfast in our pursuit of sustainable shipping solutions.

Directors' Responsibility Statement:

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that : a) Applicable standards have been followed in preparation of financial statements; b) The directors had 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 at the end of the financial year and of the profit and loss of the company for that period; c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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. e) The Company has an internal control system that is adequate and commensurate with the size, scale and complexity of its operations. Internal control framework and Risk Control Matrix (RCM) for various business processes is in place. The internal control systems (including Internal Financial Controls over Financial Reporting) are reviewed on an ongoing basis and necessary changes are carried out to align with the changing business / statutory requirements. Internal audit is carried out by an independent firm of Chartered Accountants / Cost and Management Accountants on concurrent basis. The scope and authority of the Internal Audit function is defined in the Internal Audit Plan, which is approved by the Audit Committee. To maintain its objectivity and independence, the Internal Audit function submits quarterly reports to the Audit Committee of the Board. The internal audit examines, evaluates and reports on the adequacy and effectiveness of the internal control systems in the company, its compliance with the laid down policies and procedures and ensure compliance with applicable laws and regulations. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are reviewed, deliberated and presented to the Audit Committee of the Board.

Explanation -For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information; 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.

General Disclosures: Your directors state that: a) There was no change in the nature of business of the company during the financial year ended 31st March 2026. b) During the year, the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code 2016, along with their status was 'NIL'.

Acknowledgements.

The Directors express their sincere gratitude for the continued guidance, encouragement and support received from the Government of India, especially the Ministry of Ports, Shipping and Waterways, as well as various State Governments, regulatory and statutory authorities.

Your Directors also wish to express their thanks to the officials in the Ministry of Ports, Shipping and Waterways for the unstinted support given by them in various matters concerning the Company. Your Directors would also like to convey their thanks to other Ministries, Trade Organizations, and Shippers' Councils, who have played a vital role in the continued success of your Company. The Directors thank the shareholders, other stakeholders and valued customers for the continued patronage extended by them to your Company. Last but not the least, your Directors wish to record their deep appreciation for the dedicated service of your Company's employees, both afloat and ashore, without whose co-operation and efforts the achievements made by your Company would not have been possible.