th Annual Report 2015 - 2016 The Shipping Corporation of ...€¦ · 66th Annual Report 2015 - 2016...

166th Annual Report 2015 - 2016 The Shipping Corporation of India Limited

CORPORATE INFORMATION 1

CHAIRMAN’S MESSAGE 2

VISION MISSION & OBJECTIVES 5

BOARD OF DIRECTORS 6

EXECUTIVE DIRECTORS AND SENIOR VICE PRESIDENTS 9

NOTICE OF MEETING 10

ANNEXURE TO THE NOTICE 13

SALIENT STATISTICS 16

DECADE AT A GLANCE 17

GRAPHS 18

DIRECTORS’ REPORT 20

FORM MGT - 9 EXTRACT OF ANNUAL RETURN 41

FORM AOC-1 STATEMENT PURSUANT TO ASSOCIATE COMPANIES & JOINT VENTURES 48

FORM AOC- 2 PARTICULARS OF CONTRACTS/ ARRANGEMENTS ENTERED INTO WITH RELATED PARTIES 49

FORM MR-3 SECRETARIAL AUDIT FOR YEAR ENDED 31ST MARCH, 2016 50

REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE 52

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE 62

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA 63

STANDALONE FINANCIAL STATEMENTS • INDEPENDENTAUDITORS’REPORT• ANNEXURESTOTHEINDEPENDENTAUDITORS’REPORT• STANDALONE BALANCESHEETASON31STMARCH2016• STANDALONESTATEMENTOFPROFIT&LOSSFORTHEYEARENDED31STMARCH2016• STANDALONECASHFLOWSTATEMENT• NOTESONFINANCIALSTATEMENTSFORTHEYEARENDED31STMARCH2016• SIGNIFICANTACCOUNTINGPOLICIES

65 67 75 76 77 79 102

CONSOLIDATED FINANCIAL STATEMENTS • INDEPENDENTAUDITORS’REPORT• ANNEXURESTOTHEINDEPENDENTAUDITORS’REPORT• CONSOLIDATEDBALANCESHEETASON31STMARCH2016• CONSOLIDATEDSTATEMENTOFPROFIT&LOSSFORTHEYEARENDED31STMARCH2016• CONSOLIDATEDCASHFLOWSTATEMENT• NOTESONCONSOLIDATEDFINANCIALSTATEMENTSFORTHEYEARENDED31STMARCH2016• SIGNIFICANTACCOUNTINGPOLICIES

105 107111112113115 138

GLOSSARY 141

IRQS CERTIFICATE OF APPROVAL 146

PROXY FORM 148


BOARD OF DIRECTORS

Capt.B.B. SinhaChairman&ManagingDirectorandDirector(P&A)

Shri Sanjeev RanjanGovernmentDirector

Shri Barun MitraGovernmentDirector

Shri Arun BalakrishnanDirector

Shri Sukamal Chandra BasuDirector

Capt. K. DevadasDirector

Smt. H.K. JoshiDirector

Shri S.V. KherDirector

Capt. S. NarulaDirector

Shri Dipankar Haldar ExecutiveDirector(LegalAffairs)&CompanySecretary

STATUTORY AUDITORS #Messrs.MKPS&Associates,Mumbai Messrs.GMJ&Co.,Mumbai##Messrs.G.D.Apte&Co.,Mumbai

SECRETARIAL AUDITOR ShriUpendraShukla,PracticingCompanySecretary

REGISTERED OFFICE ShippingHouse,245,MadameCamaRoad,Mumbai400021.

REGISTRAR & TRANSFER AGENTSM/s.BigshareServicesPvtLtdE-2,AnsaIndustrialEstate,SakiviharRoad,SakiNaka,Andheri(E),Mumbai–400072Email:[email protected]

#uptoFinancialYear2015-16##ForFinancialYear2016-17

CORPORATE INFORMATION

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Chairman’s MessageLadiesandGentlemen,Ihavegreatpleasuretoplacebeforeouresteemedshareholders,the66thAnnualReportoftheCompanyforthefinancialyear2015-16.ThesaidreportdescribesindetailtheworkingofyourCompanyforthefinancialyearended31stMarch2016.IwouldliketobrieflyappriseyouabouttheperformanceofyourCompanyduringtheaforesaidyear.Financials:It is amatter of pride to state that despite extremely challenging times and unfavourablemarket conditions,wereportedaconsolidatednetprofitofRs.389.4croresdespiteanimpairmentlossofRs.136croresfortheyearended31stMarch2016againstanetprofitofRs.200.93croresfortheyearended31stMarch2015.Thelossesduetounprecedenteddownturninthedrybulkmarketshavebeenpartiallyoffsetbytherallyinthetankermarkets.Whilethenetincomefromoperationshasalmostremainedflat,theappreciabledecreaseinvariousexpensesincludingbunkers,steadytankerfreightsandchangeindepreciationpolicyhavecontributedtothepositiveresults.Theoverallfinancialhealthofthecompanyhasimproved&ourborrowingsarereduced.Global Shipping Scenario:Shipping industry has alwaysbeen known to be cyclical however the prevailing downward cycle hasprolongedmakingittheworstshippingdownturnsinlivingmemory.Ithasbeeneightyearssincetheonsetofglobalfinancialcrisisandwearestillinsearchofasustainablegrowthpath.Thoughtheworldeconomygrew3.1%lastyear(asperIMF),butarobustandsustainedrecoverystillremainedelusive.Resultantlytheglobalshippingindustryisstillstrugglingtocomeoutofitsunprecedentedlongrecession.


Theshippingbusinesshasbeenavictimofexcesssupplyofshipshittingthemarket,puttingpressuresonfreightrates.Thedrybulkandcontainermarketshavebeentheworstaffected,withnosignsofrecoveryinthenearfuture.Ourindustryislargelydrivenbythemarketforcesi.e.supplyoftonnage&demandoftheworldtrade.Worldtradeisdominatedbythedevelopedandthedevelopingeconomies.HoweveraslowdowninChina’sgrowthandfallindemandinEurope&UShavecontributedtothesubduedbusinessenvironment.LeadingexportersRussiaandBrazilhavebeeninrecessionforoverayearnow.Recently,thefearofUK’sexitfromEurozonehasalsobeencausinganxietytotheworldtradeespeciallythefinancialmarkets. The UK’s imports account for an estimated 2% of global seaborne trade and its exports 1%. In fleetownershiportradeterms,theUKaloneisnotsosignificant(thoughtheEUasawholeisaccountingforanestimated16%ofseaborneimportsand12%ofexports.).Themoreimportantimpactmightbethewiderfalloutofuncertaintysurroundingthe‘Brexit’whichwillplayoutinthenextfewmonths.Operations:TheshalegasrevolutionintheNorthAmericancontinenthasdrasticallychangedthedynamicsofthecrudetankertrade.TheOPECcountrieshavemaintainedtheirproductionlevelsdespitethefallingcrudeoilprices,triggeringapricewarwithnon-OPECnations.Lowerworldcrudeoilpriceshavetranslatedtolowerbunkerpriceswhichhavein turn contributed to the reduction in direct operating expenses of ships. SCI’s fleet has also benefitted to thatextent.Iranisbackinbusinessandiscomingtothemarketisabigway.OilandpetrochemicalproductsconstituteamajorpartofIranianexportsandIndiaisoneofthemajorbuyersofIranianoil.On16thJanuary2016,EU&UNliftedsanctionsonIran,USalsoliftedthesecondarysanctionshowevertheprimaryUSsanctionsremaininplace.Afterliftingofsanctions,afteragapofalmostfouryears,SCIhasresumedshipmentofCrudeOilfromIran.SCI’sSuezmaxtankerMT‘Ankleshwar’loadedCrudeOilfromKhargIslandfordischargingatVisakhapatnam.ThevoyagewasperformedunderCOAwithM/s.HPCL.WealsohaveCOAswithM/s.BPCLandM/s.MRPLwhichwillrequireustoliftcrudefromIran.India’sappetiteforimportofcrudeiseverincreasing.BasedonEIAestimates,importssupplied75%oftheIndia’stotalliquidfuelsdemand,asIndia’stotalliquidfuelsconsumptionin2015.PresentlySCIcarriesabout50%ofIndiancrude importsby Indianfleet.SCIcarriesalmost100%ofcrudeoilon the Indiancoast forPSUrefinerieson itstankers.Thedrybulktradeduringthelastyearhasseenunprecedentedlowsbankruptingmanycompaniesinthedrybulkbusiness.TheBalticDryIndex(BDI)touchedanalltimelowof290on10thFebruary,2016andcontinuestohoverat700levels.At thisratetheowners/operatorsofdrybulkcarriersdonotrecovertheirdailystandingcharges.Presentlyaround14.2%ofworlddrybulkfleetisonorderwhichmakesarevivalinthedrybulkmarketinneartermverydifficult.HoweverduringthelastquarterofFY16scrappingofdrybulktonnagehastouchedanalltimehigh(14millionDWTscrappedinQ4FY16)whichmakestheoutlookrelativelypromisingasthetonnagegrowthwouldbearrested.Theglobaldrybulktradeisexpectedtogrowatanaverageofover2%duringthenext3-4years.Thiswillonlyaugmentthefreighttoopexlevelsindicatinganuninspiringmodestrecovery.Chinaisakeyplayerandmuchwilldependuponitsdomesticsteeldemandandproduction.IntheContainersegmentlosseshavebeenpilingupaslinerfreightshavedippedbeloweven2009globalfinancialcrisislevels.Theindustryisreelingundertheimpactoflargermegashipsenteringthemarketwithcascadingeffectsonfreightrateswhichareinafreefall.Howevernewbuildingordershavecometoavirtualstopwhichisarespitefornow.Thelinerbusinessissufferingfromnegativeoperatingresults.InthecurrentmarketaPanamaxsizevesselofapprox4300TEUhasnegativeearningsofaboutUSD2000perday.Linercompanieshavebeenreshufflingtheirpartnershipstoformglobalallianceswithanaimtoachievecostsavingsandenhanceprofitabilitythroughoperationalcollaborationandnetworkoptimization.Barringfewcompanies,theperformanceofthelinercompaniesduringthefiscalhasbeendismalprimarilydue to fastdeterioratingmarketconditionsand low load factors.SCI’s linerfleetthoughsmallhasnotbeenabletoshielditselffromsuchadverseconditions.

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Ship Acquisition Programme:SCIpridesinhavingadiversifiedfleetof69vesselsof5.89mnDWTwithanaverageageabout9years.Thepresentdownturn inworldshippinghasalsoresulted in thedecline in thepricesofcertainassetclassesespeciallyBulkCarriersandOffshoreassetswhichpresentsuswithanopportunitytostrategicallyplaceordersandincreaseourfleetsize.WiththeCAPEXplanforFY2016-17,SCIhasambitiousplanstoaugmentitstankerandoffshoretonnagethroughacquisitionofsecondhandvessels.Other Corporate Developments:Toremaininbusiness,organizationshavetoconstantlythinkofnewerideas.WehaverestructuredourSMILEservicesynergizingSCI’sserviceswithM/s.Shreyas’sservicestoseamlesslylinkthePersianGulfwithEastCoastofIndiaandWestCoastofIndia,thereby,furtherstrengtheningandexpandingSCI’spresenceintheCoastalShippingSector.WehavealsoresumedtheIndiaMyanmarLinerserviceandtalksareonforextendingtheservicetocertainSouthEastAsianPorts.IamalsohappytosharethatONGChasentrustedthemanagementofitsMODUs‘SagarVijay’&‘SagarBhushan’foraperiodofsixyears.IamalsohappytosharewithyouthatSCIhasbeenentrustedwiththetechnicalmanagementof17ForeshorevesselsbelongingtotheAndaman&NicobarAdministration.ThesevesselswillbemanagedfromourPortBlairOfficethustakingthetotalnumberofshipsbeingmanagedfromPortBlairto28.To take advantage of the increasing opportunities in Inland Waterways, SCI has signed an MOU with InlandWaterwaysAuthorityofIndiaduringtheMaritimeIndiaSummit2016andisintheprocessofformingawhollyownedsubsidiarytoundertake‘InIandWaterways’transportationonNationalWaterways-1,2&5.ThisnewcompanywillbeheadquarteredatKolkata.Way Forward:India’sGDPgrewby7.9%duringthelastquarterofFY2015-16aggregatingto7.6%growthforthewholeofFY2015-16. If the current rateof growth is sustained, India is projected to clock8%growth for FY2016-17, thusreinforcingitspositionasthefastestgrowingmajoreconomyaspredictedbytheWorldBank.However, the global shipping sector continues to sail in stormywaters and it is time that we explored hithertouncharteredwatersforoursurvival.Wehavealso increasedourattentiontothe‘InlandWaterways’and‘CoastalShipping’.Acknowledgements:IwouldliketoexpressmysinceregratitudetoShriNitinJ.Gadkari,UnionMinisterofShipping,GovernmentofIndia,forprovidingsupport to yourCompany. Iwouldalso like to thankShriPonRadhakrishnan,MinisterofState forShipping&ShriMansukhlalMandaviya,MinisterofStateforShippingforhisencouragement.IwishtoexpressmygratitudetoShriRajiveKumar,Secretary(Shipping)fortheguidanceprovidedbyhim.IsincerelyacknowledgethesupportofallotherofficialsoftheMinistryofShippingandvariousdepartmentsofGovernmentofIndia.IamthankfultoallmycolleaguesontheBoardwhosesupportandguidancehasassistedusincarryingouttheaffairsofyourCompanyamicablyandsmoothly.Ialsowishtoexpressmydeepsenseofgratitudetoallthestakeholders,shareholders,allemployees(shore&floating)fortheircontinuedsupportanddedication.Conclusion:Astheadagegoes,asmoothseanevermadeaskillfulsailor,yourCompanyhasalsolearntimmenselyduringthelastfewyearssurvivingthroughthetoughtimesandadversemarketconditions.Yourcompanyhasservedthenationforabout55yearsandcontinuestoremainfundamentallystrongandoperationallydynamicaspiringtoachievegreatersuccess.Iseekcontinuedsupportandpatronageofallstakeholdersinthecompany’seffortstomarchforwardwitharenewedvigour.

Captain B. B. Sinha Chairman & Managing Director

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Capt. B.B. Sinha, Chairman & Managing Director / Director (Personnel & Administration)

Capt.B.B.SinhahasbeenentrustedwiththeadditionalchargeofC&MDofSCIw.e.f.01.01.2016consequenttothesuperannuationofShriA.K.Gupta,Ex-CMD.Capt.B.B.SinhaistheDirectorofPersonnel&Administrationsince01.01.2013.Capt.Sinhahasservedaround38yearsatresponsibleexecutivelevelsinShippingIndustryconsistingof16yearsofseaserviceand22yearsofshoreserviceatSCI inshippingmanagement,bulkcarriers,tankers,chemicals,LPG&LNGoperations.Capt.SinhaisaDirectorofBaltic&InternationalMaritimeCouncil (BIMCO),DirectorofSteamshipMutualUnderwritingAssociation (Bermuda)LtdandaDirectorofIndianRegisterofShipping,.He isalsotheChairmanof theGoverningCouncilof theprestigiousNarottamMorarjeeInstituteofShipping(NMIS)atMumbai

Shri Sanjeev Ranjan, Government Director

ShriSanjeevRanjan,wasappointedexofficioparttimeDirectorontheBoardofDirectorsinSeptember2015.ShriSanjeevRanjanservesasAdditionalSecretaryandFinancialAdviserintheMinistryofShippingandisalsoontheBoardsofITDC,IPRCL,MPTandIWAI.

ShriRanjanspecializesininformationtechnology,energy,transport;infrastructuredevelopmentandfinanceandhasworkedintheseareasasManagingDirector,RoadTransportCorporation;PrincipalSecretary,DepartmentofPower;Secretary,BorderRoadsDevelopmentBoardandJointSecretary(Borderinfrastructure),MinistryofDefence.HealsohasbeenaDirectorontheBoardsofNEEPCO,OTPC,NEPTC,MECL,CCIandtheNDDB.

ShriRanjanisaBTech(ElectricalEngineering)fromIITKanpur;MBA(Finance),FMSDelhi;MPhil(Economics),Glasgow;MPhil(StrategicStudies);MPM,NUSSingaporeandPhDwiththesisonICTuseandfirmefficiencyfromIITDelhi.HeisanalumnusoftheNationalDefenceCollegeandwasaLeeKuanYewFellowattheHarvardUniversity.

Shri Barun Mitra, Government Director

ShriBarunMitra,JointSecretary(Shipping)MinistryofShippingandex-officiopart-timeDirectorofthecompanywasappointedontheBoardofDirectorsinJanuary2015.ShriBarunMitra,anIASOfficerfromManipurcadreof1987batchisapostgraduateinHistoryfromDelhiUniversity.ShriMitraalsoholdsalawdegreefromDelhiUniversitybesidesholdingaPostgraduateDiplomainPatentsLaw,TrademarkandCopyrightsfromNALSAR,Hyderabad.Before joining IAS,ShriMitrawas in the IRS.Hehasserved invariousseniorpositions in theStateGovernmentofManipurincludingPrincipalSecretaryintheDepartmentsofFinance,PlanningandRuralDevelopment,GovernmentofManipurandalsoservedasPrincipalSecretarytoChiefMinisterfrom2012-14.ShriMitrahasalsoservedearlierintheGovernmentofIndiaonCentraldeputationasDeputySecretaryintheMinistryofHumanResourceDevelopment.HealsoservedinthePresident’sSecretariatfrom1998to2012

includingasJointSecretarytothePresidentfrom2007to2012.

Shri Arun Balakrishnan

ShriArunBalakrishnansuperannuatedasChairman&ManagingDirectorofHindustanPetroleumCorporationLtd(HPCL),aFortune500Company,in2010afterhavingjoinedthecompanyasaManagementTraineein1976.

AChemicalEngineer,withaPostGraduateDiplomainManagementfromtheIndianInstituteofManagement,Bangalore,hehasheldfunctionssuchasMarketing,Operations, Import-Export,HumanResources,etc.atHPCL.HeisalsotheFounderChairmanofHPCL-MittalEnergyLtd.(HMEL),aJointVentureCompanyofHPCLandL.N.MittalInvestments,andiscurrentlyanIndependentDirectoroftheBoard.

Additionally,ShriBalakrishnanisNonExecutiveIndependentDirectorontheBoardsofanumberofprestigiouscompaniesintheOil&Gas,Power,RealEstate,Space,Trading,CommoditiesExchange,etc.Heistherecipientof“TheDistinguishedAlumniAward2008”fromhisalmamater,theIndianInstituteofManagement,Bangaloreamongstothers.

BOARD OF DIRECTORS


Shri Sukamal Chandra Basu

ShriSukamalChandraBasuwastheChairmanandManagingDirectorofBankofMaharashtrafromtheyear2000to2006.HehasrichcorporateexperiencewithPriceWaterhouse,UnitedBankofIndia,BankofBarodaandBankofMaharashtra.HewastheDirectoronBoardofEXIMBank,ChairmanofAuditCommitteeofEXIMBank,GoverningCouncilmemberoftheBoardofNationalInstituteofBankManagement,ExecutiveCouncilMemberofMaharashtraChamberofCommerce,Pune,Dy.ChairmanofIndianBanks’Association,PermanentMemberofFICCIArbitrationBoard(Domestic&International)andEx-InviteeMemberofPeerReviewBoardofICAI.

ShriBasuhasbeenaguestfacultytoNationalInstituteofBankManagement,Puneandvariousmanagementinstitutes.HeiscurrentlyaMemberoftheBoardofapharmaceuticalorganization.

Shri Shrikant V. Kher

ShriShrikantV.KherhastakenoverasDirectorofBulkCarriersandTankersfrom1stOctober2015uponsuperannuationofCaptSunilThaparon30thSeptember2015.

ShriKherjoinedtheShippingCorporationin1985asaManagementTraineeandhasservedinvariousDivisionsoftheCorporation.HeisaholderofMBAinMarketingandhascompletedhisM.Sc(ShippingManagement)fromtheWorldMaritimeUniversity,MalmoSweden.

ShriKherhasvastexperience inOffShoreServices,BusinessDevelopmentandCommercialoperationsofBulkCarriers&LNGTankers.Hehasbeenclosely involved in theLNGprojectdevelopmentactivities frominceptionandformationofthejointventures.WithMr.Kher’sexpertiseinprojectdevelopment,SCIwillmake

itspresencefeltinnichemarkets.

Capt. K. Devadas, Director

Capt. K.Devadas has rendered four decades of dedicated services to SCI. The experiences gathered byhimatseafrom1976onwardsonboardSCIships,groomedhimtocarryforwardtherealtimeexposure&experiencesatsea,ashegotabsorbedashoreinSCIfrom1993onwards.

His journey ashorewas initially in BulkCarrier& TankerDivision and later hewas elevated to takewiderresponsibilities in theOffshoreDepartment in2005.Thisgavehimanopportunity to excel inOil andgassegment. This stint continued and thereafter, he assumed the chargeofDirector (Technical andOffshoreServicesDivision) in2014.This segment under his leadershiphasbeena steadycontributor towards thegrowthoftheorganization.

Capt.K.DevadasisaMasterMarinerandafellowoftheCompanyofMasterMarinersofIndia.HeholdsanMBAdegreeinShippingandLogisticsmanagementandisamemberoftheInstituteofCharteredShipbrokers,London.HeisamemberinthetechnicalcommitteesoftheprominentclassificationsocietiesofIACS.HehasexcelledinvariousIndianandglobalshippingconferencesandseminarsasaspeakerandapanelist.

Smt. H.K. Joshi, Director

Smt.H.K.JoshijoinedSCIasDirector(Finance)on5thFebruary,2015.PriortoassumingchargeoftheofficeofDirector(Finance)inSCI,shewasGeneralManager(F&A)inOilandNaturalGasCorporationLtd.(ONGC),MumbaiintheOffshoreEngineeringServiceswhereinlargeMegaOffshoreConstructionProjectsarehandled.ShehasashadeoverthreedecadesofrichanddiversifiedexperiencewithONGCwhichincludesalmosttwodecadeswithONGCVideshLimited(OVL–overseasarmofONGC)whichlooksaftertheinternationalbusinessacquisitionsofONGCwhereinshewasactivelyassociatedwiththepathbreakinginternationaltransactionswhichledthecompany(OVL)toturnaround.ShestartedhercareerasaLecturerinDelhiUniversityandjoinedthecorporateworldin1984.

SheisaFellowMemberoftheInstituteofCostManagementAccountantsofIndiawithaB.Com,M.ComfromDelhiSchoolofEconomics,DelhiUniversity.ShewasarankholderinherpostgraduationandisalsoalifememberoftheInstituteofPublicAdministration,Delhi.

Shehasbeentherecipientof“TheMostInfluentialCFOsofIndiaAward”fromCharteredInstituteofManagementAccounts,UKfortwosuccessiveyears,2015and2016.Shehasalsobeenawardedwith“TheTenth IndiaCFOAwards–Excellence inFinance toenableaTurnaround”hostedbyInternationalMarketAssessmentIndiaPrivateLimitedinproudassociationwithPierianServicesinMay2016.InJuly2015,shewashonouredwith“CMACFOAward2014”fromTheInstituteofCostAccountantsofIndia.

ShebelievesinteamworkandhasreceivedvariousgroupawardsinherpreviousassignmentswithONGC.

BOARD OF DIRECTORS

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Capt Sarveen Narula, Director

Capt.S.NarulawasinductedonBoardinJuly2014.HehastakenthechargeofLinerandPassengerServicesofTheShippingCorporationofIndiaLimited(SCI)from01May2014.Capt.SarveenNarulahasmorethan36yearsofMaritimeExperiencebothafloatandashore.Hehashadmorethan7yearscommandexperienceonseveraltypeofshipsincludingTankers,BulkCarriers,CargoshipsandContainerships.HehasextensiveshoreexperienceinvariousaspectsofLinerandPassengerserviceswhichincludesportanddockoperations,LineOperationsandManagement,consortiumformations,Hazardouscargoandbreakbulkshipments,Safetyand QualityManagement , Coastal Shipping , Cargo claims and claimMinimization. He has also chairedor participated in several workshops/ conferences on coastal shipping, port development, freighting andcommercialaspectsoflinertrade.PriorappointmentasDirector,CaptSNarulawasworkingasSeniorVice

PresidentinchargeofContainerServices,MarketingandBreakBulkservices.

BOARD OF DIRECTORS


S. No NAME Title DES LOCATION DIVN. SUB DIV

1 DIPANKARHALDAR Mr. ED MUM BRDSECTT ED(LA)&CS

2 JEJURIKARUSHAD. Ms. Sr.VP MUM T&OS BPC

3 SARAIYANAISHADR. Mr. Sr.VP MUM F&A IA&FSAccount

4 MANDALSHILADITYA Mr. Sr.VP KOL KOL RSVPKol

5 SADAWARTISHANKARG. Mr. Sr.VP MUM IT ERP

6 MAJISWAPANK. Mr. Sr.VP MUM L&PS Freight&PortOperation

7 MITRAPRANABK. Mr. Sr.VP MUM B&T BC-Comm

8 DHINGRASURJITS. Dr. Sr.VP MUM L&PS FE-C

9 MESHRAMBALAV. Mr. Sr.VP KOL KOL PortBlair

10 BORKARMAIRER. Capt. Sr.VP MUM B&T TankerTechnical

11 BARAIASHOKEK. Mr. Sr.VP MUM B&T RBC/DD/PEC

12 MATHEWSPHILIP Capt. Sr.VP MUM ISM&ISPS ISM&ISPS

13 PATELASHWINV. Mr. Sr.VP MUM F&A Bills&Tax

14 UBALEATULL. Mr. Sr.VP MUM B&T TC-CR-CH

15 SRIVASTAVACHANDRAM. Capt. Sr.VP MUM P&A FP

16 YADAVSURENDRAK. Capt. Sr.VP MUM L&PS L&PS-Operations

17 SOODRAJESH Mr. Sr.VP MUM B&T B&T-BulkCarrierTechnical

18 SHARMASANGEETAA. Ms. Sr.VP MUM B&T TC-PR

19 SUNDERAJANSUMATHI Ms. Sr.VP MUM F&A Finance&Treasury

20 S.SASIKUMAR Mr. Sr.VP MUM T&OS TechnicalFleetServices

EXECUTIVE DIRECTORS AND SENIOR VICE PRESIDENTS

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NOTICE is hereby given that the 66th Annual GeneralMeetingofTheShippingCorporationofIndiaLtd.willbeheldattheRegisteredOfficeoftheCompanyat“ShippingHouse”, 245, Madame Cama Road, Nariman Point,Mumbai–400021at1530hrs.onMonday,the26thdayofSeptember2016totransactthefollowingas:

ORDINARY BUSINESS

1. To receive, consider and adopt the Standalone andConsolidatedFinancialStatementsason31.03.2016andReportsofAuditorsandDirectorsthereon.

2. To appoint a Director in place of Capt. K.Devadas(DIN: 06887951) who retires at this meeting andbeingeligible,offershimselfforre-appointment.

3. ToappointaDirectorinplaceofSmtH.K.Joshi(DIN:07085755) who retires at this meeting and beingeligible,offersherselfforre-appointment.

4. Tofixremunerationofauditors.

SPECIAL BUSINESS BY ORDINARY RESOLUTION

5. To appoint a Director in place Shri S V Kher(DIN:7286348)whounderArticle125oftheArticlesof Association of the Company and Section 161 oftheCompaniesAct,2013holdsofficeonlyupto thedateofthisAnnualGeneralMeetingandbeingeligibleforappointment,theCompanyhasreceivedanoticein writing from his goodself signifying his intentiontoproposeappointmentofhimselfasDirectoroftheCompany.

“RESOLVEDTHATShriSVKher(DIN:7286348), inrespectofwhomtheCompanyhasreceivedanoticeinwritingunderSection160of theCompaniesAct,2013fromhimselfproposinghiscandidatureforthe

NOTICE OF MEETINGoffice of Director, be and is hereby appointed as aDirectoroftheCompany.”

6. ToappointaDirectorinplaceofShriArunBalakrishnan(DIN:00130241)whounderArticle125oftheArticlesof Association of the Company and Section 161 oftheCompaniesAct,2013holdsofficeonlyupto thedateofthisAnnualGeneralMeetingandbeingeligibleforappointment,theCompanyhasreceivedanoticein writing from his goodself signifying his intentiontoproposeappointmentofhimselfasDirectoroftheCompany.

“RESOLVED THAT Shri Arun Balakrishnan (DIN:00130241), in respect of whom the Company hasreceivedanoticeinwritingunderSection160oftheCompanies Act, 2013 from himself proposing hiscandidaturefortheofficeofDirector,beandisherebyappointedasaDirectoroftheCompany.”

7. ToappointaDirectorinplaceofShriSukamalChandraBasu (DIN: 1735626)who underArticle 125 of theArticlesofAssociationof theCompanyandSection161 of the Companies Act, 2013 holds office onlyuptothedateofthisAnnualGeneralMeetingandbeingeligible for appointment, the Company has receiveda notice in writing from his goodself signifying hisintention to propose appointment of himself asDirectoroftheCompany.

“RESOLVEDTHATShriSukamalChandraBasu(DIN:1735626), in respect of whom the Company hasreceivedanoticeinwritingunderSection160oftheCompanies Act, 2013 from himself proposing hiscandidaturefortheofficeofDirector,beandisherebyappointedasaDirectoroftheCompany.”

Registered Office:ShippingHouse,245,MadameCamaRoad,Mumbai–400021Dated:18thAugust,2016

By Order of the Board of DirectorsforTheShippingCorporationofIndiaLtd.Dipankar HaldarExecutive Director (Legal Affairs) & Company Secretary


NOTICE OF MEETINGNotes:

a) An Explanatory Statement pursuant to Section 102 of theCompanies Act, 2013 relating to Special Business to betransactedattheAnnualGeneralMeetingisannexedhereto.

b) AMEMBERENTITLEDTOATTENDANDVOTEISENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEINSTEADOFHIMSELFANDAPROXYNEEDNOTBEAMEMBEROFTHECOMPANY.THEPROXYFORMDULYCOMPLETEDANDSIGNEDMUSTBEDEPOSITED AT THE REGISTERED OFFICE OF THE COMPANYNOTLESSTHAN48HOURSBEFORETHEMEETING.

c) Members /Proxies/ authorized representativesshouldbring thedulyfilledattendanceSlipenclosedherewithalongwiththecopyofAnnualReporttoattendthemeeting.

d) TheRegisterofMembersand theShareTransferBooksof theCompanywillremainclosedfrom20.09.2016to26.09.2016.

e) Members are requested to notify any change in their addressto theShare Transfer Agents of theCompany at the followingaddress:

M/s. Bigshare Services Pvt LtdE-2,AnsaIndustrialEstate,SakiviharRoad,SakiNaka,Andheri(E),Mumbai–400072Email:[email protected]

Telephone:02240430200

f) Pursuant to the provisions of Sections 124 and 125 of theCompanies Act, 2013, the amount of dividendwhich remainsunpaid / unclaimed for a period of 7 years is required to betransferred to the “Investor Education and Protection Fund(IEPF)”, constitutedby theCentralGovernmentandafter suchtransfer,themember(s)wouldnotbeabletoclaimanydividendsotransferredtotheFund.Therefore,member(s)whohavenotyetencashedhis/her/theirdividendwarrant(s)is/arerequestedinhis/her/theirowninteresttowritetotheCompanySecretaryimmediately for claiming outstanding dividend declared by theCompany for the year 2008-2009 and onward. The investormay also visit www.shipindia.com. The dividend paid for theyear2007-2008(Final)andremainingunclaimed/unpaidhasalreadybeentransferredtotheIEPF.

g) Members who have not registered their e-mail ID with Depository Participants / Registrar & Share Transfer Agents, are requested to do so, in order to receive notices, reports and other documents in soft form.

h) The Registers of the Directors and Key Managerial PersonnelandtheirshareholdingunderSection170oftheCompaniesAct,2013, will be available for inspection by the members at theAnnualGeneralMeeting.

i) Pursuant to provisions of Section 108 of the CompaniesAct,2013andRule20oftheCompanies(Managementand

Administration)Rules,2014asamendedandRegulation44ofSEBI(LODR)Regulations,2015theCompanyispleasedtoprovideitsMembersthefacilityofremoteelectronicvotingto cast their votes for the resolutions to be passed at themeeting through services provided by Central DepositoryServices (India) Limited (CDSL). The members may casttheir votes on electronic voting system froma placeotherthanthevenueofthemeeting(remotee-voting).

j) Thefacilityforvotingthroughpollshallbemadeavailableatthemeeting to theMemberswhohavenotcast theirvote throughremotee-votingandshallbeeligibletovoteattheAnnualGeneralMeeting.

k) The Board of Directors of the Company has appointed Mr.Upendra Shukla, Practicing Company Secretary to act as aScrutinizer,toscrutinizetheremotee-votingprocessandthepolltobeconductedatthemeetinginafairandtransparentmanner.

l) TheScrutinizer,afterscrutinizingthevotescastat themeeting(throughpoll) and through remotee-voting,will, not later thanthreedaysof conclusionof themeeting,makeaconsolidatedscrutinizers report and submit it to the Chairman. The resultsdeclaredalongwith theScrutinizersReportshallbeplacedonthe website of the Company www.shipindia.com. The resultsshallbesimultaneouslycommunicatedtotheStockExchanges.

The instructions for shareholders voting electronically are as under:

(i) Thevotingperiodbeginson23.09.2016at9AMandendson25.09.2016at5PM.During thisperiodshareholdersofthe Company, holding shares either in physical form or indematerializedform,asonthecut-offdate(recorddate)of19.09.2016maycast theirvoteelectronically.Thee-votingmoduleshallbedisabledbyCDSLforvotingthereafter.

(ii) The shareholders should log on to the e-voting websitewww.evotingindia.com

(iii) ClickonShareholders.

(iv) NowEnteryourUserID

a. ForCDSL:16digitsbeneficiaryID,

b. ForNSDL:8CharacterDPIDfollowedby8DigitsClientID,

c. Membersholdingshares inPhysicalFormshouldenterFolioNumberregisteredwiththeCompany.

(v) Nextenter the ImageVerificationasdisplayedandClickonLogin.

(vi) Ifyouareholdingsharesindematformandhadloggedontowww.evotingindia.comandvotedonanearliervotingofanycompany,thenyourexistingpasswordistobeused.

12

(vii) Ifyouareafirsttimeuserfollowthestepsgivenbelow:

For Members holding shares in Demat Form and Physical Form

PAN Enteryour10digitalpha-numericPANissuedbyIncomeTaxDepartment(Applicableforbothdematshareholdersaswellasphysicalshareholders)• MemberswhohavenotupdatedtheirPANwiththeCompany/DepositoryParticipantarerequestedtousethefirsttwolettersoftheirnameandthe8digitsofthesequencenumber(referserialno.printedonthename&addresssticker/attendanceslip/email/postalballotform)inthePANfield.

• Incasethesequencenumberislessthan8digitsentertheapplicablenumberof0’sbeforethenumberafterthefirsttwocharactersofthenameinCAPITALletters.Eg.IfyournameisRameshKumarwithsequencenumber1thenenterRA00000001inthePANfield.

DividendBankDetailsORDateofBirth(DOB)

EntertheDividendBankDetailsorDateofBirth(indd/mm/yyyyformat)asrecordedinyourdemataccountorinthecompanyrecordsinordertologin.• Ifboththedetailsarenotrecordedwiththedepositoryorcompanypleaseenterthememberid/folionumberintheDividendBankdetailsfieldasmentionedininstruction(iv).

(viii) Afterenteringthesedetailsappropriately,clickon“SUBMIT”tab.

(ix) Membersholdingshares inphysical formwill thendirectlyreach the Company selection screen. However, membersholding shares in demat form will now reach ‘PasswordCreation’menuwhereintheyarerequiredtomandatorilyentertheirloginpasswordinthenewpasswordfield.Kindlynotethatthispasswordistobealsousedbythedematholdersforvotingforresolutionsofanyothercompanyonwhichtheyareeligibletovote,providedthatcompanyoptsfore-votingthroughCDSLplatform. It is strongly recommendednot toshareyourpasswordwithanyotherpersonandtakeutmostcaretokeepyourpasswordconfidential.

(x) ForMembersholdingsharesinphysicalform,thedetailscanbeusedonlyfore-votingontheresolutionscontainedinthisNotice.

(xi) ClickontheEVSNforTheShippingCorporationofIndiaLtdonwhichyouchoosetovote.

(xii) Onthevotingpage,youwillsee“RESOLUTIONDESCRIPTION”andagainstthesametheoption“YES/NO”forvoting.SelecttheoptionYESorNOasdesired.TheoptionYESimpliesthatyouassenttotheResolutionandoptionNOimpliesthatyoudissenttotheResolution.

(xiii) Clickonthe“RESOLUTIONSFILELINK”ifyouwishtoviewtheentireResolutiondetails.

(xiv) Afterselecting the resolutionyouhavedecided tovoteon,clickon“SUBMIT”.Aconfirmationboxwillbedisplayed.Ifyouwishtoconfirmyourvote,clickon“OK”,elsetochangeyourvote,clickon“CANCEL”andaccordinglymodifyyourvote.

(xv) Onceyou“CONFIRM”yourvoteon theresolution,youwillnotbeallowedtomodifyyourvote.

(xvi) You can also take a print of the votes cast by clicking on“Clickheretoprint”optionontheVotingpage.

(xvii) IfademataccountholderhasforgottentheloginpasswordthenEnter theUser IDand the imageverificationcodeandclickonForgotPassword&enterthedetailsaspromptedbythesystem.

(xviii) ShareholderscanalsocasttheirvoteusingCDSL’smobileappm-Votingavailableforandroidbasedmobiles.Them-Votingappcanbedownloaded fromGooglePlayStore,WindowsandApplesmartphones.Please follow the instructionsaspromptedbythemobileappwhilevotingonyourmobile.

(xix) Note for Non – Individual Shareholders and Custodians• Non-Individual shareholders (i.e. other than Individuals,HUF,NRI etc.) andCustodian are required to logon towww.evotingindia.com and register themselves asCorporates.

• A scanned copy of the Registration Form bearingthe stamp and sign of the entity should be emailed [email protected].

• AfterreceivingthelogindetailsaComplianceUsershouldbe created using the admin login and password. TheComplianceUserwouldbeabletolinktheaccount(s)forwhichtheywishtovoteon.

• Thelistofaccountslinkedintheloginshouldbemailedtohelpdesk.evoting@cdslindia.comandonapprovaloftheaccountstheywouldbeabletocasttheirvote.

• Ascannedcopyof theBoardResolutionandPowerofAttorney(POA)whichtheyhaveissuedinfavouroftheCustodian,ifany,shouldbeuploadedinPDFformatinthesystemforthescrutinizertoverifythesame.

(xx) In case you have any queries or issues regardinge-voting, you may refer the Frequently AskedQuestions (“FAQs”) and e-voting manual available at www.evotingindia.com,[email protected].

.

NOTICE OF MEETING


ANNEXURE TO THE NOTICEEXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013The followingexplanatorystatementsetsoutall thematerial factsrelating to special businessmentionedat ItemNo.5 , ItemNo.6andItemNo7oftheaccompanyingNoticedated18thAugust,2016.conveningthe66thAnnualGeneralMeetingoftheCompany.Item No. 5 of the NoticeTheBoardofDirectorsoftheCompanyappointed,pursuanttotheprovisionsofSection161(1)oftheActandArticle125oftheArticlesof Association of the Company, Shri S V Kher as an AdditionalDirectoroftheCompanywitheffectfrom01.10.2015.In termsof theprovisionsofSection161(1)of theAct,ShriKherwould hold office upto the date of the ensuing Annual GeneralMeeting.TheCompanyhasreceivedanoticeinwritingfromhisgoodselfalongwith thedepositof requisiteamountundersection160of theActproposinghiscandidaturefortheofficeofDirectoroftheCompany.A brief profile of Shri Kher is given under the section ‘Board ofDirectors’oftheAnnualReport.Save and except of the above, none of the other Directors/ KeyManagerialPersonnelof theoftheCompany/theirrelativesare, inanyway, concerned or interested, financially or otherwise, in thisresolution.Item No. 6 of the NoticePursuanttoletterdated21.03.2016fromtheMinistryofShipping,the Board of Directors of the Company appointed, under Section161(1)oftheActandArticle125oftheArticlesofAssociationoftheCompany,ShriArunBalakrishnanasanAdditionalDirectoroftheCompanywitheffectfrom30.03.2016In terms of the provisions of Section 161(1) of the Act, ShriBalakrishnanwouldholdofficeuptothedateoftheensuingAnnualGeneralMeeting.TheCompanyhasreceivedanoticeinwritingfromhisgoodselfalongwith the deposit of requisite amount under Section 160 of the ActproposinghiscandidatureasDirectoroftheCompany.AbriefprofileofShriBalakrishnanisgivenunderthesection‘BoardofDirectors’oftheAnnualReport.Save and except the above, none of the other Directors / KeyManagerialPersonneloftheCompany/theirrelativesare,inanyway,concernedorinterested,financiallyorotherwise,inthisresolution.Item No. 7 of the NoticePursuanttoletterdated21.03.2016fromtheMinistryofShipping,The Board of Directors of the Company appointed, under Section161(1)oftheActandArticle125oftheArticlesofAssociationoftheCompany,ShriSukamalChandraBasuasanAdditionalDirectoroftheCompanywitheffectfrom26.05.2016.In termsof theprovisionsofSection161(1)of theAct,ShriBasuwould hold office upto the date of the ensuing Annual GeneralMeeting.The Company has received a notice in writing from his goodselfalongwiththedepositofrequisiteamountunderSection160ofthe

ActproposinghiscandidatureasDirectoroftheCompany.AbriefprofileofShriBasu isgivenatunder thesection ‘BoardofDirectors’oftheAnnualReport.Save and except the above, none of the other Directors / KeyManagerialPersonneloftheCompany/theirrelativesare,inanyway,concernedorinterested,financiallyorotherwise,inthisresolution.

Registered Office:ShippingHouse,245,MadameCamaRoad,Mumbai–400021.Dated:18thAugust,2016

Dipankar HaldarExecutive Director (Legal Affairs) & Company Secretary

ROUTE MAP OF AGM

14

DETAILS OF THE DIRECTORS SEEKING RE-APPOINTMENT / APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING

Name of Directors Capt.KelathDevadas Smt.H.K.JoshiDate of Birth 10.02.1957 15.05.1962Date of Appointment 26.09.2014 05.02.2015Qualifications • MasterMariner

• Master(FG)• MBA(Shipping&LogisticManagement)

• B.Com• M.Com• FellowmemberofInstituteofCostManagementAccountantsofIndia

Expertise in Specific functional areas More than 38 years experience in theShipping industry, Bulk and Tanker andOff-shoredivisions.

Over31yearsof richexposure inhandlingall facetsof Finance&Accounts in theOilsectorandinJointVentureassignments

Directorship held in other public companies (excluding Foreign ,Private and Section 8 companies)

NIL NIL

Membership/Chairmanships of committees of other public companies (Includes only Audit Committee and Stakeholders Relationship Committee )

NIL NIL

Number of shares held in SCI NIL NILNumber of Board Meetings Attended PleasereferCorporateGovernanceReportRelationships between directors inter-se NIL

Name of Directors ShriSVKher ShriArunBalakrishnanDate of Birth 23.09.1959 25.07.1950Date of Appointment 01.10.2015 30.03.2016Qualifications • MBA(Marketing)

• M.Sc.(ShippingManagement)fromWorldMaritimeuniversity,Malmo(Sweden)

• B.E.(Chemical)• PGDiplomainManagement(IIM–Bangalore)

Expertise in Specific functional areas More than 31 years of experience invarious facets of shipping industryespeciallyoffshore,bulkcarriersandLNGtankers, including business developmentandcommercialoperationsofthesame.

Around40yearsofexperienceinOil&Gasindustryandalliedsectors


NIL 1. HPCL-MittalEnergyLtd.2. NCDEX-EMarketsLtd.3. MahanagarGasLtd.4. LindeIndiaLtd.5. JaypeeInfratechLtd.6. AntrixCorporationLtd.7. HPCL-MittalPipeLinesLtd.8. JaiprakashPowerVenturesLtd.


NIL Audit Committee Memberships1. MahanagarGasLtd2. LindeIndiaLtd.Audit Committee Chairmanships1. HPCL-MittalEnergyLtd.2. NCDEX-EMarketsLtd.3. HPCL-MittalPipeLinesLtd.

Number of shares held in SCI NIL NIL

Number of Board Meetings Attended PleasereferCorporateGovernanceReport

Relationships between directors inter-se NIL

ANNEXURE TO THE NOTICE


Name of Director ShriSukamalChandraBasu

Date of Birth 15.12.1946

Date of Appointment 26.05.2016

Qualifications • MCom• LLB• FellowMemberofInstituteofCharteredAccountantsofIndia

Expertise in Specific functional areas Around 40 years of Experience in various sectors of bankingindustry.


EastIndiaPharmaceuticalWorksLimited.


Audit Committee MembershipEastIndiaPharmaceuticalWorksLimited.

Number of shares held in SCI NIL

Number of Board Meetings Attended PleasereferCorporateGovernanceReport

Relationships between directors inter-se NIL

ANNEXURE TO THE NOTICE

16

Authorised Capital `1000.00Crores

Subscribed and Paid- up Capital `465.80Crores

Depreciation Provision `579.95Crores

Gross Earnings `4277.19Crores

Gross Investment on Fleet `17977.62Crores

No. of Passengers carried (including managed vessels) 277614

No. of Employees (including crew) (As on 1st July,2016) 2315

Vessels Owned (As on1st July, 2016)

• Number 69

• Tonnage5.89millionDWT

3.29millionGT

Vessels on Order (As on 1st July , 2016) NIL

SALIENT STATISTICS 2015-16


OPERATIONAL STATISTICS(FiguresinCroresof`)

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

OperatingEarnings 3703.4 3726.9 4166.6 3463.1 3543.4 3820.8 4152.5 4155.2 4153.8 4078.3

InterestIncome 219.7 227.7 272.7 218.2 191.4 183.4 107.3 103.3 145.9 113.2

OtherIncome 287.2 129.8 125.2 215.0 285.0 495.9 236.4 280.5 288.0 85.7

TotalEarnings 4210.3 4084.4 4564.5 3896.3 4019.8 4500.1 4496.2 4539.0 4587.6 4277.2

OperatingExpenses 2567.7 2594.4 2815.7 2771.0 2254.5 3328.4 3273.7 3112.3 2794.2 2339.6

OtherExpenses 149.4 221.3 266.5 216.7 576.7 515.7 668.4 585.6 567.8 636.9

InterestExpenses 80.1 61.6 64.7 52.5 66.9 387.3 161.8 206.1 179.3 160.6

Depreciation 303.1 303.2 323.9 380.1 465.1 608.7 760.5 856.4 770.2 580.0

Impairment - - - - - - - - - 136.4

Exceptionalitems - - 39.1 - - - - - - -

Extraordinaryitems - - - - - - (299.7) - - -

TaxLiability 95.5 90.0 113.9 99.1 89.3 88.2 45.8 53.3 75.2 46.5

DefferedTaxProvisionwrittenback - - - - - - - - - -

TotalExpenses 3195.8 3270.5 3623.8 3519.4 3452.5 4928.3 4610.5 4813.7 4386.7 3899.9

ProfitafterTax 1014.5 813.9 940.7 376.9 567.3 (428.2) (114.3) (274.7) 200.9 377.3

FINANCIAL HIGHLIGHTS:(FiguresinCroresof`)

31-03-07 31-03-08 31-03-09 31-03-10 31-03-11* 31-03-12 31-03-13 31-03-14 31-03-15 31-03-16

WHAT THE COMPANY OWED

FixedAssets

GrossBlock 6705.4 6737.1 8161.9 8893.2 11841.3 13334.4 16556.8 17486.3 17,297.9 18,154.4

Less:Depreciation(Cum)&Impairment 3744.2 4047.2 4333.9 4386.4 4472.1 4421.6 5017.0 5551.6 5,853.4 6,551.0

NetBlock 2961.2 2689.9 3828.0 4506.8 7369.2 8912.8 11540.3 11934.7 11,444.5 11,603.4

AssetsunderConstruction 762.5 2007.2 2099.9 1854.7 1790.4 1833.3 1572.5 710.9 490.9 -

WorkingCapital 2596.7 2347.7 2640.9 2505.7 2431.0 2036.6 1550.1 1837.6 1,341.3 1139.6

Investments 24.0 41.5 111.5 166.7 292.7 274.6 117.7 113.5 90.1 65.3

6344.4 7086.3 8,680.3 9033.9 11883.3 13057.3 14780.6 14,596.7 13,366.8 12,808.3

WHAT THE COMPANY OWED

BankLoans 1244.7 1454.2 2471.7 2696.9 4715.2 6323.0 7707.4 8000.5 6,833.2 5897.9

UnsecuredLoans - - - - - - 457.0 256.4 -

1244.7 1454.2 2471.7 2696.9 4715.2 6323.0 8164.4 8256.9 6,833.2 5,897.9

DeferredTaxLiability - - - - - - - - -

NET WORTH OF THE COMPANY

ShareCapital 282.3 282.3 423.5 423.5 465.8 465.8 465.8 465.8 465.8 465.8

Reserves&Surplus 4817.4 5349.8 5785.0 5913.5 6702.3 6268.5 6150.4 5874.0 6,067.8 6444.6

DeferredRevenueExpenditure - - - - - - - - -

5099.7 5632.1 6208.5 6337.0 7168.1 6734.3 6616.2 6339.8 6,533.6 6,910.4

Dividendpaid 239.9 239.9 275.2 211.7 256.2 - - - - -

Dividend% 85.0 85.0 65.0 50.0 55.0 - - - - -

DECADE AT GLANCE

18

GRAPHS


GRAPHS

20

DIRECTORS’ REPORTTo the Members,YourDirectorshavepleasureinpresentingthe66thAnnualReportontheworkingofyourCompanyforthefinancialyearended31stMarch,2016.Accounting YearTheyearunderreportcoversaperiodof12monthsendedon31stMarch,2016.FINANCIAL PERFORMANCEThecomparativepositionoftheworkingresultsfortheyearunderreportvis-a-visearlieryearisasunder:

(` in Crores)

2015-16 2014-15

GrossEarnings 4277 4588

GrossProfit(beforeinterest,depreciation,itemsrelatingtoearlieryears,exceptionalitems&tax)

1299 1239

Less:Interest 161 179

DepreciationandImpairment 716 877 770 949

Profitbeforeitemsrelatingtoearlieryears,exceptionalitems&tax 422 290

Prioryear'sadjustments 2 (14)

ProfitbeforeExtraordinaryitems&tax 424 276

Extraordinaryitems - -

ProvisionforIndianTaxation (47) (75)

NetProfit 377 201

Appropriations :Theworkingresultsforyourcompanyfortheyear2015-16afterconsideringpriorperiodadjustmentsshowaprofitof`377.29crores.Anamountof`90.0croreshasbeentransferredtoTonnageTaxReserveu/s115VToftheIncomeTaxAct,1961.YourDirectorsproposetomakeappropriationsof`1.4croresforFY2015-16UnderStaffWelfareFund.Afteradjustinganopeningdebitbalanceof`34.72crores(beingbalanceprofitandlossaccountbroughtforwardfrompreviousyear),thereisacreditbalanceinProfit&LossA/cof`251.17crores.Brief Analysis of Financial PerformanceSCIhasreportednetprofitof`377.29Croresforfinancialyear2015-16.TheshrinkageinBulkcarriersandLinerfreightrateswasoffsetbyincreaseinTankerfreightrates.DuetosteepfallinMarketPricesandFreightratesofsomeofthevessels,thecompanyhadtomakeprovisionforimpairmentlossof`136crores.ReductionindepreciationduetochangeinusefullifeofTankersandOffshorevesselscoupledwith reduction inbunkercost havecontributedpositively to thecurrent yearprofit. TheconsolidatedNetProfitof thecompany for theFinancialyear2015-16was` 389.40Crores.Performance and Financial positions of joint ventures included in consolidated financial statements:

As on 31.12.2015 Fig (` in lacs)

Particulars ILT 1 ILT 2 ILT 3 ILT 4

TotalIncome 15463 16795 17809 -

PAT 3976 5207 248 (158)

Equitycapital 15 15 7 10853

Numberofequityshares 10,000 10,000 10,000 123,62,500

EPS .40 .52 .25 -

Dividend 0 0 0 0

Networth 9532 9629 (10156) 10636• ILT4isyettostartitsoperationsasthevesselisstillunderconstruction.• NetImpactonConsolidatedprofitsisincreaseofRs1211lacsuponproportionateconsolidationofabovejointventuresandonNetworth

isdeclineofRs203lacs.


DIRECTORS’ REPORT1.0 Fleet Position during the Year:Duringtheyearunderreport,therehasbeennoadditionordeletionofvesselstoSCI’sfleet.ThustheoverallfleetofSCIremainedsteadyat69vesselsof5.89millionDWTattheendoftheyear.Fleet Profile during the Year

Particulars As on 1.4.2015 Additions Deletions As on 31.3.2016

No. DWT No. DWT No. DWT No. DWT

1. (a)CrudeOilTanker 21 3,608,001 - - - - 21 3,608,001

(b)ProductTankers 14 908,059 - - - - 14 908,059

(c)GasCarriers 2 35,202 - - - - 2 35,202

2. BulkCarriers 17 1,113,889 - - - - 17 1,113,889

3. LinerShips 5 202,413 - - - - 5 202,413

4. OffshoreSupplyVsls. 9 20,150 - - - - 9 20,150

5. Passenger-Cum-CargoVessels 1 5,140 - - - - 1 5,140

Total 69 5,892,854 - - - - 69 5,892,8542.0Duringtheperiodunderreport,novesselwasinductedinSCIfleet:2.1Duringthesameperiod,thenovesselsweredisposedofffromSCIfleet:2.2Attheendoftheyear2015-16,theCompanyhadNILvesselsonorder.Particulars of Loans, Guarantees and investments.DetailsofLoans,GuaranteesandInvestmentsaregiveninthenotestofinancialstatementsExtract of Annual ReturnInaccordancewithsection134(3)(a)andsection92(3)ofthecompaniesAct,2013readwithrelevantrules,anextractofannualreturninformMGT-9ason31stMarch,2016isappendedtotheDirectors’Report.Subsidiaries and AssociatesYourcompanyhasnosubsidiaryCompanyandhassixJointVentures.Pursuanttosection129(3)oftheCompaniesAct,2013,astatementcontainingsalientfeaturesofourassociatescompaniesinformAOC-1isappendedtotheDirector’sReport.Inaccordancetosection136oftheCompaniesAct,2013theauditedfinancialstatements,ofthecompanyareavailableonourwebsitewww.shipindia.com.Particulars of contracts/arrangements with related partiesParticularsofcontractsorarrangementswithrelatedpartiesreferredtoinSection188(1)oftheCompaniesAct,2013,intheprescribedformAOC-2,isappendedtotheDirector’sReport.ThedetailsarealsoavailableinNote31tounder‘NotesonFinancialStatement’.Particulars of EmployeesInaccordancewithMinistryofCorporateAffairsnotificationno.GSR463(E)dated5thJune,2015,GovernmentCompaniesareexemptfromSection197oftheCompaniesAct,2013anditsrulesthereof.Risk ManagementInaccordancewiththesection134(3)(n)oftheCompaniesAct,2013theRiskManagementisformingapartoftheCorporateGovernanceReport.Conservation of Energy, Technology Absorption,Theinformationpertainingtoconservationofenergy,technologyabsorptionisformingapartoftheManagementDiscussionandAnalysisReport.Foreign Exchange Earnings and outgo (` in crores)

Particulars 2015-2016 2014-2015

Foreign exchange earned and saved including deemed earned and saved 3,771.57 4,103.73

Foreign exchange used including deemed used 3,678.42 4,183.32 Expenses on Entertainment, Foreign tours etc. – FY 2015-16 DuringtheyearunderreportyourCompanyspent`42lakhsonentertainment,`246lakhsonpublicity&advertisementsand`386lakhsonforeigntoursofCompany’sexecutives.

22

MANAGEMENT DISCUSSION AND ANALYSIS.TheoverallscenariounderwhichtheShippingIndustryoperatedandwhichimpactedthevarioussegmentsisdiscussedbelow;A. INDUSTRY STRUCTURE AND DEVELOPMENTSi) Global ScenarioTheyear2015wasmarkedbysubduedeconomicactivity.Intermsofarebound,theglobalrecoveryvehicleisstillfarawayfromitsdestination.Althoughthemajorchunk(around70%)ofglobalgrowthisstillattributedtoeconomicgrowthsofdevelopingandemergingnations, their share inglobal growthappears tobegradually subduedandwaning for the fifth consecutive year. Themajor factorsinfluencingglobaloutlookwereChineseslowdownintheinfrastructure,manufacturing&capitalinvestmentsectors,marginaltighteningofmonetarypolicybyUSonthebackdropoftheirstrengtheningeconomy,pricesforenergy&powercommoditiescontinuingtoremainlower.OilpricesdeclinedsignificantlyfromSeptember2015onwards,whichbenefittedtheimporters,whilestrainingtheeconomiesofexporters.TheUSeconomyremainedsolidwithfirmhousing&labormarkets&isexpectedtoholditspositionin2017.Europe,Japan,IndiaandotheremergingeconomiesofAsiareapedthebenefitsofloweroilprices.Asperanalysts,theChineseeconomyisshiftingfromimport-exportfocustointernalconsumption&services.AfterastellarperformanceintheFY15-16,theIndianeconomyisexpectedtooutperformChinaagainin16-17intermsofgrowthrate.

ii) Global GDPTheworldGDPgrewbyanaverageof3.1%in2015,withgrowthestimatesfor2016and2017at3.4%and3.6%respectively.ThegrowthinUSisexpectedtobe2.6%in2016-17.Meanwhile,Europe&otheradvancedeconomiesareexpectedtoshowmoderatetoslowrecovery.Chinacontinuestofaceslowdowninitsimport-export&capital-intensivesectors.Thoughaparadigmshifttowardsinternalconsumption&servicesisexpectedtobalancetheChineseeconomytosomeextent,stillmanyanalystspredictamedium-to-sharpslowdowninChineseeconomy,whichisexpectedtogrowat6.3%perannum.OntheotherhandIndiaisexpectedtoagainsurpassChinawithagrowthrateof7.5%drivenmainlybyastablegovernment&loweroilimportcosts.TheIMFreportforecastsglobaltradetogrowfrom2.6%in2015to3.4%and4.1%in2016and2017respectively,owingtosteadytradevolumesofadvancedeconomies,whileasignificantgrowthintradewithinemergingeconomies.Emergingeconomiesareridingonthelowerenergyprices,whichshouldreduceoverallbusinesscosts,whilehavingtheadvantageofgrowingdomesticdemand.TheglobalGDPgrowthdirectlyimpactstheinternationaltrade(exportandimports)andahigherGDPinturnwouldhaveapositiveimpactontheshippingindustryasabout80%oftheinternationaltradebyvolumeiscarriedbyshipping.

iii) Seaborne Trade, Fleet & MarketGlobally, theoil trade(i.e. ‘CrudeOil’and‘Products’segments)growthroseby2.91%comparedto0.5%growthin2014. Intheoilseabornetradedevelopment,the‘Crudeoil’tradeincreasedby2.81%at2,085milliontonsin2015,whereas‘Products’tradewas806milliontonsin2015,increasingby3.20%.Thetankerfleetexpandedby16.68%in2015ascomparedto0.56%duringthepreviousyear.Overallformostcrudetankerowners,2015wasaveryoptimisticyearassteadydemandgrowth&laginpluggingofdemand-supplygapsawfreightratesreachingveryhealthylevels.Thedrybulktradestoodstillwithnominalincreaseof0.08%involumeoverthecourseoftheyear2015,butoversupplyoftonnagecontinuedtoplaguethemarketsandearnings.Consequently,thetimecharterratestookaheavybeating,fallingintherangeof21%to30%acrossallvesseltypes,withsimilarsharpdeclinesinspotratesandtripcharterratestoo.Althoughthereisdecelerationinfleetgrowth,withtotalfleetgrowingatabout2.78%from5.3%in2014,andthefleetactuallyshrinkingin2016;thefleetgrowthisprojectedatanaverage1.5%annuallyduring2016-18,thuslimitingtheprospectsforareversalinthesupplydemandgap.Mostofthegainsindemandduring2015camefromthecoal,andminorbulktrades.China,Japaninironoretrade&Indiaincoaltradewerethekeydriversofthedemand.Irregularandextremecircumstances,specificallythesharpdeclineincommodityandoilpricesandthesteepdevaluationofcurrenciesagainsttheUSD,weigheddisproportionallyoneconomicgrowthandimportdemandofexport-orientedemergingmarkets.Theyalsonegatively impacted trade growth in developing Asian economies, while limiting global investment and curtailing trade demand inadvancedeconomies,particularlyinEurope.Acombinationofslowglobaldemandandtumblingcommoditypricesledtothedrasticdecline inworld tradevalue.Containerized tradewasnot immune to theevents incommoditymarketsand theensuing tightness infinancialmarketswhichaffectedthepurchasingpowerofbothemergingandadvancedeconomies.Containerizedtradegrowth1.7%pacein2015isthesecondlowest-expansionoftrade,secondonlyto2009whentradecontractedduringthecrisis.Container-capablefleetgrowth(cellularandnon-cellularshipstradingincontainertrades)acceleratedto7.5%in2015,upfromamuchmoremoderate5.2%annualexpansionduringtheprevioustwoyears.Scrappingdevelopmentssloweddownin2015thoughtheactivitysurgedbyyearendaschartermarketscollapsed.Newbuildingslippagesincreasedtowardstheyearendduetodeterioratingmarketconditions.Averagelineroperatingprofitability,afterthreelongyears,hadbecamepositivein2014;however,aftershowingthebest6monthlongoperatingperformancebeginning2015,thefreightratesstartedfallingthereafterandcollapsedtohistoricallowsinNovember,bringinglineroperatingprofitabilitydown.

iv) INDIAN SCENARIOAsperCentralStatisticsOffice(CSO),Indianeconomygrewbyarobust7.6%(estimated)in2015-16,comparedto7.2%growthin2014-15onthebackdropofimprovementinbothservicesandmanufacturingsectormarkedbyconfidenceinthemarketsowingtoa

DIRECTORS’ REPORT


pro-reformgovernment&significantdecreaseinoilimportcosts.IndiaovertookChinainGDPgrowththisyear.AccordingtosourcesfromMinistryofCommerce,India’sexportsinvaluetermsfellby15.57%toUS$262.03billionin2015-16,whileimportsalsofellby15.04%toUS$380.67billion.AsperPressInformationBureau&IndianPortAssociation(IPA),thequantumofCargoTrafficatIndia’s12majorportsroseby3.13%infirstthreequartersof2015-16i.e.fromaround433.5milliontonsinApril-December2014to447.05milliontonsinApril-December2015.ThelargestcommoditygroupinthetotaltrafficwasP.O.L.(Petroleum,Oil&Lubricants)witharound32%share,followedbyContainertrafficandCoal(21.5%each),‘OtherCargo’(21%),FertilizersandIronOre2%each.Ontheotherhand,theexistingnon-majorports,especiallyprivateports,continuetogrowduetofactorssuchasadiversifiedcargoportfolio,superioroperatingefficiencyandinfrastructure,andthepresenceofcaptivecargostreams.

v] STRENGTHSYearsofexperienceinShippingtogetherwithdiversifiedfleetacrossallmajorsegmentsgivesSCIauniqueabilitytoexploitdemandgrowthinanygivensegmentwithaquick-moveradvantageonthepeakoflearningcurve.Newacquisitionshavebroughtdownaverageagefrom18years in2007toabout10yearspresently.LongstandingCOArelationshipswithmajor IndianOilRefineriesoffercargosecurity.AstrongpresenceinthecrudeandPetroleumsectorprovidedgoodreturnsintheyear,whichfeaturedhighercargodemandonamoderatetonnagegrowth.

vi] OUTLOOKAs theprospects forglobaleconomypoint to improvedgrowthatabout3.4%-3.6% in2016-17,oil tradedemand (bothcrudeandproduct)willgainsupportfromlowoilpricesandchangingtradepatternsareexpectedtoabsorbthemodestgrowthinfleetlendingsupporttopositiveearnings.OneofthemajorshiftsinoiltonnagewillbeduetowaningproductionofcrudeoilinUS,thusincreasingimportsofthecountry&shiftingalotoftonnagetowardstheregion.Whilethiswouldallowthetankermarkettoremainbuoyantoverthecomingyear,butwithamarkedincreaseintankersupply&onlymarginalincreaseindemand,ratesandpricesforbothcrudeandproducttankersareestimatedtodipdownwards,onaveragecomparedto2015.Mostindicatorsarelikelytostabilizein2017andfrom2018-20,product tanker indicatorswouldholdsteadyover thisperiod,whilecrude tanker ratesandpricesmaycomeundersomepressureduetoincreasingdemand-supplygap.Inthedrybulksegmentfreightratesareexpectedtoundergoseverevolatilityoverthecourseofnexttwoyears.Morespecifically,freightratesforSupramax,Panamax,andsmallbulkersareprojectedtodecreasein2016beforegoingupin2017-19duetosurgeinthedemand.In the container segment, all containerized trades suffered lower growth in 2015with several lanes seeing outright contraction involumes.LiftingstocommodityexportregionslikeRussia,LatinAmerica,WestandSouthAfricafelllowerthan2014figuresastheywerenegativelyaffectedbydevelopments incommodityprices.SlowdowninChineseeconomyweighedoneconomicgrowthof itsAsia-PacifictradepartnerswhichdependonChinafortheirexports.SharpdepreciationofseveralAsiancurrenciesagainstUSDollarnegativelyimpactedtheirpurchasingpower.Containerizedtradeishoweverexpectedtoacceleratein2016ascommoditypricesresumepositivegrowth,financialliquidityreturnstothemarkets,investmentgainsnewmomentumandeconomicgrowthinemergingmarketsbouncesback.Effectivelinerfleetutilizationisexpectedtoaverage79%in2016upfrom78%in2015.Marketfundamentalsareexpectedtoimprovein2017.Chartermarketconditionsareexpectedtobecomebetterin2016.Charterfleetutilizationisexpectedtoaverage73%in2016modestlyhigherthan72.3%in2015andimproveto74%in2017.ThereturnofIrantotheglobalmarketsandapossibleliftingofEuropeansanctionsonRussiacouldalsohelpbuttressdemandforfeedercapacity

vii] OPPORTUNITIES &THREATSThedevelopingAsiaregionisexpectedtoperformbetterin2016ascomparedto2015withIndiasurpassingChinaforthefirsttime.ThelowoilpricesareexpectedtoimprovetheeconomicsituationsofmostofthedevelopingAsiannationssupportingthebasisforaprosperouseconomicoutlook.TheAsiaregionisexpectedtogrowby6.3%in2016,slightlydownfrom6.6%growthin2015withIndiapoisedtogrowat7.5%.TheEuropeaneconomyisexpectedtoshowmodestgrowthof1.7%in2016withgrowthcominginprimarilyfromtherecoveringEuroeconomies&strongerprivateconsumptionduetomonetaryeasing.TheJapaneseeconomyisexpectedtogrowatamodestrateofabout1%in2016.Asfarasthecontainersegmentisconcerned,sharpchangesinthefactorsleadingtodownsizingoftradesin2015viz. lowoilandcommodity prices and consequent subdued commodity demand are expected to abatewhich in turnwould favourably impact thecontainerizedtrade.EuroandEurope-RussiatransshipmentsareexpectedtostabilizewithanimprovingEurozoneeconomy.Aprojectedstrongcyclicaleconomicreboundcombinedwitharevivalinglobalinvestment,ascommoditypricesmovehigherwouldhelppropeltradegrowth.Containerizedtradegrowthisprojectedtoincreasefrom1.7%pacein2015to4.4%in2016and6.5%in2017.Container-capablefleetgrowthisexpectedtomoderateto5.5%in2016andeasefurtherto4.7%in2017,apaceconsiderablylowerthanthe7.5%annualgrowthof2015.

viii] RISKS & CONCERNSGeopoliticaltensions,theUSmonetarypolicytightening,decliningindustryoutputandfallingdemandinChinaremainthemajormacrorisks.Thegraduallydeterioratingpolitical&economicsituation inBrazil isbecomingacause forconcern.The lowcrudeoilpriceshavestrainedtheeconomiesofoilexportingcountriesbothMiddleEastandRussiawhointurnmaybeforcedtocutsubsidiesandconsequently hurt demand. The fallingRussian economy is seen as an example of an economyhit directly by falling oil prices ingeneral.Fallingoilprices,alongwithwesternsanctionscontinuetokeeptheRussianeconomyinrecession.ThedecisionoftheChineseGovernmenttoincreasethepercentageofnonfossilfuelsinitstotalenergymixcouldcurtailfutureoildemandfromthecountry.Inthe

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eventthesenegativetrendsstrengthen,thecrudetankersratesarelikelytoremainflatduring2015-18.Similarly,inthedrybulksegment,therisinginterestratesinemergingeconomiescouldleadtoslowingimportdemand.Additionally,relativelyflatsteelproductioninthedevelopingAsiaregionduetoweakerChineseeconomyremainsamatterofconcern.Onemoresoliddriverofcoaltrade,Japan,isalsoplanningtoreduceitsdependencyoncoal,thuslikelytohamperthecorrespondingmaritimetrade.

B. SEGMENT-WISE FLEET & MARKET STUDY1. BULK CARRIER & TANKERa) Crude Oil & Product TankersTheglobalconsumptionofCrudeOilregisteredamarginalincreaseof2.7%to96.30millionbarrelsperdayoverthepreviousyear.Itisforecastedthatthedemandgrowthisexpectedtocomefromdeveloping&advancedcountriesofAsiasuchasIndia,ThailandandKoreawhiledemandisforecastedtoshrinkforOECD-Americas&OECD-AsiaOceania.DuetoadipinUSproduction,USimportsofcrudeoilfromMiddleEast&WestAfricaarepredictedtobeontherise,helpingtoboostton-miledemand.However,thenetflowofglobalcrudetradeisforecastedtoshifteastwards,duetoongoingbuildupofstrategicreservesbyChina&otherAsiancountries.Thesecountriesaresupposedtocontinuetheirtrendoftakingadvantageofthelowcrudeprices.Thissurgeinstrategicreservesislikelytoengagesomeofthetonnageinfloatingstoragemode,hencestrainingthesupply-sideoftankertonnage.Thereweredeliveriesof7.6milliondwtand3.0milliondwtofnewlybuiltcrudeoiltankerandproducttankersrespectivelyin2015.ForCrudeoiltankers,thedeliveriesexpectedare22.2milliondwtand20.0milliondwtin2016and2017respectively.ForProducttankers,therespectivefiguresare5.7milliondwtand5.0milliondwteach.Newbuildingpricesfortankerslargelyremainedsteadyin2015,nominallyrisingbyabout0.1%in2015andcontinuingthestabilizationfromtheearlypartof2015.Inton-mileterms,itisestimatedthatcrudetradeincreasedby3.26%comparedtothepreviousyear.ThetradeislikelytoremainrobustonimportgainsinAsiaPacificandanexpectedre-startofUSimports.TheaveragespotrateofTD3routeofAG/EastforVLCCwasUS$68,600/dayin2015.ThefuturemarketinthissegmentseemstobeintherangeofUS$50,000-60,000/day,slightlyaffectedbythesupplysurge.OneYearTCrateforVLCCwasaboutUS$46,542/dayin2015,withsomefixturesdoneathigherlevelsduringthelatterpartoftheyear.TheSuezmaxrateonBlackSea/MedroutewasintherangeofUS$48,658/dayin2015whichisexpectedtodecreasebyabout20%peryearoverthenext2years.ForAframax,thespotrateonAG/FarEastroutewasUS$35,650/daywhichhastouchedhigherlevelsduringtheendoftheyearandisexpectedtoturnvolatileowingtofueloilarbitragetrades.ForProducttankers,LR1SpotratesonAG/EastwasUS$21,700/dayin2015andexpectedtodecreasesignificantlyin2016.OneyearTCrateforLR1wasUS$24,700/day.InMRtankersonCaribs/USroutethespotratewasUS$20,400/dayin2015.OneYearTCrateforMRwasUS$18,600/dayin2015andexpectedtobearoundUS$17,800/dayforthenextyear.YourcompanyhasfiveVLCCs.2oftheseunitswereemployedunderlongtermtimecharterbusinesswithIndianOil,withtheotherthreeunitsmainlyemployedinthespotmarketonVoyageCharterduringFY2015-16.YourSuezmaxtankersweremainlydeployedwiththeIndianoilindustryandperformedCOAvoyages,exceptoccasionallyperformingspotvoyagesforIndianandforeigncharterers.TheCOAearningsarebasedonmarket-linkedindices.YourproducttankersintheSwarajyaSerieswereallwellemployedwithIndiancharterersandtheirearningscomparewellwiththemarketaverages.ThetwoMRproducttankersintheSwarnaseriesweregainfullyemployedwithIndiancharterersandtheirearningscomparewellwiththemarket.MTSwarnaMalawasdeployedwithforeigncharterersforshortperiodsduringthefinancialyear.TheMRproducttankerMTBCChatterjeewasemployedwithIndiancharterersandtheearningscomparewellwiththemarketaverages.ThetwoLR-IItankersMTSwarnaJayantiandMTSwarnaKamalgavestablereturnsontimecharterwithforeigncharterersforagoodpartofthefinancialyearandarecurrentlyemployedonspotcharter.Earningsofyourcoiled/doublehullAframaxtankerswere in linewith theaverageofbenchmarkyieldsunderTD8(ArabianGulf toSingapore)andTD14(Indo-Australia)routesmainlyonthebackofCOAvoyagesunderTD8pricingformulaandtriangulationvoyagesduetointermittentfueloilarbitragetradeswhichminimizedballastvoyages.TheAframaxesmainlyperformedIndiacentric/FarEast/RedSeavoyages.Outofyourcompany’ssixLR-Itankers,fivetankersperformedcoastalmovementsfortransportationofcrudeoil.OneLR-Itankerisdeployedundercleantrade.Theaverageearningswereinlinewiththemarketaverages.

i) OpportunitiesWithUSoilproductionexhibitingdownwardtrend&Europeaneconomiestrudgingontheirroadtorecoveryshowingsignsofstabilizing,growth inglobal oil demand is expected to rideheavilyon theAsiannations. It is projected thatmanyAsianeconomieswill showremarkablegrowthinthenextyear.HencetherewillbealotoftonnagepresentinthesouthernAsianregion.Additionally,MiddleEastislikelytobecomeamajorgrowthhubfortheoiltrade.Sincethecompanyhasmuchofthetradegoingoninthisregion,thisscenariowillbebeneficialtoourcompany.Netglobalcrudetradeflowisexpectedtoshifteastwards.Duetoincreasingfloatingstorage,increaseinrefinerycapacitiesandpolicyofbuildingupstrategicreserves,Chinaislikelytoincreaseitsimportsleadingtoanimportspike.ManyAsiannationsarestillkeenonbuildinguptheirstrategicreserves.Althoughthistrendisdeclining,thisstillpresentssomeusefultonnageintheAsianregion.

DIRECTORS’ REPORT


TheconstancyintherecenttrendoffloatingoilstorageinAsianregionissupposedtoboostthetonne-milesdemand,especiallyinthesouth-eastAsia&Chinesewaters.This,alongwithincreaseintheUSimportsislikelytocreateatemporarysupplyvacuumwhichcouldpositivelytriggerfreightratesintheMiddleEastregion.Theabovestructuralsupplyfactorsareexpectedtoleadtoincreasedtonne-milesasrefinersfinditeconomicaltofloatandshiplowcostoiloverlongermiles.ThedemandgeneratedbyUSimportsistobemetmostlybyOPECcountries.ThisisexpectedtoincreasedemandforcrudeoiltankersmajorlyintheWestAsiaGulftoNorthAmericaroute.ThetonnagevacuumthusgeneratedwillboostforWestAsiaGulftoSouthEast&FarEastAsiatradeswhereyourtankersmainlyoperateandarewellpositionedtoexploitthetradeopportunities.OverallexpansioninglobalrefineryoutputsaswellasnotableincreasesinrefinerycapacitiesinMiddleEastonbackdropofloweroilprices,couldrendersupporttotheoilproductstrade.Thoughtheratesmayfacesomepressure,theseattractiverefinerymarginsareestimatedtoboosttheproductstrade&expectedtoensuremoderatecleantankermarketsandyourcleantankerswillstandtogetgainfultrades.

ii) Risks and ConcernsAspersomerecenttrends,fewcountriesseemtobefocusinginwardsforeconomicimpetus,whichmayresultinanadverseimpactonglobaltrade.Further,witharenewedfocusonrenewableenergyintheemergingeconomiestheremaybereductioninuseoffossilfuels,whichmayslowdowntheglobaloiltrade.Onemorereasonsforthisisthefactthatmostofthecountrieshaveaccumulatedsignificantinventories&atsomepointarelikelytodrawfromit,insteadofimportingoilfromabroad,iftheireconomiesdonotgrowsubstantially.Theoilconsumptionislikelytodecline,howeverthefleetgrowthofdirtytankersmaynotfollowsuit.Theincreaseinfleetinthefaceofdecliningconsumptionislikelytoputthepressureonrates.Adwindlingpolitical&economicsituationofBrazilandpartsofSouthAmericamaymakeadenttheSouthAmericantrade.Also,thepriceofcrudeoilislinkedtotheinternationalmonetaryexchangeratesandcountriesadverselypositionedwithdepreciatingcurrencieswouldfinditdifficulttoimportinlargerquantities.Weaknessinoilproductsdemandcombinedwithhighoilreservescreatedbymanycountriesislikelytoputpressureonoilproductstrade.Thefreightratesmaydipinthecomingyearduetohighertankersupplyoverpossiblereductionindemand.

b) Dry BulkThebenchmark,theBalticDryIndex(BDI)felltoanaverageof655in2015-16from915in2014-15registeringasteep28%decrease,reachingitslowestleveleverbytouching290pointson10.02.2016andisnowhoveringaround600.Theglobalimportsofdrybulkstoodat3798milliontonsandgrewbyonly0.1%overpreviousyear2015.Whencomparedto2015,drybulktradeisestimatedtoremainfairlyconstantin2016,withtonne-miledemandgrowingbyanestimated1.3%.Thedrybulkglobaltradeisexpectedtogrowonanaverageof2.4%forsubsequent3years.Thedrymarketremainsinundatedwithtonnagesupplywithveryvolatiledemand.Alongerwaitforrecoveryisexpectedwithdrybulkfleetgrowthprojectedat0.5%in2016andanaverage2.5%overthenext5years.Steel&Coal,whicharethekeydriversofdrybulktradecontinuetobeaffectedduetoslowdowns&changesinconsumptionpatterns.AlthoughtheBDIrosesomewhatfromtheabyssinmonthofMarch,therecoveryisexpectedtobeshortlivedwithmarketfundamentalsstillnotinplace.Hence,mediumtolongtermoutlookofthemarketstillremainsbleak.Eventhoughtherehasbeenacontractioninthedrybulkfleetafteralongtime,itwouldtakequiteawhileforthecontractionripplestogenuinelyimpactthemarkets.Thedrybulksegmentcontinuestobeboggeddownbylowprofitabilityduetolowearningscausingdepressedassetpricescaughtinadownwardspiral.Subduedcargodemandhasaddedtotheexistingwoesofthedrybulkmarket.TheslowdowninChineseeconomyisamajorfactorlikelytoweighdownthedrybulktrade.Someofthedrybulkvesselsbeingconvertedintotankersshowdesperateattemptsbyownerstobidadieutolowearningsandtoswitchtoworthieroptions.India’sironoreexportsslippedto13.1mmtin2014-15comparedto15.4mmtexportedin2013-14.WithregardtoThermalCoal,Indiaissettoseeaconsiderableincreaseinitsimports,risingfrom161.5milliontonsin2015uptoaforecastofaround167milliontonsfor2016.India’sureaimportsfellby3.14%to84.74lakhtonslastfiscalonstagnantdemand.Thecountry,whichisamongtheworld’stopthreeconsumersofurea,producesabout22milliontonsureaasagainsttheannualdomesticdemandof30MT.Indiaimported8.47millionmtofureainfiscal2015-2016,ofthis,4.24millionmtcamefromChinaand2.32millionmtfromOman.UreamovementintoIndia,whichisakeycargofordrybulkvesselsandispartofminordrybulkcommodities,hasforthelastfewyearsbeena“supportingtrade”forbulkersrangingfromHandysizetoPanamax.GraintradeislikelytoprovideatemporaryboosttodrysegmentduringthefirstquarterofFY15-16.GraintradeisestimatedtoprovidemuchneededrelieftoPanamaxes,withexportersofArgentina,Australia,France,Germany,Kazakhstan&EasternEuropelikelytostepuptheexports.Globalsteelproductiondeclinedby6.8%intheQ1of2016withreduceddemandfromEuropeandAsia,whereasChinesesteelproduction,whichhitrock-bottomin2014,projectedtoslumpevenlowerduetohighnumberoflossmakingsteelcompanieswithinthecountry.Freshanti-dumpingdutieshavebeenimposedbyUS&EuropeonChinesesteel,withUSlevyingdutiesashighas266%.OnemorereasonforsuppressedsteelmarketispolicyshiftinmanycountriessuchasVietnam,Germany&UKtoboostdomesticsteelproduction&curtailingimports.Sofar,thisyear,142drybulkshipsaresoldfordemolitionasagainst407drybulkersfortheentirelastyear.Sofaralready48Panamax

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bulkershavebeensoldforscrappingin2016ascomparedto83inthewholeof2015.Additionally,numberofships,areoutofplayandpossiblyheadingforhotorcoldlay-ups.Asmentionedabove,drybulkfleetcontractedduetothreefactors:1) Increaseindemolitions/scrapingsascompaniesfightfortheirsurvivalortoexitthesegmentwhileminimizingthelosses.2) Conversionofvesselsintotankersbymanyowners,inquestforamoreprofitabletrade.3) Drasticincreaseinlay-ups(almost250vesselswerelaidup,accountingfortonnageof12milliondwt).Evenso,thedrybulkfleetregisterednominalgrowthinQ1of2016,asitincreasedbyamere0.29%fromtheyear-endfleetandstoodat778milliondwt.Itisobviousthatthisgrowthisonthebasisofdeliveriesofvesselsorderedpreviouslybeforethedramaticfallinmarketfortunes.Itisestimatedthatdemolitionswillincreasebyapproximately5.65%in2016fromlastyearbecauseoftheweakfreightmarket.YourCompanyownstwoolderHandymaxbulkcarriers(averageage17years)ofaround45,000dwt,eightmodernSupramaxbulkcarriersofaround57,000dwtandsevenmodernPanamax/Kamsarmaxdrycarriersofaround80-82,000dwtason31stMarch,2016.Thebulkcarriersfleetisveryyoungwithanaverageageofabout5years.Thedismalstateofdrybulkchartermarketintheyearwasthecauseofsoftearninglevelsofourfleet.Inordertomaintainahealthycashflowyourcompanypreferredfixingthebulkcarriersontriptimecharterandshort-to-mediumtermtimechartersandminimizelong-termperiodchartersatlowcharterrates.

i) OpportunitiesPoorfreightmarketsandresultantdepressedorderingandconversionofdrybulkcarrierstotankersisexpectedtosignificantlyslowdowndeliveriesandfleetgrowthoverthe2016-2019.Thefleetgrowthisexpectedtobeatanaverageofjust2%peryearoverthisperiodasagainsttheaverageexpectedtradegrowthof2.97%intermsofvolumeand3.5%intonmiletermsovertheperiodof2016-2019.Indiaisgoingtobeaninterestingdestinationforthedrybulkmarket.Therequirementofcokingcoalviaimportstomeetthecountry’sincreaseinsteeldemandderivedfromfocusoninvestmentandinfrastructure,plusprojectedimportofthermalcoalby167MMTwouldboostshippingactivity.Arobustcoastalmovementofcoalowingtoincreaseddomesticproductionwouldstronglysupporttonnagedemand.India’scoalimporttradeisgraduallyshiftingthefocusfromIndonesiatoSouthAfrica.Thisisawelcomedevelopmentforourdrybulkships,haulingmostoftheimportcoalcargoesofIndiaonalongerroute,therebyincreasington-miles.Thecokingcoalmarketsseemquitefavourableforthetrade,sinceshippingcostsforthetradehavedeclined&cokingcoalpriceshaveenduredsubstantialsoftening.India’sprimesourceofcokingcoalisAustralia,andhencethisroutemayseehandsomedividends,particularlywithdecreaseintonnagesupply.Indiaisexpectedtoseeacapacityadditioninpowersectorof80,000MWinthe12thFive-YearPlan(2012-17).Itrequiresaround4.5milliontons(M.T.)ofcoaltogenerate1MWofthermalpower.Thismeanstherewillbehighinvestmentsinpowersectorandthecoalrequirementtorunthesepowerplantswillcontributetoincreaseddemandforshipping.Bytheendof12thfiveyearplanthecountry’scoalrequirementwillreach1,000milliontonsofwhichapproximately200milliontonsofcoalwillberequiredtobeimported.IndiancompaniesaremakinghugeinvestmentstosecurerawmaterialslikecoalfortheirpowerplantswithacquisitionsinEastAsia,AfricaandeventheUSA.Withtheseimportsinpipeline,theshippingsectorwillstandtobenefitfromincreasedimportcargoes.

ii) Risks & ConcernsThefreshanti-dumpingdutiesimposedonChinesesteelwillfurtherfueltheslowdownbeingexperiencedbythecountry.ThiswillcreateanotabledropinironoreimportsbyChina.Withpoliciestoboostdomesticsteelproduction,theremaybesharpdeclineinthesteelimportsofUK,France&Vietnam.Thiswillfreeupalotoftonnage,therebyincreasingtheoversupplysituation.Inparallel,coaltrademayshowsignsofnervousnessowingtogreaterconcernsonenvironmentalimpactofcoal.BothIndia&China,thetopimportersofcoalworldwide,areintroducingpoliciestoreducethedependenceonimportedcoal.Chinaisshiftingfocustowardsrenewableenergy,whileIndiahasplanssettoincreasedomesticcoalproduction.Grainandfertilizertradesareseasonalandshortterminnaturewithuncertainparcelsizeswhichrequiretimelypositioningoftonnagetoexploitthetrade.Theyarealsodrivenbycatastrophicimbalancesinweather,whichisunpredictable.Theglobalgraintradeislikelytobeadragonthedrybulkmarketthrough2016.Aftergrowingatastriking9%pacein2014,itisexpectedtogrowbyjust0.95%in2016-17,basedonthelatestforecastfromtheInternationalGrainsCouncil.SCIwithcriticalmassinPanamaxesiscateringtotransportationoftwomajorcommoditiesi.e.Ironoreandcoal.InviewslowdowninthesemajortradesgloballytheearningsofPanamaxesmaycontinuetosuffer.SCIisexploringoptionsingraintradebasisopportunitiesopeningupinSouthAmericaandNOPACregion.Theconcernsofoversupplymayremainstrongasduetorecentdeliveries,thesupplyofSupramaxtonnageincreasedto181milliondwtbyMarch2016,thehighestSupramaxtonnageever.Thiscouldnotcomeataworstpossibletime&eventhoughsupplycorrectionsarepresentinthepipeline,themediumtermoutlookforthemarketdoesnotbodewellforthissector.Themacroeconomicfactorssuchasinterestratevolatility,subsidiesonpetroleumproducts,volatilerupeevaluevisà-visthedollarandinflationcontinuetoplaguethenationaldemand.Shippingbeingaderiveddemandwillbenegativelyaffectedbythesefactors.

c) LNG Transportation

DIRECTORS’ REPORT


ThescopeforgrowthofLNGtransportationishighconsideringthatLNGannuallyaccountsfor8%ofthetotalenergymixandisprojectedtogrowupto20%by2030.Indiaisthe4thlargestimporterofLNGaccountingfor6.06%ofthetotalglobaltrade.India’sLNGdemandisprojectedtosoarfrom64millioncubicmeters(mcm)perdayin2015toover306mcmperdayby2021.Theexpectedcompoundannualgrowthrate(CAGR)isat16.89%fortheperiodbetween2015-2021.TheloweringofgaspriceshasledtoasurgeindemandforgasinIndia.TheLNGterminalatKochibecamethe4thoperationalterminalinIndia,whilenewterminalsareplannedatMangalore,Mundra,Pipapav,EnnoreandHaldiaandfurthercapacityadditionsatHaziraandDahej.ThereisoptimismaboutIndia’sLNGdemand,takingintoaccountthedrivetoincreasetheshareofgasinthepowerindustry.PursuanttotheMOUsignedwithGAIL,SCIisworkingcloselywithGAILforthetendertoin-charter9LNGtankersonalong-termbasis.ItisexpectedthatLNGtankerswouldbebuiltinIndianShipyardsinlinewiththe“MakeinIndia”campaignwhilethefurthertankerswouldbebuiltinforeignshipyards.SCIwilltakeupastakeinalltheLNGtankersfortheproject.TheGorgonLNGplantandGladstoneLNGproject (Train2) inAustralia iscommissionedandhascommencedexportofLNG.Yourcompanyhasacquired26%stakeinLNGtankerM.T“Prachi”,beingbuiltinS.Korea,whichwillbeoncharterfor19yearswithPetronetLNGLtd.ThisvesselwillshipLNGfromGorgonTerminaltoKochiorDahejinIndia.YourCompanyhasdevelopedapooloftrainedandexperiencedofficerstooperateLNGtankers.ThisexpertisealongwiththeexperienceofindependenttechnicaloperationofLNGtankershasprovidedtheadvantagetoyourcompanytoexpanditsLNGShipManagementexpertise.

d) Ratnagiri Gas Power Pvt Ltd (RGPPL) – Port and Marine Services Uponsuccessfulcompletionoffirst3-yearlycontractwithRGPPLforprovidingportandmarineservicesatitsDabholport,RGPPLhasrenewedthecontractforafurtherperiodof3yearswhichwillearnarevenueofabout`116Crores.

e) LPG CarriersYourLPGcarrierswerepre-dominantlydeployedundertimechartertoIOCLatprevailingmarketrates.Theprocessforreplacementofthesetankerswhichareover25yearshasbeeninitiated.DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCEThefinancialperformanceof thetankersegmenthasbeen largely influencedbygoodearningsontheVLCC,SuezmaxandAframaxsegmentswhereSCIhashadamixofcrosstradecharters,ContractsofAffreightmentandTimecharterbusinessestoeffectivelyhedgeemploymentandearningsrisks.OnthesmallersegmentproductcarriersandLRIdirtycarriers;theemploymentwasmainlytomeetthedomesticproductandindigenouscrudemovementsonlongtermcontractsandtimecharterbusiness.Themixofemploymenttypesandgeographicalconcentrationinnichecoastalbusinesssegmentshasensuredreturnsinlinewithmarkettrends.Thedrybulksegmentwassubject tosevere tonnageovercapacityworldwideand lossofkeycargoessuchas Ironore fromIndiaresultinginnonprofitableballastvoyagelegstherebyreducingearnings.Althoughsomereliefwasofferedbycoalcargoes&minorbulks,earningsremaineddepressedduetolowfreightmarkets.Veryfewprofitabletradesemergedduringtheyearunderconsiderationandthesituationisexpectedtoremaindepressedwithearningsremainingunderpressure.

2. LINER & PASSENGER SERVICES LINER SERVICESA. INDUSTRY STRUCTURE AND DEVELOPMENTSi) Global Scenario:Record-lowrates,fallingvolumesanddismalloadfactors(vesselutilization),allcombinedtopushdownthelinerindustryoperatingprofitability.Fortheyearasawhole,thelinerindustryEBITmarginsaveragedaroundzerolevelwithseveralcarrierssufferingoperatinglosses.Linerfreightratesfelltoall-timelowsandoperatinglossesincreased.Containershipcharterratesalsotumbledbelow2012-13levelsformediumandlarge-sizevesselswithPanamaxandover-Panamaxshipsratesfallingbelowoperatingcosts.Marketfundamentalsweakenedsteadilyduring thecourseof2015.Oceancarriers resorted to routineundercuttingcompetition inaneffort to luremorebusiness.Whilefallingfuelpricesallowedsomebufferforfreightratestoadjustlower,ratedeclineswereexcessiveandwidespreadacrossallmarkets.Lacklustertradedemandwithacceleratingfleetgrowthbroughtdownthelinerfleetutilization.FleetutilizationinAsia-EuropeWB(westbound),itsmainarteriallane,collapsedduetocontractingtradevolumesandadelugeofmega-shipdeliveries,despitecascadingofthevesselstoothermarkets.ItheldmuchbetterintheTranspacificEB(Eastbound)theothermajorarteriallanethoughitfellduringtheyearendastradegrowthweakenedwithrobustcapacityexpansion.Fleetutilizationworsenedinothertradesoutsidepremierarterialhaul-waysascascadingtonnageoverpowereddemandgains.Inall,effectivelinerutilizationfellsharplyandaveraged78%in2015downfrom82%in2014.CharterrateshavingsurgedtonewhighsinMay/June2015withthelineroperators’expectationsoffast-risingintra-Asiademandtumbledtonearall-timelowsbyyearendasthetradegrowthremainedweakinthesecondhalfof2015.Charterfleetutilizationfellfrom74.8%in2014to72.3%in2015,anall-timelowlevelseenduringthecrisisof2009.

ii) Indian ScenarioThevolumeofexportandimportcontainershandledatmajorportsinIndiaroseby2.98%in2015-16fromtheyearagolevelsand

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28

totalcargotonnageinchedup4.31%,accordingtothetentativeestimatesofIndianPortsAssociation.Cumulativeyearlytraffictotalednearly8.2millionTEUsinApril2015throughMarch2016period,upfrom7.9millionTEUsinthepreviousyear.JawaharlalNehruport,India’sbusiestcontainergatewaylocatednearMumbai,handled4.49millionTEUsand64.02milliontonsofcargointheyear2015-16ascomparedto4.46millionTEUsand63.80milliontonsin2014-15.

iii) Opportunities & ThreatsAggressivemonetaryeasing inEurope,ChinaandJapanareexpected tounderpinconsumerdemand in these regions in late2016and2017.CommoditypricesarealsoexpectedtogetaboostandeconomicrecoveryinemergingmarketsandtheUSisexpectedtoaccelerate.Thesewouldresultincontainerizedtradevolumesenjoyingstronggainswithtradegrowthnotching5.6%in2016andrisingto7.8%in2017andaveragecharterratesclimbingupsteadilyin2016andrapidlyin2017toapproachhighslastseenduringthemarketpeakof2010inearly2018.Fleetgrowthissettomoderatein2016andsignificantgainsintradedemandareexpectedinmaintrade-lanes.Marketconditionsarelikelytoremainweakinthemajorarterialhaul-waysparticularlyintheAsia-EuropeWBtrade.Trans-PacificEBfleetutilizationisexpectedtoaverageto91.2%in2016whichinturnisexpectedtoallowforasignificantraterestoration,especiallytocargoesheadingtotheUSEastCoastviathenewPanamaCanal.CompetitionintheindustryisexpectedtosubsideafterthethreeglobalalliancescommenceoperationsinlateMarch2017.This,comingatatimeofanexpectedeconomicandtradereboundandcombinedwithcontinuousmoderationinfleetgrowthisindicativeofafreightratereboundnextyear.Thelineroperators,however,havetosurvivethreechallengesthisyear:(1)weaktradegrowth;(2)thepersistentrateundercuttingresortedtobyshipowners’whichdeprivescarriersthecapacitytosustainratesathigherlevelsaftergeneralrateincreases(GRIs)and

(3)therelentlesspressurefromregulatorsonthelinerindustrytorefrainfromimprovingtheirbottomline,ratherthanonfleetexpansionandtheaccumulationofmoredebt.

B SEGMENT-WISE PERFORMANCE1 Liner Vessels:YourCompany’sownedlinerfleethavingtotalcontainercarryingcapacityof14,407TEU.Ason31.03.2016,anin-charteredcontainervesselhavingtotaldwt.of90414mt.wasoperatedbyyourCompany.Inadditiontotheaboveownedandin-charteredvessel,yourCompanyalsohascargoloadingrightson19vesselsofitspartnersinvariousconsortiaarrangementsthatyourCompanyhaswithleadingshippinglinessuchasMediterraneanShippingCompany(MSC),PILofSingapore,K-Line,WanHaiofTaiwanandSimatechShipping,Singapore.YourCompanycontinuedtodeployitsowned/operatedContainervesselsinthefollowingsectors.

2 Container Servicesi) ISE ServiceTheUK-CCellularContainerServicecommencedin1994withSCIasasingleoperatoroperatingthreevesselswith1800TEUcapacitywhichwaslaterupgradedtoafixeddayweeklyservicewiththreepartnersoperatingsevenvesselsofsamecapacity.Theservice,fromMay2009,isbeingoperatedinconsortiacomprisingoftwopartnerswitheightvesselsofwhichtwovesselshavebeencontributedbySCI.SinceFeb2016,theconsortiacontributionhasbeenchangedtooneSCIvessel.Thisstrategicreductionhasbeendonetoimproveprofitabilityoftheservice.Theserviceisoperatedonaroundvoyageof56days.

ii) IPAK ServiceIn aslot swaparrangementbetweenSCI andMSC,SCIhasbeenallotted200TEUsslotsbyMSCwhichoperates IPAKservice inexchangeforsimilarslotsallottedtoMSContheISEservice.

iii) India / Far East Cellular Service (INDFEX 1)ThisservicecommencedinJune,2001.Presently,itisoperatedwith5vessels(1vesseleachbythreepartnersviz.Kline,PIL,SimatechandSCI;and2vesselsbythefourthpartnerWanHai,WHG)andwasupgradedinSeptember2012byreplacinga3500TEUvesselbya4400TEUvessel.TheserviceispresentlyoperatedasaweeklydirectservicefromIndia’sWestCoasttoCentralChina,HongKong,SingaporeandMalaysiaonaroundvoyagescheduleof42days.TheservicealsolinksNorthChineseportsthroughfeederservicesviaShanghai.

iv) SCI Middle East India Liner Express (SMILE) ServiceThenewrestructuredSMILEServicesynergizesSCI’sserviceswithShreyas’sservicesandseamlesslylinksupPersianGulfwithEastCoastofIndiaandWestCoastofIndia,thereby,strengtheningandexpandingSCI’spresenceintheCoastalShippingSector.ThejointoperationonthisroutewillbeaforcemultiplierforSCIwhichwillprovideahighqualityofCoastalServicesonfixeddayfixedwindowbasiswithpotentialforevenbiggerexpansioninCoastalandnearCoastaltradeswithspecialemphasisontheEastCoastofIndiaports.Twoservicesviz.SMILEandPIX2withtheirservicerotationsmakesitfeasibletoconnectpan-Indianportswithanimprovedtransittime.SCIseekstocooperatewithotherIndiancompaniestoworkoutthebesttransportationsolutionsforthetradingcommunityvis-à-viscommercially,economicallyviableandenvironmentallyfeasibleoptions.SCIisalsostrengtheningtheirpositioninthetradebyofferingservicestoandfromYangonwhileconnectingalltheIndianSub-continentportsaswellasMiddleEastports

DIRECTORS’ REPORT


v) India Myanmar Service (IMS Service)SCIlaunchedtheIndiaMyanmarService(IMS)inOctober2014incharteringmv“SCIKamal’a1200teucapacityvesselwhichlinkedtheEastCoastandWestCoastofIndiatoMyanmar.TheservicehadbeeninitiatedattheinstanceoftheGovernmentofIndiainlinewiththeLookEastPolicyandtheMinistryofExternalAffairshadgrantedasubsidyforoperationofthisservicefor6months.Theservicewastemporarilysuspendedon6thNov2015onexpiryofCharterHireagreementofthevesseldeployedthenafterthesubsidyamountwasexhausted.AnadhoccallwashowevermadeduringFebruary2016.SCIwasgrantedadditionalsubsidyforoperationoftheserviceforanotherthreemonths.

vi) Feeder OperationsSCImakesfeederarrangementswith‘CommonCarriers’betweenvariousdestinationsontheIndiansubcontinent.

vii) Slot swap arrangementsSCIentersintoslotswaparrangementswithserviceprovidersdependingupontraderequirements.

viii)Break-Bulk ServicesSCIarrangescarriageofbreakbulkcargoesonspacecharterbasisfromvariousregionsacrosstheglobeincludingUSAandFarEastforimportsonaccountoftheGovernmentdepartments/PSUsandothercommercialorganisationswhichincludesShipmentsofOver-DimensionalCargoes(ODC)/Projectcargoes/HeavyLiftcargoes/IMOClassICargoesetc.andalsocontainers.

ix) Coastal Operations Domestic Passenger–Cum–Cargo ServiceInadditiontoInternationaloperations,SCIwith itsoneownedPassenger-cum-Cargovesselandten(11)managedvesselsoperatesdomesticpassengerandcargotransportationservicesbetweentheMainlandandtheAndaman&Nicobar(A&N)groupofislandsandinter-island,onbehalfoftheGovernmentofIndia.

x) Other Coastal ServicesSCIalsomanagesOceanographic&CoastalResearchvesselsonbehalfofGovernmentagencies/departmentsviz.threevesselsownedbyGeologicalSurveyofIndiaunderMinistryofMinesandonevesselofNationalCentreforAntarctic&OceanResearch,onevesselofCentreofMarineLivingResourcesandEcologyandthreevesselsofNationalInstituteofOceanTechnologyunderMinistryofEarthSciencesandonevesselofDGLL.

3 Manned and Managed VesselsThefollowingtableshowstheprofileofthePassenger-cum-CargovesselsandothervesselsmanagedbyyourCompanyonbehalfofthevariousGovernmentalOrganizations/Departments:

Type of Ships As on 31.03.2015 Additions Nos.

Scrap/ Redelivered(Nos.)

As on 31.03.2016

Nos. Pax. Cap. Cargo Cap. (m.t)

Nos. Pax. Cap. Cargo Cap. (m.t)

Pax-Cum-Cargo Ships

11 7066 6200 0 0 10 7066 6200

Cargo barge 1 500

Other vessels 11 - - 0 1 10 - -

Total 22 7066 6200 0 0 21 7066 6700Thepatternofdeploymentofthesevesselsisasfollows:� Five(5)vesselsforcarryingPassengersandcargobetweentheMainlandandAndamanandNicobarIslands;� Five(5)vesselsandOne(1)CargoBargeforInter-Islandsrun(A&NIslands).� One(1)vesselforForeshoreSectorrun(A&NIslands).

C. MarketingSCI’smarketingteamcontinuestomakeregularcustomercallsthroughitsownofficesandalsothroughagentsappointedatvariousportsinIndiaandabroadinordertomarketitscontainerandbreak-bulkservices.Meetingswiththeagentsareheldperiodically,andSCIrepresentativesalsoparticipateinvarioustrademeetsatimportantlocationsinIndia.Your Company has obtained Freight Forwarding andMultimodal Transport Operator (MTO) licences and continues to use its vastexperienceandlargeagencynetworktorender3PL(ThirdPartyLogistics)servicestothecustomers.ThishelpsyourCompanytoretaintheclientswhilegeneratingadditionalrevenue.

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D. OUTLOOKThegapbetweendemandandsupplyofcontainercapablefleet isexpectedtoclose in2016,asglobalcontainerizedtradevolumesresumea4.4%growthwhilecapacityexpansionmoderatesto5.5%.Accordingly,linermarketsareexpectedtoenjoyareprieveinthesecondhalfof2016andwouldsetthestageforamarketupturnin2017whenthetradegrowthisexpectedtooutpacecorrespondingfleetexpansion.Majorarterialtradesareexpectedtoseehigherfleetutilizationclimbingto90%oncethemarketfundamentalsimprovein the secondhalf of 2016whichwill allow for rate improvements. Liner idle capacity is expected tobe limited, as liner operatorscompeteformarketshareaheadofthereshapingofglobalalliancesatthestartof2017.Slow-steamingpracticesareexpectedtoremainfirmlyinplacewithslow-steamingcapacityabsorbing10%ofthecellularfleetcapacityprovidingarespitetothemarket.Withmarketfundamentalsexpectedtoimprovein2017,linerfleetutilizationisprojectedtoclimbtoabout81%in2017and80%in2018priortomoderatingto79%in2019-2020asthecyclicalupturnintradegrowthabatesandfleetgrowthaccelerates.

E. RISKS & CONCERNSOilandcommodity-exportingeconomiessufferedabigblowin2015consequenttotheslowdownintheChineseeconomyandglutofoilsupplyandaggressiveSaudipricingpoliciesresultingintighteningoffinancialmarketsandstallingofinvestments.CurrenciesinEuropeandAsiaweakenedsignificantlyagainsttheUSDollarandthetradevaluecollapsed.Economicuncertaintyremainsandalowerdriftinthecommoditypricescouldresultincontinuousturmoilinglobalfinancialmarketsleadingtoseveralemergingeconomiessinkingdeeperintorecession.Thesefactorswouldthenleadtomutedglobalcontainerizedtradegrowthlimitedto0.8%in2016whichwouldadverselyimpactthefreightratesandcharterrateswhichwouldaveragetonear2009lowlevelsfallingjustbelowoperatingcostslevel.

F. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCEYourCompany’slinersegmentregisteredalossof`159croresinFY2015-16.TheOperatingIncomereducedinthecurrentyearascomparedtothepreviousyear.YourCompanyadoptedcost-savingmeasurestomitigatelossesaccruingtothelinerservicesviz.savingconsiderablyonfeederandtransshipmentcostsbynotcarryingthecargotonon-baseports,savingonleasingandincidentalcostbyoff-hiringcontainers,blankingoffvoyagesontheINDFEXrouteresultinginlessinlandmovement,changingrotationpatternofISEserviceleadingtolesshaulage.Cargohandlingexpenses,acomponentofthedirectoperatingexpenses,werelowerduetolessernumberofcontainerscarried.ContainerscarriedtoinlandlocationsinEuropeweremainlyonmerchanthaulage.

3. TECHNICAL & OFFSHORE SERVICESI) Global ScenarioTheoffshoreindustry isdependentonutilizationofrigs,oilfieldsandcrudeoilE&Pactivities,whichinturndependsuponstrategicdecisionsofenergysecuritybyoilandgasproducers,shiftsinGovernmentpolicies,demand-supplytrendsincrudeoiltrade,country’simport–exportofcrudeoilandlongtermcrudeoilpricetrends.Theworld’sprimaryenergyconsumptionisprojectedtogrowatanaverageof1.4%p.a.withmajorpartofthegrowthisinnon-OECDcountries,withAsiancountrieslikeChinaandIndiaaccountingfornearlyhalfthegrowth.DuringFY2015-16,BrentcrudepricefellbelowUS$30/barrellevel,forthefirsttimein13years.Aftertouchingnewlow,duringquarterfourofFY2015-16,oilpricesshowedsomebouncewithanupwardmovetowardsUS$40/barrellevelinQ4ofFY2015-16.Itisobservedfromtherigdatathatoutofthetotalavailablerigsworldwideonlyabout60%werecontractuallyoperationalduringFY2015-16.Inlinewiththesame,theworldwideAHTSutilizationdeclinedfromabout66%atthestartofFY2015-16to60%duringendofFY2015-16andPSVutilizationdeclinedfrom75%atthestartofFY2015-16to60%duringendofFY2015-16.In absence of rigs in operation and due to oversupply of offshore vessels in world market the freight / charter hire market foroffshorevesselshasalsobeenunderpressure.Further,thoughthereweresomesignsofrecoveryinoilpricesduringlastquarterofFY2015-16,towardsamarkof$50/barrel,theimprovementonglobalfrontonbothconsumptionandstorageside,seemstooslowtopromptasustainedoilpricerallyinthenear-term.There’sstillariskofdownwardpriceadjustmentin2H2016.Theindustryestimateisthataround30%ofcurrentsupplycomeswithabreak-evenpriceabove$50/barrelandremainingnotmuchbelow$50/barrellevel.DuetothesuddendownwardmovementsinoilpricespostQ3ofFY2015-16,non-operationofrigsanddiminishingE&Pactivities,therewasasuddenfallinbothassetpricesandfreightratesforoffshorevesselsworldwide,theassetspricesandfreightratesfallroughlyaround1/3rdcomparedwith2yearsago.Consideringunderutilizationoffleet,worldwidemanyoffshoreassetownershavereducedtheirofferedratesbelowbreakevencostorclosetobreakevenwithminimalprofitmarginsinordertoavoidlossintermsofDOEandminimizeexpensesonIOEfront.

II) Indian ScenarioHistorically,India’sdomesticproductionofoilandgashasfallenshortofitsburgeoningenergyrequirements,compellingourcountrytorelyonimports.FurtherfallininternationalCrudeOilpriceduring2015-16,ascomparedtoFY2014-15,hassubstantiallyreducedtheburdenofimportingcrudeoilbyover43%intermsofvalueinourcountry.Takinghelpofglobaldeclineinpricesofcrudeoil,Indiahasimportedabout202.1milliontonsofcrudeoilduringFY2015-16forUS$64.4billionascomparedto189.4milliontonsduringFY2014-15forUS$112.7billion.Overtheyears,averageperbarrelrateofIndiancrudeoilimporthasfallenfromUS$105.52perbarrelin2013-14toUS$84.16perbarrelin2014-15toUS$46.17perbarrelin2015-16.ThishasnotonlyresultedinsavingsonimportbillbutthequantityimportedwasincreasedovertheyearsandhencethefallinIndigenouscrudeoilproduction.IndigenouscrudeoilproductionduringendofFY2015-16waslowerby5.1percent(3.1milliontonnes)thaninthepreviousyear.During2014-15,thoughtherewasglobaldeclineinpricesofcrudeoil,howeverthesamehadnotsignificantlyimpactedtheperformance

DIRECTORS’ REPORT


ofIndianE&Pindustryandtheactivitiesofthissectorduring2014-15weremoreorlesssimilartothatofthepreviousyear.However,FY2015-16,hasseenthedrasticfallinfreightratesfortheoffshorevessels,onemajorreasonbeingthataverageperbarrelimportrateforcrudeoilduring2015-16ofUS$46.17isatparwithcostofproduction.Takingbenefitoflowassetspricesworldwide,manyIndianplayersaregoingforassetacquisitionsatlowpricesandsoastosecurefirmbusinesstheyarebreakingearlierlowsoffreightratesinalmostallcategoriesofoffshorevessels.

III) Strengths and Opportunities:SCIhasalwaysfocusedandsucceededinemployingitsvesselsonlongtermbasiswithONGC,whichisthelargestE&PcompanyinIndia.YourcompanyalsohasexperienceinsuccessfullyofferingitsoffshoreservicestoreputedprivatesectorcompaniesinIndiaandabroad.SCIisnowconcentratingonexpansionofitsclientelewithvariousothernationalandinternationaloffshoreoperators.

IV) Weaknesses and Threats:LongtermchartersoftwooffshorevesselsofSCIwithONGChasalreadycometoanendin2016.AlthoughSCIisconfidenttodeploythesevesselsonlongtermbasis,inthemeantimeyourcompanywillhavetofacethevolatilityofthespotmarket.AlloffshorevesselswereemployedonlongtermcharterwithONGCduringthecurrentyear.Hence,therewasnoriskofidling/un-employmentforthesevessels.However,bytheendoftheyear,twovesselshadalreadycompletedtheirlongtermcharter.Hencere-employmentofthemonlongtermcharterisaconcern.

V) OUTLOOK:a) Global Outlook:ThecrudeoilpricesareshowingdownwardtrendandareexpectedtoremainunderpressureduringFY2016-17.ThoughtherewassomeupwardmovementinfirstquarterofFY2016-17,butsameisnotsustainable.Further,withendofIran’ssanctions,globaloiloversupplyisexpectedtobethereforatleastnext1-2yearsandhencethepressureonglobaloilpricesisexpectedtoremainduringFY2016-17also.Thoughthesustained levelof$60/barrel isnot lookingpossible inFY2016-17,butwith thepresentenergyscenario, industryexpertsexpectsustained$60/barrel levelanytimeduringFY2017-18. Industryexpectationsare that theexplorationandproductionactivityworldwidewillpickuponcetheoilpricesreboundtowards$60/barrel.However,considering thesluggishdemandandthepresentoversupplyofoffshoresupplyvessels, theexplorationactivitiesarenotexpectedtopickupduring2016-17andhencetheinternationalfreight/charterhiremarketforoffshorevesselsisexpectedtobeunderpressureduring2016-17also.Further,thelowassetpriceshavecreatedopportunitiesforestablishedplayerstobuynewassetsandemploytheminitiallywithlowerfreightratesbutwithgainfulreturnsfrombalancelifeofthesevessels.b) Indian OutlookIndia’sdomesticproductionofhydrocarbonproducts falls farshortofmeeting theever-risingenergydemandand thus Indiawouldcontinuetoimportcrudeoiltobridgethedemandandsupplygap.Althoughthereductionofglobalcrudeoilpriceswouldhavepositiveimpact on growing Indian economy, self reliance on crude oil production is necessary to insulate India against unforeseenmarketvolatilityaswellasfromenergysecuritypointofview.WithentryofmanylowpricedassetsinIndianmarket,yourcompanyexpectsthatduring2016-17,thedomesticfixturesforoffshorevesselswouldbeonlowersideattightmargins..The competitive market environment has however provided an opportunity to invest into the offshore fleet as the newbuilding /secondhandpricesofvesselshavesoftened.Thesituationisalsofavorableforventuringintospecializedsegmentslikewellstimulationwhichcommandhighercharterratesbyacquiring/convertingsuitableoffshorevessels.Yourcompanyhasbeencloselymonitoringthedevelopmentsintheoffshoresegmentandplanstotakeadvantageofsuitableopportunitiesforincreasingitsmarketshareaswellastodiversifyitsactivitiesinthissegment

VI) OFFSHORE ACTIVITIES:i. SCI owned Offshore vessels:SCI’sownedoffshorefleetcomprisesof3nos.80TAHTSVs,4nos.120TAHTSVsand2nos.PSVs.Allthese9vesselswereonlongtermcharterwithM/sONGCduringtheyear.Outofthese9vessels,twoofthe80TAHTSVsviz,SCIPannaandSCIMuktacompletedtheirlongtermcharterbytheendoftheyear,i.e.SCIPannaon18.03.2016andSCIMuktaon29.02.2016.Thereafter,boththevesselswereofferedinSpotmarkettovariousclients,forgainfulemploymentopportunities.

ii. O&M of ONGC owned vessels:Samudrika series OSVs:YourcompanyhascontinuedtoOperate,Man&ManageONGCownedSamudrikaseriesOSVs.Atthebeginningoftheyear,8nos.SamudrikaseriesvesselswereunderO&McontractwithSCI,afterdisposalof3vesselsduringthepreviousyear.Thereafterduringtheyear2015-16,4morevesselshavebeendisposedoffbyONGC.TheO&Mcontractof remaining4vessels isvalid till theirdisposal,whichisduein2016.

iii. Specialized vessels:Your Company has continued the Operation & Maintenance management (O&M) of ONGC’s 2 Multi Support Vessels (MSVs)(“SamudraSevak”&“SamudraPrabha”)andoneGeotechnicalVessel(GTV)(“SamudraSarvekshak”)onnominationbasisunder

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‘Costplus’arrangement.ThecontractsforO&MofMSVshavenowbeenextendedupto31.12.2016.TheO&McontractforGTVisvalidtill31.03.2018.YourCompanyhasalsocontinuedtheOperation&Maintenancemanagement(O&M)ofONGCownedWellStimulationVessel(WSV)“SamudraNidhi”on‘costplusbasis’sincethevesselsdeliveryinyear1986.Thepresentcontractisvalidtill31.03.2017.

iv. ONGC owned Offshore vessels built at M/s. PDOEC shipyard:ONGChadplacedordersfor12newbuiltOSVsatM/sPipavavDefenceandOffshoreEngineeringCompanyLtd(PDOEC).TheO&Mofthese12vesselshavecontractedtoSCI.YourcompanyhassuccessfullyincludedsevenONGCownedvesselsunderitsfleetofmanagedvesselstilldateofwhichtwoweretakenoverinFY2015-16.Pipavavshipyard.Balance5vesselswillalsobehandedovertoSCIunderO&Mcontractaspertheirrespectiveconstruction&deliveryschedule.

v. Emergency Towing Vessel (ETV) 2014:OnrequestofDirectorateGeneralofShipping(DGS),yourcompanyhadarrangedforservicesofEmergencyTowingVessel(ETV)duringthemonsoonperiodofyear2015.Thevessel“ETVNandKrishna”wasin-charteredbySCIonbehalfofDGSforprovidingemergencyservicesinthemonsoonperiodonWestCoastofIndiaforabout31daysfrom15.08.2015to15.09.2015.

vi. DRDO Project:TheDefenceResearch&DevelopmentOrganization(DRDO),GovernmentofIndia(GOI),MinistryofDefence(MOD)hadrequestedyourcompanyforhiringofthreesupportvesselsasaplatformforship-bornetrackingstationsforflighttrialsovertheBayofBengalandIndianOcean.Yourcompanyhadin-charteredtwosuitablevesselsw.e.f.27.03.2012and05.04.2012.Thecontractforthesevesselshasnowcometoanend.Thecontractfor1stvesselexpiredon18.03.2016and2ndvesselon25.03.2016.YourcompanyisnowintheprocessofacquisitionofsuitableoffshorevesselswhichwouldbeprovidedonlongtermchartertoDRDO,fortheiraboverequirementofnationalimportance.

VII) DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:TheOffshoresegmentrecordedrevenueof̀ 339.55croresin2015-16asagainst̀ 348.91croresin2014-15.Theprofitbeforetaxstoodat`104.01croresin2015-16asagainst`113.10croresin2014-15.Yourcompanyhad9offshorevesselsatthestartoftheyear2015-16asagainst11vessels(9new+2old)atthestartof2014-15.However,therewasnosignificantimpactonrevenueduetobetteroperationalefficiencyofnewvesselsduringFY2015-16.CapacityutilizationofoffshorevesselsforFY2015-16wasat89.38%asagainst87.92%duringFY2014-15.

VIII) Technical Services:i. Technical Consultancy Services:During the year under report the Company continued to provide technical consultancy services to A&N Administration, UTLAdministration,DirectorateGeneral of LightHouses& Light ships,Geological Survey of India, AndamanLakshadweepHarbourWorks(ALHW),UnionTerritoryofDamanandDiuAdministration(UTDD)andotherGovernmentDepartmentsfortheirvariousshipacquisition/retrofitprojects.

ii. Tonnage Acquisition Programme:Theyearunderreportisthefourthyearofthecountry’s12thFiveYearPlan.SCIhadindicatedanoutlayavailabilityof`5,686croresduringthe12thFiveYearPlanperiod,whichhasbeenapprovedbytheGovernment.Duringtheyearunderreport,yourcompanyhadproposedanoutlayof`711.54croretowardsacquisitionofvesselsandinvestmentinJVs.Yourcompanyhadenvisagedacquisitionofsecondhand / resaleoffshorevesselsandLPGcarriersandalso investmentinLNGJV.Tenderswerefloatedforacquisitionofthesevesselsandbytheendoftheyear,thesetendersareinvariousstagesofprocessing.However,pendingfinalizationofthetenders,theoutlayfortheyearcouldnotbeutilisedandthesamehasbeencarriedforwardtotheyear2016-17.Presently,theassetpricesarecomparativelyatlowlevels,hencelookingatthefavourablemarketforsecondhand/resalevessels,yourcompanyisendeavouringtobuysecondhand/resalevesselstoincreasetheIndian/SCItonnageandforimmediatedeploymentinthemarket.Yourcompanyisoptimistictoacquireoffshorevesselsandoiltankers/gascarriersatthisopportunetime,withlowassetpricessoastoexpanditsfleetsize.

iii. Eco-Friendly and Conservation of Energy : Asapolicy,yourCompanyremainedcommittedtoenvironmentalprotectionasperInternationalConventionforthePreventionofPollutionfromShips.Necessarystepshavebeentakentominimizeairpollutionandoilpollutionfromships.Fortheexistingvessels,yourcompanyhaddevelopedaShipSpecificenergyefficiencymanagementplantofurtherimproveandmonitorenergyefficiencyinshipoperations.YourcompanyhasdecidedtoimplementturbochargercutoutdeviceonsomeoftheContainervesselsforoptimizingfuelconsumptionandimprovedlowloadpropulsionengineefficiency.FurthertrimoptimizationhasbeenimplementedonsomeoftheAframaxtankerstoreducefuelconsumptionandimproveoperationalefficiency.

DIRECTORS’ REPORT


YourcompanyhadusedcombustioncatalystinthefueloilsystemforfuelsavingsononeoftheContainervessels.AllenginesbeingfittedonboardaremeetinglatestrequirementofNOxcompliance,InstallationofBallastWaterTreatmentplants,SiltWaterManagement,usageofeco-friendlyrefrigerants,usageofTBTfreepaints,shiprecyclingplan,etcaresomeofthemeasuresshowingyourcompany’scommitmenttoEco-friendlypoliciesandconservationofenergy.

iv. Technology Absorption, Adoption and Innovation : TheSCIhas takenall steps tocomplywith requirementsofThe InternationalMaritimeOrganization’sMARPOLAnnex-VI aimedatControllingAirPollutionandsettinglimitsonEmissionstotheAtmospherefromShips.OnthenewvesselsSCIhasvoluntarilyacceptedhigherthanmandatoryrequirementsonemissionstandards.Yourcompanyhastakentheleadinorderingvesselswithelectronicallycontrolledmainpropulsionenginesandalsoequippedwithballastwatertreatmentplants.ThemainenginesandauxiliariesonboardexistingvesselsinthefleetarebeingmodifiedandequippedtohandlelowsulphurdistillatefuelsinordertocomplywithregulatoryfuelsulphurlimitsinIMOemissioncontrolareas,portsintheEuropeanUnionandportsintheStateofCalifornia.Varioustechnologicalsolutionssuchasturbochargercutoutdevices,trimoptimizationanduseofcombustioncatalystinthefueloilsystemarebeingadoptedtoreducethefuelconsumptionofthevesselstherebysavingsonfuelcostandtotalemissionsfromthevessels.

v. Situation in Coastal operation and Offshore areas:Theinternationalcrudeoilpricesremainedsoftenedduringtheperiodunderreview.TheNorthSearegionhadwitnessedsofteningofratesin2014-15.Similarly,Indianoffshoremarketalsoexperiencedslightsofteningofratesinyear2015-16.ThedownturninforeignoffshoremarketsisexpectedtoresultinmanyforeignflagvesselseyeingforIndianbusiness.WiththeseadditionalvesselsvyingforgainfulopportunitiesinIndia,thecharterhireratesforoffshorevesselsareexpectedtoremainstabletosoftduringthenext1-2years.IntheONGC’songoingtenderforin-charteringoffshorevesselsofvariouscategories,substantialnumberofforeignflagvesselshaveshowninterest.Tosustainthecompetition,yourcompanyisplanningtoacquireadditionalassetsatlowpricesthroughthesecondhand/resalemarket,whichcanimmediatelybedeployedandleadingtoincreaseinrevenueforyourcompany.

vi. Measures taken to improve services and operations :Mostof theoffshorevesselsofyourcompanyhaveutilized theircompensabledowntime insuchaneffectivemanner,soas tohaveminimumchargeableoff-hireduringmostofthemonthsofFY2015-16.Theexperiencegainedindealingwithnumerousnewcustomers/E&PoperatorsisgivingustheconfidencetoexpandfurtherinthechallengingoffshoresectorbeyondtheIndiancoast.Further,yourCompanyisinadvancestageoftakingoverONGCownedtwoMobileOffshoreDrillingUnits(MODUs)undermarinemanmanagementandmaintenancecontract.TheadditionoftheseMODUswillboostearningsandalsomeetCompany’slargertechnicalandcommercialobjective.

4. International Safety Management CellTheSCIhasintroducedtheSafetyManagementSystembysettingupadedicatedInternationalSafetyManagement(ISM)Cell,whichhasdeveloped,structuredanddocumentedproceduresincompliancewiththeInternationalManagementCodeforSafeOperationofShipsandforPollutionPrevention(ISMCode),inaccordancewiththeresolutionA.788(9)oftheInternationalMaritimeOrganization(IMO)andSOLAS,ChapterIX.TheSCIhaslaidthefoundationoftheSafetyManagementSystem(SMS)byrecognisingthatthecornerstoneofgoodSafetyManagementisacommitmentfromthetopmanagement,coupledwiththecompetence,attitudeandmotivationofindividualsatalllevels,thatdeterminestheexpectationsofagoodSafetyManagementSystem.TheSCIhascompliedwithallthefunctionalrequirementsoftheISMCode,whichincludestheSafety,OccupationalHealth&EnvironmentProtectionPolicyandDrug&AlcoholPolicy.5. Implementation of ISM Code for Phase-I and Phase-II VesselsPresentlySCIholdsseparateDocumentofComplianceCertificates(DOC)forindividualship-typesasunder:� BulkCarriers� OilTankers&GasCarriers� PassengerShips� OtherCargoShipsUnderPhaseI(BulkCarriers,OilTankers,GasCarriers&PassengerShips),theDOCwasendorsedon21.01.2016andisvalidtill18.11.2017subjecttoperiodicalverificationbytheAdministration.UnderPhaseII(OtherCargoShips–LinerandOffshoreVessels),theDOCwasrenewedandissuednewDOCon07.03.2016andisvalidtill14.03.2021.

DIRECTORS’ REPORT

34

LNGShipsDOCendorsedbyBVon18.08.2015andisvalidtill26.05.2019.AsregardsSafetyManagementCertificate(SMC)forSCIfleet,allshipsareputupforperiodical/renewalSMCauditswithintimeframeandrespectiveSMCsareaccordinglyendorsed.Also,therequirementsofvariousamendmentstoISMCodeandStatutoryregulationsfromIMO/Flagarealsocompliedwith.6. ISPS CellTheISPSCode(InternationalShip&PortFacilitySecurityCode)wasadoptedbytheIMOinDecember2002andbecamemandatoryfrom1stJuly2004.TheSCIhassuccessfullyimplementedtheISPSCodeonallvesselsoninternationalvoyagesandthevesselswhichinterfacewiththevesselsoninternationalvoyages,wellaheadofthedeadlineof1stJuly,2004.TheSCIhascompliedwithISPSCodeonallitscoastalshipsincludingsmallpassengershipslessthan500GT(MSnotice19of2011),whichareregisteredinIndia.OnanSCIship,theChiefOfficeristhedesignatedShipSecurityOfficerbutallDeckOfficers,havebeenimpartedapprovedShipSecurityOfficer’straining.Additionally,engineerOfficers,asandwhenavailable,arealsobeingputthroughtheabovecourse.SCIiscommittedtothefollowingobjectivestofulfilltherequirementsofitssecuritypolicy:� Securityofitsshipsandtheircrew,passengersandcargo� SupporttoitsshipsinimplementingandmaintainingtheShipSecurityPlan.

7. Integrated Management System (IMS) Compliance with Integrated Management System (IMS) (ISO 9001:2008 – Quality Management System, ISO 14001:2004 – Environmental Management System and OHSAS 18001: 2007 – Occupational Health and Safety Management System) CertificationTheSCIhadsetatargetforcomplianceofIMS(QMS9001:2008,EMS14001:2004andOHSAS18001:2007)inSCIforallestablishmentsandshipsbywayofIMSCertificationauditbefore25thFebruary,2016.SCIimplementedthesameandwasawardedtheIMScertificationon23rdDecember,2015,wellbeforethedeadline.8. PERSONNEL & ADMINISTRATIONi) Fleet PersonnelDuringtheyear,yourCompany,likeothershippingcompaniesallovertheworld,hasbeenfacingshortageoffleetofficersmainlyintheseniorranksformanningofourvessels.Inordertoattractgoodofficers,thecompanyhasconstantlyalignedthesalaryofSeafarerswiththemarketbesidestakingotherwelfaremeasures.Asalongtermsolution,yourCompanyhascontinueditsthrustintrainingtoincreasethesupplyoftheofficers.Yourcompanyhastrainedover400nauticalandengineeringcadetsduringtheyear.ThecompanyforeseesthesupplyofseniorNavigatingandEngineeringOfficerstobegraduallyimprovingincomingyearsbutthesituationwillcontinuetoremaincriticalinshortterm.Onratingssideexceptformismatchinsomeisolatedcases,thereisnoshortage.To promote and encourage the culture of safety on your ships, your company continued to felicitate your shipswith “Fleet SafetyAwards”.Theawardfunctionfortheyear2015wasorganizedon08thJuly,2016atourinstitute,MaritimeTrainingInstitute,Powai.Theawardswereconferredunderelevencategoriesevaluatedonvariouscriteriaofsafetyandperformancewhereinthesafestshipsfromamongstthecompany’svariedfleetofvesselswerefelicitated.

ii) Maritime Training InstituteYourCompany’sTrainingCentreattheMaritimeTrainingInstituteatPowai,Mumbaihasconducted429Coursesfor9288participantsandthetotalman-daystrainedduringthisyearis94499.Theseincluded81247man-daysforSCI’spersonneland13253man-daysforpersonnelfromothercompanies.Inadditiontothis,134ofSCI’spersonnelweretrainedoutsideMTIandtheadditionalman-daysoftrainingare602.Everyendeavourismadetoensurethatourtraininginstituteisselfsustaining.Regularseminars,professionaldevelopmentprogramsandskillenhancementprogramsarebeingconductedforallranksofofficers,pettyofficersandratingstoenhancetheircompetenceandbuildasenseofbelonginginthemtowardsthecompany.Yourcompany,inordertoenhancecapacitybuildinginmaritimeeducation,hasincreasedtheintakeinitsGraduateMarineEngineers(GME)Coursefrom40to80andinitsDiplomainNauticalScience(DNS)Coursefrom200to280.YourcompanyalsocommencedtrainingofseafaringofficersinElectronicChartDisplayandInformationSystem(ECDIS),ageographicinformationsystemusedfornauticalnavigation.

iii) Shore Personnel Thetotalmanpowerason01.07.2016is778excludingCMD,FourFunctionalDirectorsandCVO,outofwhich672areofficersand106arestaffmembers.Varioustrainingprogrammes,bothin-houseandoutside, includingGeneralManagementTrainingprogrammehavebeenimpartedtoemployeesfordevelopmentofskillsetsandknowledge.

iv) Women RepresentationYourcompany iscommitted to theprincipleofequalemploymentopportunityandstrives toprovideemployeeswithawork freeofdiscriminationandharassmentwhich isapplied inallPersonnelactivities includingbutnot limited to recruitment,hiring,placement,promotion,transfer,separation,compensation,benefitsandtrainingandhaveensuredequalopportunitiesforskillenhancementand

DIRECTORS’ REPORT


careerprogression.Yourcompany’seffortsarereflectedintherepresentationofwomenacrossvariousgradesinthehierarchy.Atpresentwomenconstitutearound21%oftotalworkforceatshoreestablishmentsofyourcompany.YourcompanyistheonlyShippingcompanyinIndiawhichhasbeenrecruitingwomeninitsfleet.Presently,twoMasters,sevenChiefOfficers,23second/thirdofficersandoneFourthEngineerarewomenservingonthefleetofshipsofyourcompanywhichisamongthehighestinthemarineworkforceworld-wide.Your company encourages active involvement in the activitiesof the ForumofWomen inPublicSector (WIPS) since its inception.WIPS,WesternRegion,undertheaegisofSCOPEhasappreciatedyourcompany’seffortsbyconferringthe“BestEnterpriseAward(Consolation)”underMahanavratna–NavratnaCategory.

v) Implementation of Official Language PolicyYourCompanyconstantlymadeall-outeffortsduringtheyeartowardsthespreadofOfficialLanguageHindiinitsoffices.YourCompanynotonlycompliedwiththeHindiimplementationguidelinesissuedbytheGovernmentofIndia,butalsoorganizedHindicompetitions,viz.Noting&Drafting,ExtemporeSpeech,Sulekhan,Crosswordcompetitionsataregularintervaltocreateaconduciveambience.Ahalf-dayHindiUnicodecomputerworkshopsonamonthlybasiswerealsoconductedtogiveconfidencetotheemployeestoworkprogressivelyinHindi.With a view to promote and popularize theHindi language amongst employees, two issues of a bi-annual Hindi e-magazine, viz.“E-Jagriti”werecirculatedinsoftcopyviaemailandalsoplacedonSCIEmployeeswebportalduringtheyear.Outofthese,oneissuewasfullydedicatedtothecleanlinessdrivesconductedbyyourCompanypursuingthe“SwachhBharatMission”ofthecountry.YourCompanyhasalreadyintroducedaQuarterlyIncentiveSchemefordoingHindicorrespondenceforitsemployeessoastoachievethetargetsetforthepurpose.YourCompanyalsoorganizedaHindiSeminaron“CommercializationofLanguagesinthewakeofGlobalization”fortheemployeesofTownOfficialLanguage ImplementationCommittee(TOLIC)memberorganisations inMumbai.On theoccasionof“HindiDay”,aLinguisticHarmonyCulturalProgrammewasalsostaged.YourCompanyalsoparticipated inTOLICmeetingsduring theyearunderreport.

vi) Reservation PolicyYourcompanyiscomplyingwithallgovernmentguidelinesasapplicablefromtimetotimeinrespectofreservationpolicy.

vii) SC/ST/OBC REPORTAnnualStatementshowingtherepresentationofSCs,STsandOBCsason31stMarch2016andnumberofappointmentsmadeduringtheprecedingcalendaryear:

Name of the Public Enterprise: The Shipping Corporation of India Ltd.Groups Representation of

SCs/STs/OBCs (As on 31.3.2016)

Number of appointments made during the calendar year 2015By Direct Recruitment By Promotion By Deputation/

AbsorptionTotal no. of employees

SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Executives

A 680 137 54 87 61 16 1 7 50 10 5 4 2 0NonExecutives

B 85 28 4 3 0 0 0 0 0 0 0 0 0 0C 24 7 1 0 0 0 0 0 0 0 0 0 0 0D 1 0 0 0 0 0 0 0 0 0 0 0 0 0Total

(ExecutivesinGrade‘A’plusNon-executives) 790 172 59 90 61 16 1 7 50 10 5 4 2 0

viii)Corporate Social ResponsibilityTheCorporateSocialResponsibilityvisionofyourcompanyarticulatesitsaimtobeacorporatewithitsstrategies,policiesandactionsalignedwithwidersocialconcerns,throughinitiativesineducation,publichealth,environmentandotherareasofsocialupliftment.Yourcompanyhasaligned itsCSRpolicywiththeCompaniesAct2013andCompanies(CSRPolicy)Rules,2014notifiedtherein”.However,yourcompanycouldnotconstituteCSRCommitteerequiredundersection135ofCompaniesAct2013duetounavailabilityofIndependentDirectors.SinceyourCompanymadeprofitofRs.200.9Croresonlyin2014-15ofthelastthreeprecedingfinancialyears,contributiontowardsCSRcouldnotbemadewithinthemeaningoftheCompaniesAct.TheCSRPolicyisavailableonourwebsite:www.shipindia.com

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36

ix) AWARDS & ACCOLADESYourcompanyishappytoreportthatitseffortshavebeenrecognisedatvariousNationalandInternationalLevels.Yourcompanyhasbeenawardedwithfollowingprestigiousawardsduringtheyearforitsinitiatives,commitmentandpioneeringwork.1. SpecialJuryAwardpresentedtoSCIon21stAugust2015atTheGatewayAwards2015inrecognitionoftheeffortsinevacuation

ofIndianfromstrifetornYemen.2. Winnerof‘ShipowneroftheYear- Indian’presentedtoSCIatthe6thAll IndiaMaritimeandLogisticsAwards2015on04th

September2015.3. ‘MostCompassionateEmployerofIndianSeafarers’AwardpresentedtoSCIatNationalMaritimeDayCelebrationson05thApril

2016.4. ‘The IndianShippingCompanywithHighestGrowthof IndianFlagvessels’AwardpresentedtoSCIatNationalMaritimeDay

Celebrationson05thApril2016.5. AwardbyMinistryofShippingpresentedtoSCIforOutstandingworkintheimplementationofOfficiallanguage,2016.6. ‘OrganisationwithInnovativeHRpractices’AwardpresentedtoSCIbyAsiaPacificHRMCongressAwards.

9. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005)AsuitablemechanismhasbeenputinplacefordealingwiththerequestsandappealsunderRTIAct2005.TheRTImanualispostedontheCompany’swebsite.YourCompanyhasbeencomplyingwiththeprovisionsoftheActwithinthestipulatedtimelimitprovidedundertheAct.Ason31.03.2016,yourCompanyhasdisposedoffmostoftheapplicationsandappealsreceivedfromtheparties.10. Policy to Prevent Sexual Harassment in Workplace.SCIendeavourstopromotegenderequalityandhasbeentakingproactivemeasurestopreventanySexualHarassmentinworkplace.AcommitteehasbeenconstitutedcomprisingseniorwomenexecutivesofSCIandaladyrepresentativefromtheNGOPrathamtopreventanySexualHarassmentintheworkplace.Yourdirectorsarehappytostatethatnocasesofsexualharassmenthavebeenreportedduringtheyearended31stMarch2016.11. JOINT VENTURE COMPANIESi) India LNG Transport Companies:IndiaLNGTransportCompaniesNo.1&2LtdaretwoJointVentureCompaniespromotedbytheCorporationandthreeJapanesecompaniesviz.M/sMitsuiO.S.KlinesLtd(MOL),NipponYusenKabushikiKaishaLtd(NYKLines)andM/sKawasakiKisenKaishaLtd(KLine)alongwithM/sQatarShippingCompany(QShip),Qatar.SCIandMOLarethelargestshareholders,eachholding29.08%share.Thesharesheldbyalltheshareholders,includingthatbytheCorporationareheldinthetwocompaniesarepledgedagainstloansprovidedbythelenderstotheseCompanies.EachofthetwoCompaniesownandoperateoneLNGtankernamedasSSDishaandSSRaahirespectively.SCIismanagingtheentireoperationofthetwoshipsfrom2009.IndiaLNGTransportCompanyNo.3Ltd is the3rdJointVentureCompanywhichownsandoperatesoneLNG tankerMTAseem.TheCompany ispromotedby theCorporationand its threeJapanesepartnersviz.MOL,NYK lines,KLinealongwithQatarGasTransportCompany(QGTC)andM/sPetronetLNGLimited(PLL)whoaretheotherpartners.SCIandMOLarethelargestshareholderswith26%shareeach.ThesharesheldbytheCorporationandotherpartnershavebeenpledgedagainstloansbylenderstothesecompanies.SCIismanagingtheentireoperationoftheshipfromApril2013.IndiaLNGTransportCompanyNo.4Pvt.LtdisaCompanyincorporatedinSingaporeinNovember2013andispromotedbytheCorporationwithitsthreeJapanesePartnersviz.MOL,NYKLineandKLine.SCI,MOLandNYKhold26%shareeach.TheCompanyisconstructingoneLNGtankerof173,000CBMwhichitwouldownandoperateundera19yearTimeCharterAgreementwithcharterersM/sPLLTheTankerisexpectedtobedeliveredinNovember2016andislikelytobeoperatedtotransportLNGfromGorgonTerminalAustraliatoKochi&DahejinIndiaonaccountofPLL.KeellayingofthefourthLNGJVTankerLNGC“Prachi”washeldatHyundaiHeavyIndustries,SouthKoreaon20.07.2015.Thelaunchingofthevesselwasheldon27November,2015.ThevesselisplannedtoconductseaandgastrialsfromendJuneto1stweekofSeptember,2016.ii) SAIL SCI Shipping Co. Pvt. Ltd.SAILSCIShippingCo.Pvt.Ltd(SSSPL),aJVCbetweenSCIandSAILwasincorporatedwiththeprimaryobjectiveofprovidingvariousshippingrelatedservicestoSAILforimportingcokingcoalandotherbulkmaterialfromvariouscountriestofeeditssteelplantslocatedinIndia.TheJVCwasincorporatedon19thMay2010.Owingtothedepressedbulkcarrierfreightlevels,theJVCisunabletoacquirevessels.FurtherviewisbeingtakenwithregardtovoluntarydissolutionoftheJointVentureCompany.iii) Sethusamudram Corporation Ltd.TheGovernmentofIndiahadconstitutedSethusamudramCorporationLimited(SCL)toraisefinanceandtoundertakeactivitiestofacilitateoperationofanavigablechannelfromGulfofMannartoBayofBengalthroughPalkBay(SethusamudramShipChannelProject).AspertheGovernmentdirective,thisprojectistobefundedbywayofequitycontributionsfromvariousPSUsincludingtheSCI.AsonFY2015-16,

DIRECTORS’ REPORT


SCIhadinvestedRs.50croreintheproject.Worksuspendedsince17.9.2007consequenttoaninterimstaybytheHon’bleSupremeCourtforcarryingoutdredgingoperationsinAdam’sbridgearea.Pendingafinaldecisiononalternativealignment,allthedredgerswerewithdrawnsince27.07.2009.SSCPcasewaspostedforhearingon26.11.2015butthecasewasadjourned.Theargumentonbothsidesisyettobecommenced.Thenexthearingdateontheabovecasesisyettobeannounced.iv) Irano Hind Shipping Co.:WiththeliftingofUNsanctionsimposedonIran,thefeasibility&revivalofJVCisbeingconsideredbasedonviableoperationsofthevesselsownedbythecompanyMemorandum of Understanding (MOU) with the Ministry of ShippingYourCompany’sperformancebasedonauditedresultsundertheMOUsystemhasbeenratedas“VeryGood”fortheyear2014-15.SCIhasfinalizedtheMOUforFY2016-17aspertheguidelinesissuedbytheDepartmentofPublicEnterprise(DPE)incorporatingperformancetargetsinsyncwiththechangingdynamicsoftheshippingscenarioandsignedtheMOUforFY2016-17withtheMinistryofShippingon2ndAugust2016.12. Details of shares lying unclaimedThedetailsofthesharesissuedpursuanttoFPOremainingunclaimedandlyingintheescrowaccount,thevotingrightsofwhichshallremainfrozentilltherightfulownerofsuchsharesclaimstheshares,aregivenasunder:

Sr. No.

Details No. of Shareholders

No. of Shares

1Aggregatenumberofshareholdersandtheoutstandingsharesinthesuspenseaccountlyingason01.04.2015

4 436

2 Numberofshareholderswhoapproachedfortransferofsharesfromsuspenseaccounttill31.03.2016 0 03 Numberofshareholderstowhomsharesweretransferredfromsuspenseaccounttill31.03.2016 0 0


4 436


4 436

AnAmountof`15,56,634/-w.r.t.53applicantshasbeenlyingunclaimedintheRefundAccount.ThedetailsofthesamehavebeenplacedonSCIwebsite.13. Utilization of FPO ProceedsDuringtheyear2010-11,yourCompanyhadcomeoutwitha“FurtherPublicOffer”,(FPO),comprisingofa‘freshissue’of42,345,365equitysharesinyourcompanyandan‘offerforsale’of42,345,365equitysharesbythePresidentofIndia.TheFPOproceedsof`58245lakhswerefullyutilizedinthefinancialyear2011-12asperobjectoftheissueforpartfinancingofcapitalexpenditureonnineshipbuildingprojectsspecifiedforutilization.However,duetodelaysintheprojectsresultingindefaultbytheshipyards,duringtheperiodJanuary2014toMay2014,yourCompanyrescindedcontractsforfourshipbuildingprojectsandalso,re-negotiatedtheinstalmentspaidfortwoprojectsinordertocompressthesameagainstasingleproject.TheinvestmentintherescindedcontractsoutoftheFPOProceedswas`330.65crores.YourCompanyhastilldatereceivedback`330.65croresofthesefundsfromtheshipyards.Theshareholdersvidetheresolutionpassedthroughpostalballotprocesson14.01.2015approvedtheproposaltore-deploythesaid`330.65croresreceived/tobereceivedasrefundfromShipyards,towardsvariousshipbuildingprojectsincludingoffshoreassets(includingbutnotlimitedtoanchorhandlingtugsupplyvessels(AHTSVs),platformsupplyvessels(PSVs),rigs,etc)andliquidpetroleumgas(LPG)vessels.YourCompanyproposestoinvesttheproceedsjudiciouslyattheappropriatejunctureduringFY2016-17.14. Segment-wise PerformanceAreportonperformanceof thevariousoperatingsegmentsof theCompany(audited) is includedatNoteNo.34ofNotesonFinancialStatements(Standalone)fortheyearended31stMarch2016,whichisformingpartoftheAnnualAccounts.15. Internal Control System“InternalControlSystemsinyourCompanyarebeingmonitoredandcontinuouslyimprovedtomeetthechallengesthatarisefromtime-to-timewiththenatureandsizeoftheoperations.AnnualAuditPlanisapprovedbyAuditCommittee/FinanceCommitteeoftheBoard.InternalAuditsarecarriedoutbyanindependentfirmofCharteredAccountants,viz.,M/s.T.R.Chadha&Co.LLPonconcurrentbasis.TheInternalAuditReportsaresubmittedonquarterlybasistogetherwithcomments,recommendationsanditscompliance,whicharebeingconstantlyreviewedanddeliberatedbyaFinanceCommitteeappointedbytheBoardintheabsenceofAuditCommittee.”16. Dividend Distribution PolicyTheDividendDistributionPolicyofSCIseekstorewarditsshareholdersfortheirtrust&investmentinCompany’sbusinessobjectives.ThedeclarationandpaymentofdividendwillberegulatedbytheCompaniesAct2013&Govt.ofIndia’sguidelinesasamendedfromtimetotime.ThequantumofdividendpaymentswilldependonannualconsolidatedProfits,fundrequirementforcompany’sexpansionplans,presentandanticipatedfuturebusinessenvironmentwithspecial reference toShipping Industryandvariousother factors impactingcompany’s

DIRECTORS’ REPORT

38

performance.Thedividenddistributionwillalsobesubjectedtorestrictions/conditionsifany,imposedbylenders,ordersofCourtsand/orstatutorybodies.17. ROLE OF VIGILANCE DIVISION IN SCIDuringtheyearunderreview,theChiefVigilanceOfficercontinuedtoensuretheintegrationofpreventivevigilanceinitiativesinthebusinessprocessthusstrivingtowardshigherethicalstandardsandimprovedcorporategovernancestandardstowardsachievingthestatedobjectiveofmaking your Company corruption-free. Vigilance Division achieved a proper balance between preventive and punitive vigilance andsimultaneouslyensuredgoodandethicalcorporategovernance.Technology has been leveraged for achieving greater transparency and for eliminating systemicweaknesses through implemented andongoinginitiativessuchase-payments,promotingonlineregistrationofcomplaintsviatheVigilanceWebpagecontainedintheSCIwebsite;migrationtoSupplierRelationshipManagementplatformforallprocurements;disseminationofimportantcirculars/guidelinesonthewebpageetc.ThiswasthefirstyearinwhichtheemployeessubmittedtheirAnnualPropertyReturnonline.VigilanceDivisionhasbeenpropagatingthecultureoflodgingofcomplaintsunderthePublicInterestDisclosureandProtectionofInformers’Resolutions(PIDPR-popularlyknownasWhistleBlowersResolution)wherebytheidentityofthecomplainantwouldbekeptsecretandhe/shewouldbeprotectedfromvictimization.VigilanceDivisioncontinuedto interactwithvariousemployeesofSCIaswellasvariousstakeholders includingSuppliers,ShipRepairWorkshops,Vendors,Contractorsetc.whichhashelpedinunderstandingtheissuesfromtheirperspectiveaswell.i) Activities of the Vigilance Division carried out in 2015-16:Theimportantactivitiesthatwerecarriedoutin2015-16bytheVigilanceDivisionwereasfollows:-• Investigationsintocomplaintsofcorruption/malpracticewereconducted.• RandomscrutinyofAnnualPropertyReturns(APRs)• ActivemonitoringoftheimplementationofIntegrityPactinSCIwiththescopeexpandedfromcoverageofdomesticprocurementand

servicescontractstocoverageofprocurementofgoodsandservicesfromforeignvendorsandforeigndry-docks.• Actedasacatalyst in the implementationofpreventive vigilancemeasuresbyyourManagementsuchase-payments,bill tracking

systems,phasedtransfersofemployeespostedinsensitiveareasetc.• Conducting surprise and periodic inspections, CTE type inspections, conducting Systems Studies and recommending systemic

improvements.• SelectivescrutinyofVoyageRepairsBills,majorworks,dry-dockingbills,variousaccounts.• EnsuringtrainingofVigilanceOfficersbothonvigilancerelatedsubjectsaswellasgeneralmanagement.• Impartingtrainingtofreshrecruitsonvigilanceissues.• FortheannualVigilanceAwarenessProgramme,apartfromin-houseprogrammes,majoremphasiswasplacedonreachingouttoyouth

throughvariousprogrammesinschoolsandcollegesasdesiredbytheCentralVigilanceCommission.• AnannualNewslettertitled“SCIVoyager”isalsobroughtoutontheoccasionofVigilanceAwarenessWeek.Thisisbeingdonewitha

viewtospreadingvigilanceawarenessamongstemployees.ii) Vigilance Study Circle Mumbai Chapter:TheVigilanceStudyCircleMumbaiChapterwasstartedontheinitiativeofSCIVigilanceDivisionon16-08-2010.ItcontinuestospreadVigilanceawarenessanddeveloptheknowledgeandskillsofVigilanceProfessionalsandprovidesanidealplatformfortheChiefVigilanceOfficersofMumbaibasedPSUs,Banksetc.tomeetandexchangetheirviews/experiences,etc.onaregularbasis.iii) IMS Certification for Vigilance Division of SCI as a part of corporate IMS:YourcompanydecidedtoimplementIntegratedManagementSystemin2015.AsapartofSCI’scorporateassessmentforIMS,theVigilanceDivisionwasalsoauditedbyIRQS.VigilanceDivisionisthusapartofthecorporateIntegratedManagementSystemfortheQualitystandardISO9001:2008,fortheEnvironmentalstandardISO14001:2004andOccupationalHealthandSafetystandardOHSAS18001:2007.iv) Integrity Pact in The Shipping Corporation of India Ltd.:SCIhassignedaMemorandumofUnderstanding(MoU)withTransparencyInternationalIndiafortheadoptionofIntegrityPact.BysigningtheMoU,yourCompanyiscommittedtohavemostethicalandcorruptionfreebusinessdealingswiththecounterpartieswhethertheyarebidders,contractorsorsuppliers.The‘thresholdvalue’forimplementationofIntegrityPactindomesticgoodsandservicecontractsis`1crore.Thus,anygoods/servicescontractof`1croreandabovewillbehavingIntegrityPacttherebyassuringtheconcernedpartiesofthetransparentandethicalpracticesinSCI.Duringtheyearunderreview,theIntegrityPactwasmonitoredbyapanelof2eminentIndependentExternalMonitors(IEM)s.MeetingswereheldperiodicallywiththeIEMstoreviewtheprogressofimplementationofIntegrityPactinSCI.18. UNGC complianceYourcompanyisasignatorytoUNGlobalCompactinitiativewhichsignifiesourcommitmenttoupholdthetenprinciplesofGlobalCompacton protection of human rights, prevention of child labour, protection of environment & anti corruption initiatives. Your company is anequalopportunityemployeranddoesnotdiscriminateongroundsofsex,religion,caste,creed,coloretc.Thefreedomofassociationis

DIRECTORS’ REPORT


recognisedandvariousFORAsareencouragedtoeffectivelyparticipateonissuespertainingtowelfareofemployees.Fairlabourpracticesarefollowedanditisensuredthatnochildlaborisdirectly/indirectlyemployed.Yourcompanyiscommittedtodobusinessconsciouslyandresponsiblysettingsustainablesystemstoprotecttheenvironment.Yourcompanyensurestransparency,equityandcompetitivenessinpublicprocurementthroughvariousinbuiltmechanismandanticorruptioninitiatives.19. Remuneration PolicyTheremunerationtotheseniormanagementandothershoreemployeesofyourcompanyisgovernedbythePresidentialDirectivesanddirectivesoftheMinistryofShippingissuedfromtimetotime,whichformtheremunerationpolicyofyourcompany.20. Cautionary StatementThestatementsmadeintheManagementDiscussion&AnalysisdescribingCompany’sobjectives,projections,estimatesandexpectationsmaybe“forward-lookingstatements”withinthemeaningofapplicablelawsandregulations.Actualresultsmightdiffermateriallyfromthoseexpressedorimplied.21. Board of Directors Dr. (Ms.)T. Kumar, Special Secretary and Financial Advisor (Ministry of Shipping) ceased to be aDirector on theBoard of SCI due tosuperannuationwitheffectfrom31.08.2015andShriSanjeevRanjan,AdditionalSecretary&FinancialAdvisor(Shipping)wasappointedasDirectorontheBoardofSCIwitheffectfrom21.09.2015.Capt.SunilThapar,Director(BulkCarrierandTanker)ceasedtobeaDirectorontheBoardofSCIduetosuperannuationon30.09.2015,subsequenttowhichShriS.V.KherwasappointedasDirector(BulkCarrierandTanker),on01.10.2015.ShriA.K.GuptaceasedtobetheChairman&ManagingDirectorontheBoardofTheShippingCorporationofIndiaLtdon31.12.2015duetohissuperannuation.Capt.B.B.Sinha,Director(P&A)holdsadditionalchargeofChairmanandManagingDirectorw.e.f01.01.2016.ShriArunBalakrishnanandShriSukamalChandraBasuwereappointedasNonOfficialPartTimeDirectors (IndependentDirectors)on30.03.2016and26.05.2016respectively.22. Declaration of Independence TheCompanyhasreceivedDeclarationfromIndependentDirectorsconformingthattheymeetthecriteriaofIndependenceasprescribedunderCompaniesAct2013,theSEBI(listingObligationsandDisclosureRequirements),Regulations2015&DPEguidelines.23. Auditors Report1. Theauditorsintheirauditreportfortheyearended31stMarch2016havebroughtoutthat;a) Thedirectaccessofoverseasforeignagentstofundcollectedonaccountoffreightandotherchargesintheabsenceofadequatebankguaranteesincomparisontonetoutstanding,anypolicyonfixationofcreditlimitsbasedonvariousparameters&factorsandregularmonitoringmechanismispronetoriskofnon/shortpayment,theconsequentialeffectofwhichonthestatementofprofitandlossremainsunascertainable.

b) VesselDeshShobhaacquiredintheyear2012-13wasundercapitalizedby3.50millionUSDandtheprovisionforinterest@2.5%paonthisamounthasnotbeenmadeintheaccountsfromtheyear2012-13.Thishasresultedinunderstatementoffixedassetsby`20.28crores,overstatementofprofitsby`4.98croresandunderstatementofliabilityof`25.25Cr.

Themanagement’sviewsontheaboveobservationsareasbelow:a) TheBankGuarantees(BG)aretakenfromtheAgentsasperthedefinedCompanyNormsinordertomitigaterisksincaseofdelays/defaultinnon-paymentoffreightbeyondstipulatedperiod.BGscannotcoverentirebusinessrisk.TheseBGsarereviewedonannualbasistoensuretheiradequacyintermsofthecompanypolicy.SCIisacommercialorganisationengagedintransportationofcargoandcreditperiodgiventotheAgentsforfreightcollectionsisasperlocaltradepracticesprevailinginrespectivecountries.Furthercreditworthinessoftheagentsisreviewedeverythreeyearsbasedontheirauditedfinancialstatements.Thereisanonlinesystemformonitoringoftheoutstandingfromtheagentswhichprovidesystemreports.Thesereportsareusedforregularfollowupwiththeagents.

b) SincetheaccountsforFY2012-13havealreadybeenauditedbythestatutoryauditorsaswellasbytheC&AGandapprovedbytheBoard;theissueofundercapitalizationofDeshShobhain2012-13isbeingreferredtoBoardforitsconsideration.DependingontheBoarddecision,necessaryaccountingentries,ifrequired,willbepassedinthebooksinFY2016-17.PendingBoarddecision,[email protected]%patill31.03.2016onUSD3.5millionamountingto`2croresisshownascontingentliability.Inviewofforegoing,thereisnoimpactontheprofit,networth,totalassetsandEPSofCompanyintheFY2015-16asthenecessaryaccountingtreatment,ifrequired,willbegiveninthenextfinancialyear.

24. Secretrial AuditPursuanttoSection204oftheCompaniesAct,2013andtheCompanies(AppointmentandRemunerationofManagerialpersonnel)Rules,2014,theBoardhasappointedMr.UpendraShukla,PracticingCompanySecretarytoconducttheSecretarialAuditfortheCompanyforFinancialYears2015-16and2016-17.TheSecretarialAuditreportfortheFY2015-16isappendedtotheDirector’sReport.Thesecretarialauditorinhisreportfortheyearended31stMarch,2016hasboughtoutthat:

� TheCorporationhascompliedwiththerequirementsofCorporateGovernanceasprovidedunderClause49oftheListingAgreement,

DIRECTORS’ REPORT

40

SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 andDPEGuidelines on Corporate Governance,withtheexceptionofappointmentofIndependentDirectorstotheextentof50%ofthetotalstrengthoftheBoard.ItisclarifiedbytheCorporationthatthematterisbeingpursuedwiththeAdministrativeMinistryforappointingrequirednumberofIndependentDirectorsontheBoardandhence,AuditCommittee,Nomination&RemunerationCommittee,Stakeholders’RelationshipCommitteeandCSRCommitteecouldnotbevalidlyconstituted.”� TheBoardofDirectorsoftheCompanyisconstitutedaspertheClause49oftheListingAgreementandSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015withbalanceofExecutiveDirectorandNon-ExecutiveDirectorswiththeexceptionofappointmentofIndependentDirectorstotheextentof50%ofthetotalstrengthoftheBoard.ItisclarifiedbytheCorporationthatthematterisbeingpursuedwiththeAdministrativeMinistryforappointingrequirednumberofIndependentDirectorsontheBoard.ThechangesinthecompositionoftheBoardofDirectorsthattookplaceduringtheyearunderreviewwerecarriedoutincompliancewiththeprovisionsoftheAct.

Themanagementviewsontheaboveobservationareasfollows:� Pursuanttoletterdated21.03.2016fromTheMinistryofShippingShriArunBalakrishnanandShriSukamalChandraBasuwereappointedasIndependentDirectorsonBoardofSCIon30.03.2016and26.05.2016,respectively.OnappointmentofIndependentDirectors, the statutory committees viz. Audit Committee, Nomination & Remuneration Committee, Stakeholders’ RelationshipCommitteeandCSRCommitteewereconstitutedbytheBoardofDirectorson26.05.2016.

25. Corporate GovernancePursuanttotheSEBI(ListingObligations&DisclosureRequirements)Regulations,2015,reportonCorporateGovernanceisattachedtothisReport.26. Directors’ Responsibility StatementPursuanttotherequirementunderSection134(5)oftheCompaniesAct,2013,withrespecttoDirectors’ResponsibilityStatement, it isherebyconfirmed:� Thatinthepreparationoftheannualaccountsforthefinancialyearended31stMarch2016,theapplicableaccountingstandardshadbeenfollowedalongwithproperexplanationrelatingtomaterialdisclosures;

� ThattheDirectorshadselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitorlossoftheCompanyforthatperiod.

� ThattheDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,2013forsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities.

� ThattheDirectorshadpreparedtheaccountsforthefinancialyearended31stMarch2016ona“goingconcern”basis.� ThattheDirectors,incaseofalistedcompany,hadlaiddowninternalfinancialcontrolstobefollowedbythecompanyandthatsuchinternalfinancialcontrolsareadequateandwereoperatingeffectively.

� Explanation-Forthepurposesofthisclause,theterm“internalfinancialcontrols”meansthepoliciesandproceduresadoptedbythecompanyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetentionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation;

� ThattheDirectors,haddevisedpropersystemstoensurecompliancewiththeprovisionsofallapplicablelawsandthatsuchsystemswereadequateandoperatingeffectively.

27. Acknowledgements YourDirectorsextendtheirgratitudetoShriNitinGadkari,UnionMinisterofShipping,andShriPonRadhakrishnan,MinisterofStateforShippingandShriMansukhlalMandaviya,MinisterofStateforShippingandlookforwardtotheirsupportandguidanceinmanagingtheaffairsoftheCompany.YourDirectorsalsoextendtheirgratitudetoShriRajiveKumar,SecretarytotheGovernmentofIndia,MinistryofShippingforhisguidance.YourDirectorsalsowishtoexpresstheirthankstotheofficialsintheMinistryofShipping,RoadTransport&HighwaysfortheunstintedsupportgivenbytheminvariousmattersconcerningtheCompany.YourDirectorswouldalsoliketoconveytheirthankstootherMinistries,TradeOrganizations,andShippers’Councils,whohaveplayedavitalroleinthecontinuedsuccessofyourCompany.TheDirectorsthanktheshareholdersandvaluedcustomersforthecontinuedpatronageextendedbythemtoyourCompany.Lastbutnottheleast,yourDirectorswishtorecordtheirdeepappreciationforthededicatedandloyalserviceofyourCompany’semployees,bothafloatandashore,withoutwhoseco-operationandeffortstheachievementsmadebyyourCompanywouldnothavebeenpossible.

Place : MumbaiDated : 18th August, 2016

For and on behalf of the Board of DirectorsCapt. B.B. Sinha

Chairman & Managing Director

DIRECTORS’ REPORT


FORM NO. MGT 9EXTRACT OF ANNUAL RETURN AS ON FINANCIAL YEAR ENDED ON 31.03.2016

PursuanttoSection92(3)oftheCompaniesAct,2013andrule12(1)oftheCompanies(Management&Administration)Rules,2014.

I REGISTRATION & OTHER DETAILS:

i CIN L63030MH1950GOI008033ii Registration Date 24/03/1950iii Name of the Company TheShippingCorporationofIndiaLtd.iv Category/Sub-category of the Company Companylimitedbyshares/UnionGovernmentCompanyv Address of the Registered office

& contact detailsShippingHouse,245,MadameCamaRoad,Mumbai-400021ShriDipankarHaldar,ED(LA)&CSTel-02222772213

vi Whether listed company YesName , Address & contact details of the Registrar & Transfer Agent, if any.

M/s.BigshareServicesPvtLtdE-2,AnsaIndustrialEstate,SakiviharRoad,SakiNaka,Andheri(E),Mumbai–400072 Email:[email protected]:02240430200

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAllthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated

SL No

Name & Description of main products/services NIC Code of the Product /service

% to total turnover of the company

1. SeaandCoastalFreightWaterTransport 50120 100%

III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIESSl No

Name & Address of the Company CIN/GLN Holding/Subsidiary/Associate

% Of Shares Held

Applicable Section

1 India LNG Transport Co.(No. 1) Ltd.171,OldBakeryStreet,Valletta,Malta.

NA Associate 29.08% 2(6)

2 India LNG Transport Co. (No. 2) Ltd.171,OldBakeryStreet,Valletta,Malta.

NA Associate 29.08% 2(6)


NA Associate 26% 2(6)



5 Irano Hind Shipping Co. Ltd.“IranoHindBuilding”,Adj.MehrshadSt.,SedaghatSt.Opp.ParkMellat,ValiasrAve.,Tehran,Iran


6 SAIL SCI Shipping Pvt. Ltd.“ShippingHouse”,13,StrandRoad,Kolkatta–700001

U61100WB2010PTC148428 Associate 50% 2(6)

IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change during

the yearDemat Physical Total

% of Total

SharesDemat Physical Total

% of Total

Shares

A.Promoters(1)Indiana) Individual/HUF 3057 0 3057 0.00 0 0 0 0.00 0.00

42




% of Total


% of Total

Shares

b) CentralGovt 296939920 0 296939920 63.75 296942977 0 296942977 63.75 0.00

c) StateGovt(s) 0 0 0 0 0 0 0 0 0

d) BodiesCorp. 0 0 0 0 0 0 0 0 0

e) Banks/FI 0 0 0 0 0 0 0 0 0

f) AnyOther.. 0 0 0 0 0 0 0 0 0

Sub-total(A)(1):- 296942977 0 296942977 63.75 296942977 0 296942977 63.75 0.00

(2) Foreigna) NRIs-Individuals 0 0 0 0 0 0 0 0 0

b) Other-Individuals 0 0 0 0 0 0 0 0 0

c) BodiesCorp. 0 0 0 0 0 0 0 0 0

d) Banks/FI 0 0 0 0 0 0 0 0 0

e) AnyOther.... 0 0 0 0 0 0 0 0 0

Sub-total(A)(2):- 0 0 0 0.00 0 0 0 0.00 0.00

TotalshareholdingofPromoter(A)=(A)

(1)+(A)(2) 296942977 0 296942977 63.75 296942977 0 296942977 63.75 0.00

B. Public Shareholding1. Institutions

a) MutualFunds 81500 2200 83700 0.02 2218648 2200 2220848 0.48 0.46

b) Banks/FI 7095581 300 7095881 1.52 6418717 300 6419017 1.38 -0.15

c) CentralGovt 0 0 0 0 0 0 0 0 0

d) StateGovt(s) 0 0 0 0 0 0 0 0 0

e) VentureCapitalFunds 0 0 0 0 0 0 0 0 0

f) InsuranceCompanies 79739447 0 79739447 17.12 79739447 0 79739447 17.12 0

g) FIIs 9001098 2700 9003798 1.93 7075145 2700 7077845 1.52 -0.41

h) ForeignPortfolio-Corp. 136754 0 136754 0.03 11860694 0 11860694 2.55 0

i) ForeignVentureCapitalFunds 0 0 0 0 0 0 0 0 0

i) Others(specify) 0 0 0 0 0 0 0 0 0

Sub-total(B)(1):- 96054380 5200 96059580 20.62 107312651 5200 107317851 23.04 -0.10

2. Non-Institutionsa)BodiesCorp. 12627112 15051 12642163 2.71 9907753 15051 9922804 2.13 -0.58

i)Indian 0 0 0 0 0 0 0 0 0

ii)Overseas 0 0 0 0 0 0 0 0 0

b)Individuals

i) IndividualshareholdersholdingnominalsharecapitaluptoRs.1lakh 42420497 33524 42454021 9.11 36499627 32635 36532262 7.84 -1.27





% of Total


% of Total

Shares

ii) IndividualshareholdersholdingnominalsharecapitalinexcessofRs1lakh 13210991 160150 13371141 2.87 11170788 160150 11330938 2.43 -0.44

c) Others(specify)

NonResidentIndians 3569263 324250 3893513 0.84 2456530 324250 2780780 0.60 -0.24

OverseasCorporateBodies 5250 0 5250 0.00 5250 0 5250 0.00 0

ForeignNationals 100 0 100 0.00 300 0 300 0.00 0

NBFC 0 0 0 0 601617 0 601617 0.13 0

Trusts 430265 0 430265 0.09 364231 0 364231 0.08 -0.01

ForeignBodies 0 0 0 0 0 0 0 0 0

Sub-total(B)(2):- 72263478 532975 72796453 15.63 61006096 532086 61538182 13.21 -2.55

TotalPublicShareholding

(B)=(B)(1)+(B)(2) 168317858 538175 168856033 36.25 168318747 537286 168856033 36.25 -2.65

TOTAL(A)+(B) 465260835 538175 465799010 100.00 465261724 537286 465799010 100.00 -2.65

CSharesheldbyCustodiansandagainstwhichDepositoryReceiptshavebeenissuedPromoterandPromoterGroup 0 0 0 0 0 0 0 0 0

Public 0 0 0 0 0 0 0 0 0

GRANDTOTAL(A)+(B)+(C) 465260835 538175 465799010 100.00 465261724 537286 465799010 100.00 -2.65

ii) SHARE HOLDING OF PROMOTERS

Sl No. Shareholders Name

Shareholding at the beginning of the year (as on 01.04.2015)

Shareholding at the end of the year (as on 31.03.2016) % change

in share holding

during the year

No. of shares % of total shares of the

company

% of shares pledged

encumbered to total shares

No. of shares % of total shares of the

company

% of shares pledged

encumbered to total shares

1. PresidentofIndia 296939920 63.75 0.00 296942977 63.75 0.00 3057Total 296939920 63.75 0.00 296942977 63.75 0.00 3057

(iii) CHANGE IN PROMOTERS’ SHAREHOLDING - Nil

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sl.No. Name

Shareholding

Date

Increase/Decrease

in Shareholding

Reason

Cumulative Shareholding during the year (01-04-15 to

31-03-16)No. of Shares at the beginning

(01-04-15)/ end of the year (31-03-16)

% of totalshares of the

Company No. of Shares


Company

1. Life Insurance Corporation of India

37521052 8.06 1.04.20150 Nilmovement

duringtheyear37521052 8.06 31.03.2016 37521052 8.06

44

Sl.No. Name

Shareholding

Date

Increase/Decrease

in Shareholding

Reason

Cumulative Shareholding during the year (01-04-15 to

31-03-16)No. of Shares at the beginning

(01-04-15)/ end of the year (31-03-16)


CompanyNo. of Shares


Company

2.Life Insurance Corporation Of India P & Gs Fund

10556843 2.27 1.04.20150 Nilmovement

duringtheyear10556843 2.27 31.03.2016 10556843 2.27

3.LIC of India Market Plus 1 Growth Fund

9447019 2.03 1.04.20150 Nilmovement

duringtheyear9447019 2.03 31.03.2016 9447019 1.06

4.General Insurance Corporation Of India

5246302 1.13 1.04.20150 Nilmovement

duringtheyear5246302 1.13 31.03.2016 5246302 1.135. The New India

Assurance Company Limited

4958095 1.06 1.04.2015 0Nilmovementduringtheyear4958095 1.06 31.03.2016 4958095 1.06

6. Ashish Rameshkumar Goenka

3412095 0.73 01.04.201527.11.2015 -118813 sold 3293282 0.7108.01.2016 -100000 sold 3193282 0.69

3193282 0.69 31.03.2016 3193282 0.69

7.

Life Insurance Corporation Of India - ULIF004200910LIC END+GRW512

3000000 0.64 01.04.2015

0 NilMovementduringtheyear3000000 0.64 31.03.2016 3000000 0.64

8. LIC OF INDIA PROFIT PLUS GROWTH FUND

2698747 0.58 01.04.20150 NilMovement

duringtheyear2698747 0.58 31.03.2016 2698747 0.589. DIMENSIONAL

EMERGING MARKETS VALUE FUND

2519889 0.54 01.04.201510.04.2015 37445 bought 2557334 0.5417.04.2015 16694 bought 2574028 0.5526.06.2015 -41158 sold 2532870 0.5428.08.2015 71099 bought 2603969 0.5604.09.2015 149506 bought 2753475 0.5911.09.2015 65586 bought 2819061 0.6018.09.2015 38402 bought 2857463 0.6130.10.2015 14265 bought 2871728 0.6213.11.2015 18687 bought 2890415 0.6227.11.2015 23990 bought 2914405 0.6225.12.2015 101611 bought 3016016 0.6531.12.2015 54519 bought 3070535 0.6608.01.2016 28032 bought 3098567 0.6615.01.2016 56617 bought 3155184 0.6822.01.2016 6469 bought 3161653 0.6805.02.2016 13573 bought 3175226 0.68

3175226 0.68 31.03.2016 3175226 0.68

10. LIC OF INDIA WEALTH PLUS FUND

2278015 0.49 01.04.20150 NilMovement

duringtheyear2278015 0.49 31.03.2016 2278015 0.49


(v) Shareholding of Directors & KMP:

Sl. No.

For Each of the Directors & KMP

Shareholding at the beginning of the year (As on 01.04.2015)

Shareholding at the end of the year

(As on 31.03.2016)

Cumulative Shareholding during the year

No. of shares% of total shares of

the companyNo.of shares

% of total shares of the company

No of shares% of total shares of

the company

1. ArunKumarGupta 1 0.00 0 0.00 0 0.002. SunilThapar 1 0.00 0 0.00 0 0.003. BipinBihariSinha 1 0.00 0 0.00 0 0.004. SarveenNarula 0 0.00 0 0.00 0 0.005. H.K.Joshi 0 0.00 0 0.00 0 0.006. K.Devadas 0 0.00 0 0.00 0 0.007. S.V.Kher(w.e.f01.10.2015) NA NA 0 0.00 0 0.008. DipankarHaldar 0 0.00 0 0.00 0 0.00

(V) INDEBTEDNESS Indebtedness of the Company including interest outstanding / accrued but not due for payment

(` in lakhs)

Secured Loans excluding deposits *

Unsecured Loans

Deposits Total Indebtedness

Indebtness at the beginning of the financial yeari) PrincipalAmount 6,79,815.00 - - 6,79,815.00ii) Interestduebutnotpaid - - - -iii) Interestaccruedbutnotdue 2,896.89 - - 2,896.89

Total (i+ii+iii) 6,82,711.89 - - 6,82,711.89 Change in Indebtedness during the financial year• Additions - - - -• Reduction** 89,895.30 - - 89,895.30

Net Change 89,895.30 - - 89,895.30 Indebtedness at the end of the financial yeari) PrincipalAmount 5,89,784.00 - - 5,89,784.00ii) Interestduebutnotpaid - - - -iii) Interestaccruedbutnotdue 3,032.59 - - 3,032.59

Total (i+ii+iii) 5,92,816.59 - - 5,92,816.59

* TheSecuredLoansincludescurrentmaturitiesonLongtermLoanswhichareincludedunderCurrentliabilitesintheFinancialStatements** IncludeschangesduetoForex

46

VI

REM

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A.RemunerationtoManagingDirector,Wholetimedirectorand/orManager:

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(c)Profitsinlieuofsalaryundersection17(3)

oftheIncomeTaxAct,1961

--

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2Stockoption

--

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3SweatEquity

--

--

--

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4Commission

--

--

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--

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CeilingaspertheAct

--

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B. Remuneration to other directors:

Sl. No. Particulars of Remuneration

NameTotal Amount

T. Kumar # Sanjeev Ranjan## Barun Mitra

1 IndependentDirectors N.A. N.A. N.A. (a)Feeforattendingboardcommitteemeetings - - - -(b)Commission - - - -(c)Others,pleasespecify - - - -

2 OtherNonExecutiveDirectors(a)Feeforattendingboardcommitteemeetings NIL NIL NIL NIL(b)Commission NIL NIL NIL NIL(c)Others,pleasespecify. NIL NIL NIL NIL

Total (2) NIL NIL NIL NILTotal (B)=(1+2) 0 0 0 0

Total Managerial Remuneration 0 0 0 2,00,90,138Overall Ceiling as per the Act. - - - -

* ShriA.K.GuptaandShriSunilThaparsuperannuatedon31.12.2015and30.09.2015respectively** ShriS.V.KherhasbeenholdingthepostofDirector(BNT)w.e.f.01.10.2015# Dr(Ms)TKumarceasedtobeontheBoardw.e.f.31.08.2015.##ShriSanjeevRanjanwasappointedasadirectorontheBoardofSCIw.e.f.21.09.2015.C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl. No.

Particulars of Remuneration Key Managerial Personnel

Company Secretary CFO$ Total

1. GrossSalary

(a)SalaryasperprovisionscontainedinSection17(1)oftheIncomeTaxAct,1961.

19,61,804 21,01,368 40,63,172

(b)Valueofperquisitesu/s17(2)oftheIncomeTaxAct,1961

3,33,115 3,96,691 7,29,806

(c)Profits in lieu of salary under section 17(3) of theIncomeTaxAct,1961

- - -

2 StockOption - - -3 SweatEquity - - -

4

Commission

As%ofProfit - - -

Others(specify) - - -5 Others,pleasespecify - - - Total 22,94,919 24,98,059 47,92,978

$SmtHKJoshiisholdingthepositionofCFOforwhichshedoesnotreceiveaseparateremuneration.TheabovementionedcomponentsofherremunerationarethesameasdeclaredunderParaVI(A)above.VII PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES TherewerenoPenalties/Punishment/CompoundingofOffencesfortheyearending31stMarch,2016.

48

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FORM NO. AOC-2(Pursuanttoclause(h)ofsub-section(3)ofsection134oftheActandRule8(2)oftheCompanies

(Accounts)Rules,2014)Formfordisclosureofparticularsofcontracts/arrangementsenteredintobythecompanywithrelatedpartiesreferredtoinsub-section(1)

ofsection188oftheCompaniesAct,2013includingcertainarm’slengthtransactionsunderthirdprovisothereto1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasisTherewerenocontractsorarrangementsortransactionsenteredintoduringtheyearended31stMarch,2016whichwerenotatarm’slengthbasis.

2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasisThedetailsofmaterialcontractsorarrangementortransactionatarm’slengthbasisfortheyearended31stMarch,2016areasfollows:

Name of the related party

Nature of relationship

Duration of contracts/

arrangements/transactions (yr)

Salient terms of the contracts or arrangements

Investment (in USD mn)

Date (s) of approval by the Board, if

any

Amount paid as advances,

if any

ILT No. 1 Ltd. JointVentureCompany

till2028 Basedontransferpricingguidelines

14.23 06.05.2001&12.12.2008

Noadvances



13.40 06.05.2001&12.12.2008

Noadvances



15.58 13.01.2006&24.09.2012

Noadvances

ILT No. 4 Pvt. Ltd.* JointVentureCompany


0.55 13.11.2013&28.03.2014

Noadvances

*TankerILTNo.4isinbuildingphaseandinvestmentofSCIasonMarch31st,2016ispartoftotalinvestmentcommittedbySCI.

MumbaiDate:18.08.2016

For and on behalf of the Board of DirectorsCapt.B.B.Sinha,

Chairman & Managing Director

50

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st March, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule no.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,TheMembers,TheShippingCorporationofIndiaLimited,IhaveconductedtheSecretarialAuditofthecomplianceofapplicablestatutoryprovisionsandtheadherencetogoodcorporatepracticesbyTheShippingCorporationLimited(hereinaftercalled‘theCorporation’).SecretarialAuditwasconductedinamannerthatprovidedmeareasonablebasisforevaluatingthecorporateconducts/statutorycompliancesandexpressingmyopinionthereon.BasedonmyverificationoftheCorporation’sbooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbytheCorporationandalsotheinformationprovidedbytheCorporation,itsofficers,agentsandauthorizedrepresentativesduringtheconductofsecretarialaudit,Iherebyreportthatinmyopinion,theCorporationhasduringtheauditperiodcoveringthefinancialyearendedon31stMarch,2016compliedwiththestatutoryprovisionslistedhereunderandalsothattheCorporationhasproperBoardprocessandcompliancemechanisminplacetotheextent,inthemannerandsubjecttothereportingmadehereinafter.Ihaveexaminedthebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbyTheShippingCorporationofIndiaLimitedforthefinancialyearendedon31stMarch,2016accordingtotheprovisionsof:(i) TheCompaniesAct,2013(theAct)andtherulesmadethereunder;(ii) TheSecuritiesContracts(Regulation)Act,1956(‘SCRA’)andtherulesmadethereunder;(iii) TheDepositoriesAct,1996andtheRegulationsandByelawsframedthereunder;(iv) ForeignExchangeManagementAct,1999andtherulesandregulationsmadethereundertotheextentofForeignDirectInvestment,

OverseasDirectInvestmentandExternalCommercialborrowing;(v) ThefollowingRegulationsandGuidelinesprescribedundertheSecuritiesandExchangeBoardofIndiaAct,1992(‘SEBIACT’):-

(a) TheSecuritiesandExchangeBoardofIndia(SubstantialAcquisitionofSharesandTakeovers)Regulations,2011;(b) TheSecuritiesandExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,1992(upto14thMay,2015)andSecurities

andExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,2015(witheffectfrom15thMay,2015).(vi) ThefollowingActs/GuidelinesspecificallyapplicabletotheCompany:

(a) MerchantShippingAct,(b) GuidelinesonCorporateGovernanceforCentralPublicSectorEnterprises,2010;(c) InternationalSafetyManagementCode(ISM).

Ireportthatduringtheyearunderreviewtherewasnoaction/eventinpursuanceof–(a) TheSecuritiesandExchangeBoardofIndia(IssueandListingofDebtsSecurities)Regulations,2008(b) TheSecuritiesandExchangeBoardofIndia(DelistingofEquityShares)Regulations,2009;(c) TheSecuritiesandExchangeBoardofIndia(Buy-backofSecurities)Regulations,1998;(d) TheSecuritiesandExchangeBoardofIndia(EmployeeStockOptionSchemeandEmployeeStockPurchaseScheme)Guidelines,

1999;(e) TheSecuritiesandExchangeBoardofIndia(IssueofCapitalandDisclosureRequirements)Regulations,2009;(f) TheSecuritiesandExchangeBoardofIndia(RegistrartoanIssueandShareTransferAgents)Regulations,1993regardingthe

CompaniesActanddealingwiththeclientIhavealsoexaminedcompliancewiththeapplicableclausesofthefollowing:a) SecretarialStandardswithregardtoMeetingoftheBoardofDirectors(SS-1)andGeneralMeetings(SS-2)issuedbytheInstituteofthe

CompanySecretariesofIndia(effectivefrom1stJuly,2015);andb) Listing Agreement entered into by the Companywith the Stock Exchanges in India and SEBI (Listing Obligations and Disclosure

Requirements)Regulations,2015(w.e.f.1stDecember,2015).DuringtheperiodunderreviewtheCorporationhascompliedwiththeprovisionsoftheAct,RulesRegulations,Guidelines,Standards,etc.mentionedabovesubjecttothefollowingobservations:“The Corporation has complied with the requirements of Corporate Governance as provided under Clause 49 of the Listing Agreement, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance, with the exception


of appointment of Independent Directors to the extent of 50% of the total strength of the Board. It is clarified by the Corporation that the matter is being pursued with the Administrative Ministry for appointing required number of Independent Directors on the Board and hence, Audit Committee, Nomination & Remuneration Committee, Stakeholders’ Relationship Committee and CSR Committee could not be validly constituted.”IfurtherreportthatthecompliancebytheCompanyofapplicablefinanciallawslikedirectandindirecttaxlawshasnotbeenreviewedinthisauditsincethesamehasbeensubjecttoreviewbystatutoryfinancialauditandotherdesignatedprofessionals.Ifurtherreportthat–• The Board of Directors of the Company is constituted as per the Clause 49 of the Listing Agreement and SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015 with balance of Executive Director and Non-Executive Directors with the exception of appointment of Independent Directors to the extent of 50% of the total strength of the Board. ItisclarifiedbytheCorporationthatthematterisbeingpursuedwiththeAdministrativeMinistryforappointingrequirednumberofIndependentDirectorsontheBoard.ThechangesinthecompositionoftheBoardofDirectorsthattookplaceduringtheyearunderreviewwerecarriedoutincompliancewiththeprovisionsoftheAct.

• AdequatenoticeisgiventoalldirectorstoscheduletheBoardMeetings,agendaanddetailednotesonagendaweresentatleastsevendaysinadvanceandasystemexitsforseekingandobtainingfurther informationandclarificationsontheagendaitemsbeforethemeetingandformeaningfulparticipationatthemeeting.

• Asper theminutesof themeetingduly recordedandsignedby thechairman, thedecisionsof theBoardwereunanimousandnodissentingviewshavebeenrecorded.

IfurtherreportthatthereareadequatesystemsandprocessesintheCorporationcommensuratewiththesizeandoperationoftheCorporationtomonitorandensurecompliancewithapplicablelaws,rules,regulationsandguidelines.IfurtherreportthatduringtheauditperiodtheCorporationhadnospecificevents/actionshavingamajorbearingontheCorporation’saffairsinpursuancetothelaws,rules,regulations,guidelines,standards,etc.referredtoabove.

Place: Mumbai Date: 26.05.2016

(U.C. SHUKLA)

COMPANY SECRETARY

FCS: 2727/CP: 1654

52

SCI’s Philosophy on Corporate GovernanceSCI constantly keeps the Corporate Governance issues in focus. It is SCI’s policy to provide adequate and timely information to allstakeholders.SCI’sendeavourinthisrespecthasbeenacknowledgedandappreciatedyearafteryear.SCIhasbeenawardedaccoladesforprovidingmeaningfulinformationonitsactivities.Thisyeartoo,SCIwillstrivetomeettheexpectationsofvariousstakeholders.SCIapartfromcomplyingwiththeCompaniesAct2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015(hereinafterreferredastheSEBI(LODR)Regulations2015)hasalsoadoptedtheguidelinesissuedbytheDPEin2010onCorporateGovernance.SCI’s Code of ConductTheBoardofDirectorsoftheCompanyadopted“CodeofBusinessConduct&EthicsforBoardmembers&SeniorManagementPersonnel”.ThisCodeofConductisbifurcatedintothe“CodeofBusinessConduct&EthicsforBoardMembers”&“CodeofBusinessConductforSeniorManagementPersonnel”.TheCodeisinalignmentwiththeCompany’svisionandvaluestoachievetheMission&ObjectivesandaimsatenhancingethicalandtransparentprocessinmanagingtheaffairsoftheCompany.TheCodeispostedontheCompany’sWebsite-www.shipindia.comTheBoardmembersandSeniorManagementPersonnelhaveaffirmedcompliancetothiscodeandadeclarationtothiseffectsignedbyChairman&ManagingDirectorisprovidedattheendofthisReport.Board of Directors:Composition of the Board of DirectorsAsofdate, theBoardofDirectorsofyourCompanycomprises9memberswithamixof5executive(includingChairman&ManagingDirector)and2non-executiveDirectors(GovernmentDirectorswhorepresentthepromotersi.e.GovernmentofIndia)and2NonOfficialPartTimeDirectors(IndependentDirectors).Regulation17(1)(b)oftheSEBI(LODR)Regulations,2015dealingwithCorporateGovernancerequiresat least50%of the totalstrengthof theBoardofDirectorsofacompany tocompriseof IndependentDirectors,whichhasanExecutiveChairman.ThecompositionofBoardwasnotcomplianttotheCorporateGovernancerequirement.OnthebasisofNominationreceivedfromMinistryofShipping,theBoardAppointedShriArunBalakrishnanandShriSukamalChandraBasuasIndependentDirectors.TheAppointmentofotherIndependentDirectorsisinprocess.(Dr.)Ms.T.Kumar,SpecialSecretaryandFinancialAdvisor(MinistryofShipping)ceasedtobeDirectoronBoardofSCIduetosuperannuationwitheffectfrom31.08.2015andShriSanjeevRanjan,AdditionalSecretary&FinancialAdvisor(Shipping)wasappointedasDirectorontheBoardofSCIwitheffectfrom21.09.2015.Capt.SunilThapar,Director(BulkCarrierandTanker)ceasedtobeDirectorontheBoardofSCIduetosuperannuationon01.10.2015,subsequenttowhichShriS.V.KherwasappointedasDirector(BulkCarrierandTanker)on01.10.2015.ShriA.K.GuptaceasedtobetheChairman&ManagingDirectorontheBoardofTheShippingCorporationofIndiaLtdon01.01.2016duetohissuperannuation.Capt.B.B.Sinha,Director(P&A)holdsAdditionalChargeofChairmanandManagingDirectorw.e.f.01.01.2016.ShriArunBalakrishnanandShriSukamalChandraBasuwereappointedasNonOfficialPartTimeDirectors (IndependentDirectors)on30.03.2016and26.05.2016,respectively.Thedirectorshipsheldinotherpubliclimitedcompaniesandmemberships/chairmanshipsheldintheCommitteesofsuchBoardsbythemembersoftheBoardofyourCompanyason31stMarch2016aresetoutbelow:-

Name Designation No. of Directorships and committee memberships / chairmanships

Directorships in other public limited

companies**

Committee memberships ** Committee

chairmanships **

Executive Directors (Whole-Time)

Capt.B.B.Sinha Chairman&ManagingDirectorandDirector(PersonnelandAdministration)

NIL NIL NIL

Capt. S.Narula Director(Liner&PassengerServices) 1 NIL NIL

Capt. K. Devadas Director(Technical&Off-ShoreServices) NIL NIL NIL

Smt. H.K.Joshi Director(Finance)&CFO NIL NIL NIL

Shri S.V Kher Director(BulkCarrierandTanker) NIL NIL NIL

Non-Executive Directors (Part-Time Ex-Officio)

REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE


Name Designation No. of Directorships and committee memberships / chairmanships

Directorships in other public limited

companies**

Committee memberships ** Committee

chairmanships **

Shri Sanjeev Ranjan

AdditionalSecretaryandFinancialAdvisor02 01 NIL

Shri Barun Mitra JointSecretary NIL NIL NIL

Non-Executive Directors (Part-Time Independent)

Shri Arun Balakrishnan

IndependentDirector08 02 03

**InaccordancewithRegulation26(1)oftheSEBI(LODR)Regulations,2015onlydirectorshipsonpubliclimitedcompanieshavebeenconsideredandthedirectorshipsonprivatelimitedcompanies,foreigncompaniesandcompaniesunderSection8oftheCompaniesAct,2013havebeenexcluded.Similarly, in termsof theaboveClause,membership/chairmanshipof theAuditCommitteeandStakeholdersRelationshipCommitteeofallPublicLimitedCompanieshasbeenconsidered.Board Meetings / Annual General MeetingDuring thefinancialyear2015-2016,7BoardMeetingswereheld, thedatesbeing,21.05.2015,12.08.2015,29.09.2015,13.11.2015,30.12.2015,10.02.2016and30.03.2016.Thedetailsaboutattendanceof theDirectorsat theBoardMeetingsandat the65thAnnualGeneralMeeting(AGM)heldon22.09.2015aregivenbelow:

Name of the Director No. of Meetings Attendance at the last AGM held on 22.09.2015 held during the tenure of Directors attended

Shri A. K. Gupta* 05 05 Yes

Dr. (Ms.) T. Kumar * 02 02 No

Shri Sanjeev Ranjan* 05 05 No

Shri Barun Mitra 07 06 No

Capt. B. B. Sinha** 07 07 Yes

Capt.S.Narula 07 07 Yes

Capt. K.Devadas 07 07 Yes

Smt. H.K.Joshi 07 07 Yes

Shri S.V.Kher * 04 04 -

Capt. S. Thapar* 03 03 Yes

Shri Arun Balakrishnan * 01 00 -

*ThechangestakenplaceintheconstitutionoftheBoardofDirectorsofSCIduringtheFY2015-16areasfollows:-

Name of the Director Date of Appointment Date of Cessation Reason for cessationShri A.K.Gupta - 01.01.2016 SuperannuationDr.(Ms.)T.Kumar - 31.08.2015 CessationsubsequenttosuperannuationasSpecial

Secretary&FinancialAdvisor(MinistryofShipping)

Shri Sanjeev Ranjan 21.09.2015 - -Capt. S. Thapar - 01.10.2015 SuperannuationShri S.V.Kher 01.10.2015 - -Shri Arun Balakrishnan 30.03.2016 - -

**CaptBBSinhaisholdingadditionalChargeofthepostofChairman&ManagingDirectorw.e.f.01.01.2016.

DetailsoffamiliarizationprogrammeimpartedtoIndependentDirectorsisdisclosedonSCIwebsitewww.shipindia.com->shareholderinfo->DisclosuresunderListingRegulations.


54

Directors Shareholding NoneofthedirectorsholdsharesinSCI.Committees of the BoardToenablebetterandmorefocusedattentionontheaffairsoftheCompany,theBoardhasconstitutedthefollowingCommitteesoftheBoardasrequiredunderCompaniesAct2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.Audit Committee TheBoardofDirectorsoftheCompanyhadconstitutedanAuditCommitteeintheyear2000.DuetoresignationsfromIndependentDirectorsontheBoardofSCI,theAuditcommitteehadbecomenonfunctionalasaresultnoAuditcommitteemeetingswereheldinFinancialyear2015-2016.TheBoardhadconstitutedaninternalFinanceCommitteewithDirector(Finance)asChairmanandD(B&T),D(P&A),D(L&PS)andD(T&OS)asitsmemberstolookintomattersrelatedtotheAuditCommittee.Duringtheyear2015-16,sixmeetingswereheldon26.05.2015,22.06.2015,03.08.2015,15.09.2015,05.11.2015&29.02.2016.TheminutesofthemeetingsofFinanceCommitteehavebeenplacedbeforetheBoardfromtimetotime.OnappointmentofIndependentDirectorsonBoardofSCI,thecommitteewasreconstitutedon26.05.2016withShriSukamalChandraBasuasChairmanandShriArunBalakrishnanandCapt.K.Devadasasitsmembers.AllthemembersoftheCommitteeare‘financiallyliterate’andhaveaccountingandfinancialmanagementexpertise.TheCompanySecretaryactsasSecretarytotheCommittee.TheDirector(Finance)andtheDirectorsinchargeofoperationsattendthemeetingsasinvitees.TheStatutoryAuditorsandInternalAuditorsalsoattendmeetingsatwhichtheauditreports/Company’sfinancialstatementsarereviewedbytheCommittee.ThetermsofreferenceofAuditCommitteeincludeallmattersspecifiedinSection177ofCompaniesAct2013andRegulation18ofSEBI(LODR)Regulations,2015andtheDPEguidelinesonCorporateGovernanceforCPSEs,2010andcovers,inter-alia,overseeingCompany’sfinancialreportingprocess,adequacyofinternalcontrolsystems,reviewingfinancialrisks’managementpolicies,compliancewithAccountingStandards,etc.Nomination and Remuneration CommitteeDuetoresignationsfromIndependentDirectorsontheBoardofSCI,theNominationandRemunerationCommitteehadbecomenonfunctionalasa resultnoNominationandRemunerationCommitteemeetingswereheld inFinancialyear2015-2016.On26.05.2016 theBoardre-constitutedtheNominationandRemunerationCommitteewithShriSukamalChandraBasuasChairmanandShriArunBalakrishnan&ShriBarunMitraasmembers.ThetermsofreferenceofNominationandRemunerationcommitteearetotakecareofCompliancesunderSection178ofCompaniesAct,2013andclause5.1oftheDPEguidelinesonCorporateGovernanceforCPSEs,2010andasspecifiedinpartDofScheduleIIofSEBI(LODR)Regulations,2015.Corporate Social Responsibility CommitteeDuetoresignationsfromIndependentDirectors,theCommitteehadbecomenonfunctionalasaresultnomeetingswereheldduringthefinancialyear2015-2016.HoweveronappointmentofIndependentDirectors,theCommitteewasre-constitutedon26.05.2016tobeinlinewiththeprovisionsofSection135oftheCompaniesAct,2013.ItcomprisesofC&MDasChairmanoftheCommittee,ShriSukamalChandraBasuandCapt.S.Narulaasmembers.ShriSukamalChandraBasuisanIndependentDirector.Share Transfer CommitteeThisCommitteeoftheBoardcomprisingofChairman&ManagingDirectorandanExecutiveDirector(WholeTime),regularlyapprovesthetransferandtransmissionofsharesandotherrelatedmatters.Asandwhentheshareholdersmadelodgementsfortransfer/re-materialisation,theShareTransferCommitteeheldtheirmeetingspromptlytoeffectthetransfers.TheShareTransferCommitteeoftheBoardmetthreetimesduringtheyear2015-16on22.07.2015,04.09.2015and04.11.2015.Stakeholders’ Relationship CommitteeDuetoresignationsfromIndependentDirectorsontheBoardofSCI,theStakeholders’RelationshipCommitteehadbecomenonfunctionalasaresultnoStakeholdersRelationshipCommitteemeetingswereheldinFinancialYear2015-2016.HoweveronappointmentofIndependentDirectorsonBoardofSCI,theCommitteewasre-constitutedon26.05.2016withShriArunBalakrishnanasChairman,andShriSukamalChandraBasuandSmtH.K.Joshiasitsmembers.Grievances&theirredressals:Duringtheyearunderreview,4complaintswerereceived.Allthecomplaintshavebeenreplied/sortedoutwithinaverageperiodof7daysofreceiptofeachcomplaintasagainstthestipulatedtimeof15daysasperSEBInorms.Nosharetransferswerependingattheendofthefinancialyear.Thesourcesofcomplaintsreceivedandotherdetailsaregivenbelow:

Source(s) of Complaints Received Redressed Pending

SEBI 01 01 NIL

StockExchanges 03 03 NIL

Other 00 00 NIL

Total 04 04 NIL



ComplianceOfficer:TheComplianceOfficerformonitoringthesharetransferprocessandforcarryingoutotherrelatedfunctionsasperListingRegulations,isShriDipankarHaldar,ExecutiveDirector(LegalAffairs)&CompanySecretary,andcanbecontactedat:

“ShippingHouse”245,MadameCamaRoad,NarimanPointMumbai–400021.

Tel:22772213,22024572Fax:22022906E-mail:[email protected]

Investorscanlodgetheircomplaints,ifany,[email protected],contactnumber,e-mailIDandtheaddressforcorrespondencewhichwouldenableustorespondtothempromptlyUnpaid Dividend DetailsAspertheprovisionsofSection124readwithSection125oftheCompaniesAct,2013,theCompanyisrequiredtotransfertheunpaiddividendsremainingunclaimedandunpaidforaperiodof7yearsfromtheduedatetotheInvestorEducationandProtectionFund(IEPF)setupbytheCentralGovernment.Detailsofshareholderswhohavenotencashedtheirdividendwarrantsinspiteofthesamebeingsenttothem,hasbeenuploadedontheCompany’swebsite.GivenbelowaretheduedatesfortransferofunclaimedandunpaiddividendtotheIEPFbytheCompany:

Financial Year Date of declaration Proposed date for transfer to IEPF

2008-09(Final) 30.09.2009 29.10.2016

2009-10(Final) 29.09.2010 28.10.2017

2010-11(Interim) 07.02.2011 02.04.2018

2010-11(Final) 23.09.2011 22.10.2018Unpaid/unclaimedbalanceoftheFinalDividend2007-08accountwasduefortransfertoIEPFasperSection124and125oftheCompaniesAct,2013andthesamehasbeentransferredaccordingly.GeneralBodyMeetingsThedate,timeandvenueofthelastthreeAnnualGeneralMeetingsoftheCompanyandthedetailsofspecialresolutionpassedthereat,aregivenbelow:

General Meetings Date & Time Venue Special Resolutions passed thereat

63rdAGM(FY2012-13) 24.09.201315.30hrs. RegisteredOfficeoftheCompany,Mumbai

NIL

64thAGM(FY2013-14) 24.09.201415.30hrs.

65thAGM(FY2014-15) 22.09.201515.30hrsDetailsofresolutionpassedbywayofPostalBallotsduringFY2015-16:PursuanttoSection110oftheCompaniesAct,2013readwiththeCompanies(ManagementandAdministration)Rules,2014,theCompanyhadsoughtconsentoftheshareholdersforpassingthefollowingspecialresolution:

Quote“RESOLVEDTHATpursuanttoSection14oftheCompaniesAct,2013Article150(2)(d)oftheArticlesoftheAssociationoftheCompanybeandisherebyamendedtoreadasfollows:

Existing Proposed

disposalofproperty(otherthanshipswhichareeconomicallynotviable)havinganoriginalbookvalueofRs.1crore(Rupeesonecrore)andabove.

disposal of property (other than ships) which areeconomically not viable having an original book value of`1crore(Rupeesonecrore)andabove.

UnquoteShriUpendraShukla,PractisingCompanySecretarywasappointedasscrutinizer.TheannouncementofresultofthePostalBallottookplaceon1stMarch,2016whentheResolutionwasdeclaredaspassedwithrequisitemajority.Thedetailsofvotingareasfollows:-

Particulars (Physical +Electronic) No of Shares Held No of Votes Cast % of votes cast

Assent 38,60,59,733 38,59,02,768 99.99

Dissent 17,039 17,039 0.004


56

Means of Communication

Half-yearly Report sent to each household of shareholders No,astheunauditedfinancialresultsoftheCompanyarepublishedinthenewspaperseveryquarterandarealsomadeavailableontheCompany’swebsite.

Quarterly Results published in newspapers Yes, the newspapers being:

For Quarter ended June 2015

a. FinancialExpress–Mumbai,Ahmedabad,Delhi,Kolkata,Hyderabad,Chennai,Bangalore,Pune,Chandigarh,Lucknow,Kochi

b. Jansatta–Kolkata,Chandigarh,Delhi,Lucknow

c. Loksatta–Mumbai

For Quarter ended September 2015

a. FinancialExpress–Mumbai,Ahmedabad,Delhi,Kolkata,Hyderabad,Chennai,Bangalore,Pune,Chandigarh,Lucknow,Kochi.

b. Jansatta–Delhi,Chandigarh,Kolkata,Lucknow.

c. Loksatta-Mumbai

For Quarter ended December 2015

a. FinancialExpress–Mumbai,Ahmedabad,Bangalore,Kolkata,Chennai,Kochi,Delhi,Hyderabad,Lucknow,Chandigarh,Pune.

b. Jansatta–Delhi,Chandigarh,Kolkata,Lucknow.

c. Loksatta-Mumbai

For Year and Quarter ended March 2016

a. FinancialExpress–Mumbai,Pune,Ahmedabad,Delhi,Lucknow,Chandigarh,Kolkata,Chennai,Kochi,Bangalore,Hyderabad.

b. Jansatta–Kolkata,Chandigarh,Delhi,Lucknow

c. Loksatta–Mumbai

Website, where results and/or official news are displayed OntheCompany’sWebsitewww.shipindia.com

The presentation made to Institutional Investors or to the Analysts

The following con-calls were held by the Company for investors :-

FortheQ1resultsofFY2015-16-on13.08.2015.

FortheQ2resultsofFY2015-16–on16.11.2015.



Whether Management Discussion and Analysis is a part of Annual Report or not

Yes.



General Shareholder InformationAnnual General Meeting – Date, Time & Venue

26th September, 2016 at 1530 hrs. at the RegisteredOffice of the Company, “ShippingHouse”,245,MadameCamaRoad,Mumbai–400021.

Financial Year 01.04.2015to31.03.2016

Date of Book Closure 20.09.2016to26.09.2016

Proposed Dividend TheBoardofDirectorshasnotrecommendeddividendforthisfinancialyear.

Listing on Stock Exchanges BombayStockExchangeLtd.,PhirozeJeejeebhoyTowers,DalalStreet,Mumbai–400001.

NationalStockExchangeofIndiaLimitedExchangePlaza,5thFloor,PlotNo.C/1,GBlock,Bandra-KurlaComplex,

Mumbai–400051.

TheCalcuttaStockExchangeAssociationLimited,7,LyonsRange,Kolkata–700001.

Payment of Listing Fees TheCompanyhaspaid theannual listing fees for theyear2015 -2016 to theaforesaidStockExchangeswithinthestipulatedtime.

Stock Code BombayStockExchangeLtd.–523598NationalStockExchangeofIndiaLimited–SCIDemat-ISINNumber–INE109A01011

Address for Correspondence/ Registrar and Transfer Agents Shareholders’ correspondences should be addressed to the Company’s Share Transfer

Agents,M/s.BigshareServicesPvtLtdattheiraddressesmentionedbelow:

M/s. Bigshare Services Pvt Ltd

Regd. officeE-2,AnsaIndustrialEstate,SakiviharRoad,SakiNaka,Andheri(E),

Mumbai–400072

Tel:02240430200Fax: 02228475207E-mail: [email protected]:www.bigshareonline.com

Share Transfer System ProcessingofsharetransferaredonebytheRegistrarandTransferAgentsandapprovedby theShare TransferCommittee of theCompany. There are no pending share transferrequestsason31stMarch2016.

Dematerialization of shares and liquidity Witheffectfrom26.06.2000,tradingintheCompany’sshareswasmadecompulsoryinthedematerializedform.TheCompany’ssharesareavailablefortradinginthedepositorysystems of both National Securities Depository Limited (NSDL) and Central DepositoryServices(India)Limited(CDSL).Asat31stMarch2016,99.88%of thepaid-upequitysharecapital,representing465261724shareswasheldindepositorymode.Theprocessingactivitieswithrespecttotherequestsreceivedfordematerializationarecompletedwithin15daysfromthedateofreceiptofrequest.

Foreign Exchange Risk & Hedging Activities

Inthecourseofourbusinessactivities,financialrisksmayarisefromchangesininterestratesandexchangerates.ForeigncurrencyriskisconsideredtobenominalinviewofthenaturalhedgethattheCompanyhas.Amajorityofourreceiptsareeitherinforeigncurrencyoraredenominatedinforeigncurrencyandaccordinglynospecifichedgingactivitieshavebeenundertaken.TheCompanymaintainsaRiskRegistertocloselymonitorthefinancialrisks. The approvedRiskManagementPolicy is alsoundergoing review for keeping thesameupdatedbasedoneconomic/businessenvironment.

Your Company has not issued any GDRs/ ADRs/ Warrants or any convertible instruments.Your Company has no Plant


58

Monthly high and low quotation of shares on the BSE and NSE during the financial year 2015-2016

MonthSharePriceonBSE SharePriceonNSE

High(`) Low(`) High(`) Low(`)April2015 52.90 45.30 52.95 45.20May2015 59.65 44.70 59.50 44.50June2015 53.55 46.05 53.65 45.30July2015 66.00 50.05 66.10 50.10August2015 84.90 59.85 84.80 59.65September2015 80.75 61.90 80.50 61.85October2015 87.80 75.50 87.90 74.85November2015 84.30 71.50 84.30 71.10December2015 100.90 81.30 101.00 81.15January2016 98.20 73.20 98.20 73.50February2016 86.80 54.50 86.75 54.35March2016 67.70 55.40 67.85 55.25

Stock Performance in comparison to BSE SensexMonth SCI’s Closing Price (Rs) BSE SensexApril2015 47.05 27,011.31May2015 52.20 27,828.44June2015 50.05 27,780.83July2015 64.70 28,114.56August2015 67.85 26,283.09September2015 75.40 26,154.83October2015 78.95 26,656.83November2015 82.90 26,145.67December2015 93.35 26,117.54January2016 81.65 24,870.69February2016 55.55 23,002.00March2016 65.05 25,341.86

Graph showing the SCI share price movement based on the above data:



DISTRIBUTION OF SHARE HOLDING AS ON 31.03.2016

CATEGORYDEMAT PHYSICAL TOTAL %TO

FOLIOS SHARES FOLIOS SHARES FOLIO SHARES FOLIOS SHARES1-500 149406 19195155 130 21636 149536 19216791 92.17 4.13501-1000 6534 5096143 8 6700 6542 5102843 4.03 1.101001-2000 3123 4638565 1 1200 3124 4639765 1.93 1.002001-3000 1043 2662341 2 4900 1045 2667241 0.64 0.573001-4000 463 1667974 0 0 463 1667974 0.29 0.364001-5000 361 1685615 0 0 361 1685615 0.22 0.365001-10000 581 4246490 1 6000 582 4252490 0.36 0.9110000&above 585 426069441 7 496850 592 426566291 0.36 91.58

TOTAL 162096 465261724 149 537286 162245 465799010 100.00 100.00Distribution of Shareholding by percentage of ownership as on 31st March 2016

Directors’ RemunerationThedetailsoftheremunerationpaidtothewhole-timeDirectorsandsittingfeespaidtotheIndependentDirectorsduringtheyearunderreviewaresetoutbelow:-

Name of the Director Consolidated Salary

Perquisites , Allowances and other benefits

Performance Linked Incentives

Sitting Fees Total

Shri Arun Kumar Gupta* 44,19,014 3,19,162 - - 47,38,176

Shri Sunil Thapar* 29,53,527 2,29,989 - - 31,83,516

Shri Bipin Bihari Sinha 24,19,895 3,79,488 - - 27,99,383

Shri Sarveen Narula 24,73,777 3,68,079 - - 28,41,857

Shri Kelath Devadas 23,07,139 3,38,806 - - 26,45,946

Smt. Harjeet Kaur Joshi 21,01,368 3,96,691 - - 24,98,059

Shri S.V. Kher** 10,59,156 3,24,046 - - 13,83,202

TOTAL 1,77,33,877 23,56,261 - - 2,00,90,138 * ShriA.K.GuptaandShriSunilThaparsuperannuatedon31.12.2015and30.09.2015respectively** ShriS.V.KherhasbeenholdingthepostofDirector(BNT)w.e.f.01.10.2015.


60

Subsidiary CompaniesTheCompanydoesnothaveanysubsidiarycompany.DisclosuresDuringtheyearunderreview,theCompanyhasnotenteredintofinancialorothertransactionsofmaterialnaturewithitsPromoters,theDirectors,andseniormanagementthatmayhavepotentialconflictwiththeinterestsoftheCompanyatlarge.Nopenalties/strictureshavebeenimposedontheCompanybytheStockExchangesorSEBIoranystatutoryauthorityonanymatterrelatedtocapitalmarketduringthelastthreeyears.Code of Conduct for Prevention of Insider TradingSCIhasitscodeofconductforpreventionofinsidertradinginaccordancewiththeSEBI(ProhibitionofInsiderTrading)Regulations,2015.TheCodelaysdownguidelineswhichadvisethemanagementandthestaffonprocedurestobefollowedanddisclosurestobemadewhiledealingwiththesharesofCompany,andcautionsthemoftheconsequencesofviolations.Inlinewiththeaforesaidregulations,thepolicyisalsoavailableattheCompany’swebsiteatthesection‘Investors’→‘Policies’.Related Party TransactionsInlinewiththeCompaniesAct,2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.yourcompanyhasformulatedapolicyonmaterialityofRelatedPartyTransactionanddealingwithrelatedpartytransactionasapprovedbytheBoardwhichisalsoavailableatCompany’swebsiteatthesection‘Investors’.Thedetailsofallthetransactionswithrelatedpartieswhichareenteredintointheordinarycourseofbusinessareplacedbeforetheauditcommitteeonquarterlybasis.TherelatedpartydisclosuresasrequiredunderAccountingStandard18“RelatedPartyDisclosures”aregivenintheNotesonAccountsoftheBalanceSheet(ReferNote31totheStandalonefinancialstatements.).TherewerenomaterialindividualtransactionswithrelatedpartieswhicharenotinnormalcourseofbusinessrequiredtobeplacedbeforetheAuditCommitteethatmayhavepotentialconflictwiththeinterestofthecompanyatlarge.Allindividualtransactionswithrelatedpartieswereon“arm’slength”basis.Accounting TreatmentInpreparationoffinancialstatements,theCompanyhasfollowedtheAccountingStandardsissuedbytheInstituteofCharteredAccountantsofIndiaandtherelevantprovisionsoftheCompaniesAct,2013.Risk ManagementRegulation21oftheSEBI(LODR)Regulations,2015isapplicableonlytotop100ListedentitiesbasedonMarketCapitalisation.TheRiskManagementCommitteehasbeenconstitutedconsistingofallFunctionalDirectorsandregularmeetingsareheldatManagementleveltoreviewtheriskregistersandthereafterplacedintheBoard.Proceeds from public issues, right issues, preferential issues etc.Duringtheyear2010-11,yourCompanyhadcomeoutwitha“FurtherPublicOffer”,(FPO),comprisingofa‘freshissue’of42,345,365equity shares in your company and an ‘offer for sale’ of 42,345,365 equity shares by the President of India. The FPO proceeds of`58245lakhswerefullyutilizedinthefinancialyear2011-12asperobjectoftheissueforpartfinancingofcapitalexpenditureonnineshipbuildingprojectsspecifiedforutilization.However,duetodelaysintheprojectsresultingindefaultbytheshipyards,duringtheperiodJanuary2014toMay2014,yourCompanyrescindedcontractsforfourshipbuildingprojectsandalso,re-negotiatedtheinstalmentspaidfortwoprojectsinordertocompressthesameagainstasingleproject.TheinvestmentintherescindedcontractsoutoftheFPOProceedswas`330.65crores.YourCompanyhastilldatereceivedback`330.65croresofthesefundsfromtheshipyards.Theshareholdersvidetheresolutionpassedthroughpostalballotprocesson14.01.2015approvedtheproposaltore-deploythesaid`330.65croresreceived/tobereceivedasrefundfromShipyards,towardsvariousshipbuildingprojectsincludingoffshoreassets[includingbutnotlimitedtoanchorhandlingtugsupplyvessels(AHTSVs),platformsupplyvessels(PSVs),rigs,etc]andliquidpetroleumgas(LPG)vessels.TheCompanyproposestoinvesttheproceedsjudiciouslyattheappropriatejuncture.Management Discussions and Analysis ReportThereportformsapartoftheDirectors’ReporttotheShareholdersanditincludesdiscussionsonmatters,asrequiredundertheprovisionsofRegulation34ofSEBI(LODR)Regulations,2015.Material Financial and Commercial Transactions of Senior Management PersonnelTherehavebeennomaterialfinancialandcommercial transactionsentered intoby theSeniorManagementPersonnelwhere theyhavepersonalinterestthatmayhaveapotentialconflictwiththeinterestoftheCompany.ThiswasalsoplacedbeforetheBoard.CEO / CFO CertificationAcertificatefromChairmanandManagingDirectorandDirector(Finance)onthefinancialstatementsoftheCompanyandonthematterswhichwererequiredtobecertifiedaccordingtotheRegulation17(8)ofSEBI(LODR)Regulations,2015wasplacedbeforetheBoard.Compliance with Discretionary Requirements under Regulation 27(1) of SEBI (LODR) Regulations,2015.Maintenance of Office and reimbursement of expenses of Non Executive ChairmanAstheCompanyhasanExecutiveChairman,therequirementsofthisclausearenotapplicable.Shareholder Rights - Declaration of financial performanceThefinancialresultsarepostedontheCompany’swebsiteimmediately.TheresultsoftheCompanyarealsopublishedinthenewspapers



withinthetimelimitsprescribedundertheSEBI(LODR)Regulations,2015.Modified Opinions in Audit ReportQualificationsmadebytheStatutoryAuditorsarecontainedintheAuditors’ReportformingpartoftheAnnualReport.TheManagement’sresponsetothequalificationsisalsoincorporatedintheDirectors’Report.TherearenoqualificationsmadebytheComptrollerandAuditorGeneralofIndia.Separate Posts of Chairperson & Chief Executive Officer TheCompanyisengagedinshippingactivitiesandtherefore,currentlythereisnoneedforSeparatePostsofChairperson&ChiefExecutiveOfficer.Incase,theCompanygetsitselfdiversifiedinnewsectors,thecaptionedrequirementwillbeconsidered.Reporting of Internal AuditorTheInternalAuditorisreportingdirectlytotheAuditCommittee.Whistle Blower Policy SCIhasformulatedaWhistleBlowerPolicyasapartofvigilmechanismunderSection177oftheCompaniesAct2013andRegulation22oftheSEBI(ListingObligationsAndDisclosureRequirements)Regulations,2015inadditiontoSCI’swhistleblowerpolicymeasuresasperCentralVigilanceCommission(CVC)guidelines.Thepolicyisavailableatthecompany’swebsiteunder“Profile”section.Additional Disclosures as required under the Guidelines laid down by DPE1.Therewerenomateriallysignificantrelatedpartytransactionsthatmayhavepotentialconflictwiththeinterestsofcompanyatlarge.2. StatusofcompliancewiththePresidentialDirectives,bytheCompany-TherewerenoPresidentialDirectivesreceivedbytheCompany.3. Thereisnoitemofexpendituredebitedinthebooksofaccountswhicharenotforthepurposesofthebusiness.4. TherearenoexpensesincurredwhicharepersonalinnatureandincurredfortheBoardofDirectorsandTopManagement.5. Theofficeandadministrationexpensesasapercentageoftotalexpensesare6.47%inFY2015-16asagainst5.30%inFY2014-15.

Place:MumbaiDated:18.08.2016

ForandonbehalfoftheBoardofDirectorsCapt.B.B.Sinha ,

Chairman&ManagingDirector

DECLARATION OF COMPLIANCE OF CODE OF CONDUCT BY CHAIRMAN & MANAGING DIRECTOR

TheCompanyhasadoptedaCodeofConductfortheBoardMembersandSeniorManagementoftheCompany,whichhasbeenpostedonthewebsiteoftheCompany.

ItisherebyaffirmedthatalltheDirectors&SeniorManagementpersonnelhavecompliedwiththeCodeofConductforthefinancialyear2015-16andaconfirmationtothiseffecthasbeenobtainedfromtheDirectors&SeniorManagementpersonnel.

Place:MumbaiDated:26.05.2016

ForandonbehalfoftheBoardofDirectorsCapt.B.B.Sinha ,

Chairman&ManagingDirector


62

AUDITORS REPORT ON CORPORATE GOVERNANCE TO THE MEMBERS OF THE SHIPPING CORPORATION OF INDIA LIMITED

Wehaveexamined thecomplianceofconditionsofCorporateGovernancebyTHESHIPPINGCORPORATIONOFINDIALIMITED,fortheyearendedMarch31,2016asstipulatedinclause49oftheListingAgreementofthesaidCompanywith stock exchanges for the period 1st April, 2015 to 30thNovember, 2015 and as per the relevantprovisionsofSecuritiesandExchangeBoardofIndia(ListingObligationsandDisclosuresRequirements),2015asreferredtoinRegulation15(2)oftheListingRegulationsfortheperiod1stDecember,2015to31stMarch,2016andasstipulatedintheguidelinesonCorporateGovernanceforCentralPublicSectorEnterprisesissuedbyDepartmentofpublicEnterprises,GovernmentofIndia.

Thecomplianceofconditionsofcorporategovernance is the responsibilityof themanagement.Ourexaminationhasbeenlimitedtoareviewoftheproceduresandimplementationsthereof,adoptedbythecompany,forensuringcompliancewiththeconditionsofCorporateGovernance.Itisneitheranauditnoranexpressionofopiniononthefinancialstatementsofthecompany.

Inouropinionand to thebestofour informationandaccording to theexplanationgiven tousandbasedon therepresentations made by the directors and management, we certify that the company has complied with theconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreement/ListingRegulations,asapplicableandintheguidelineofcorporategovernanceforPublicSectorEnterprises,GovernmentofIndiasubjecttothefollowing:

a) There were no minimum number of independent directors in the Board since September 2014 and to that extent the constitution of the board was not as per the regulatory requirements and as a result the committees could not be constituted as per the regulatory requirements.

b) Consequently, the compliance to the requirements of the minimum number of meetings of the committees* and the gap between the same were not as per the regulatory requirements.

*TheAuditCommitteehadbecomenonfunctionalduetoresignationsfromIndependentDirectorsasaresultnoAuditcommitteemeetingswereheldin2015-16.

AsrequiredbytheGuidanceNoteissuedbytheInstituteofCharteredAccountantsofIndia,wehavetostatethatbased on the report given by the Registrar and the Share transfer agents of the company to the shareholders/investorsgrievancecommittee,asatMarch31st,2016therewerenoinvestorgrievancematteragainstthecompanyremainingunattended/pendingformorethan30days.

We furtherstate thatsuchcompliance isneitheranassuranceas to the furtherviabilityof thecompanynor theefficiencyandeffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

For MKPS & Associates Chartered Accountants FRN 302014ECA Narendra Khandal Partner M No. 065025Place:Mumbai Date: 17-Aug-2016

For GMJ & Co. Chartered Accountants FRN 103429WCA Sanjeev Maheshwari Partner M No.038755Place:Mumbai Date: 17-Aug-2016

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE


COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (6) (b) OF THE COMPANIES

ACT, 2013 ON THE FINANCIAL STATEMENTS OF THE SHIPPING CORPORATION OF INDIA LIMITED FOR THE

YEAR ENDED 31st MARCH 2016

Thepreparationof financial statementsof theShippingCorporationof India Limited for the yearended31March2016inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(theAct)istheresponsibilityofthemanagementofthecompany.ThestatutoryAuditorsappointedbytheComptrollerandAuditorGeneralofIndiaunderSection139(5)oftheActare responsible for expressingopinionon the financial statements underSection143of theActbasedonindependentauditinaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated26May2016.

I,onbehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedasupplementaryauditunder Section 143 (6) (a) of the Act of the financial statements of the Shipping Corporation ofIndiaLimited for theyearended31March2016.ThissupplementaryaudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorsandislimitedprimarilytoinquiriesoftheStatutoryAuditorsandcompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.OnthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditors’report.

For and on behalf of the Comptroller and Auditor General of India

(Tanuja Mittal)Place: Mumbai Principal Director of Commercial Audit and Date: 29th July 2016 Ex- officio Member, Audit Board – I, Mumbai

64

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL

STATEMENTS OF THE SHIPPING CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED 31 MARCH 2016

ThepreparationofConsolidatedFinancialStatementsoftheShippingCorporationofIndiaLimitedfortheyearended31March2016inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(theAct)istheresponsibilityofthemanagementofthecompany.TheStatutoryAuditors appointed by theComptroller andAuditorGeneral of India under Section139(5)readwithsection129(4)oftheActareresponsibleforexpressingopinionontheFinancialStatementsunderSection143readwithsection129(4)oftheActbasedonindependentaudit inaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated27July2016.I, on behalf of the Comptroller and Auditor General of India, have conducted a SupplementaryAudit underSection143(6)(a) readwith section129(4)of theActof theConsolidatedFinancialStatementsof theShippingCorporationof IndiaLimited for theyear ended31March2016.WeconductedaSupplementaryAuditoftheFinancialStatementsoftheShippingCorporationofIndiaLimitedbutdidnotconductSupplementaryAuditoftheFinancialStatementsofIndiaLNGTransportCompany(No.1)Limited(Malta), IndiaLNGTransportCompany(No.2)Limited(Malta), IndiaLNGTransport Company(No.3) Limited (Malta) and India LNG Transport Company(No.4) Limited(Singapore) for the year ended on that date. Further, Sections 139(5) and 143(6)(b) of the Actare not applicable to India LNG Transport Company(No.1) Limited (Malta), India LNG TransportCompany(No.2) Limited (Malta), India LNG Transport Company(No.3) Limited (Malta) and IndiaLNG Transport Company(No.4) Limited (Singapore) being private entities/entities incorporatedin foreigncountriesunder the respective laws, for appointmentof theirStatutoryAuditor nor forconduct of Supplementary Audit. Accordingly, the Comptroller and Auditor General of India hasneitherappointedtheStatutoryAuditorsnorconductedtheSupplementaryAuditoftheseCompanies.ThisSupplementaryAudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorsandislimitedprimarilytoinquiriesoftheStatutoryAuditorsandCompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.Onthebasisofmyauditnothing significant has come tomy knowledgewhichwould give rise to any comment upon orsupplementtoStatutoryAuditors’report.

For and on behalf of the Comptroller and Auditor General of India

(Roop Rashi)Place: Mumbai Principal Director of Commercial Audit and Date: 25 August 2016 Ex- officio Member, Audit Board – I, Mumbai


To The Members of THE SHIPPING CORPORATION OF INDIA LIMITED1. Report on the Standalone Financial StatementsWe have audited the accompanying standalone financialstatementsofTHE SHIPPING CORPORATION OF INDIA LIMITED (“theCompany”),whichcomprisetheBalanceSheetasatMarch 31, 2016, theStatementofProfitandLossandtheCashFlowStatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

2. Management’s Responsibility for the Financial StatementsTheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinSection134(5)oftheCompaniesAct2013(the‘Act’)withrespecttothepreparationandpresentationofthesefinancialstatementstogiveatrueandfairviewofthefinancialposition,financial performance and cash flows of the Company inaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedundersection133oftheAct,readwithRule7of theCompanies(Accounts)Rules, 2014. This responsibility also includesmaintenance ofadequateaccountingrecordsinaccordancewiththeprovisionsof theAct forsafeguardingtheassetsof theCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionand application of appropriate accounting policies; makingjudgmentsandestimatesthatarereasonableandprudent;anddesign, implementation and maintenance of adequate internalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessofaccounting records, relevant tothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

3. Auditors’ ResponsibilityOur responsibility is to express an opinion on these financialstatementsbasedonouraudit.Wehavetakenintoaccounttheprovisions of the Act, the accounting and auditing standardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.WehaveconductedourauditinaccordancewiththeStandardsonAuditingspecifiedundersection143(10)of theAct.ThoseStandards require that we comply with ethical requirementsandplanandperformtheaudittoobtainreasonableassuranceabout whether the financial statements are free frommaterialmisstatement.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.The procedures selected depend on the auditor’s judgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrol relevant to the Company’s preparation of the financialstatements that give a true and fair view, in order to designauditprocedures thatareappropriate in thecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccounting

policiesusedandthereasonablenessoftheaccountingestimatesmadebytheCompany’sBoardofDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriate toprovideabasisforourauditopiniononthestandalonefinancialstatements.

4. Basis for Qualified Opiniona. The direct access of overseas foreign agents to fund

collected on account of freight and other charges without adequate security and regular monitoring mechanism is prone to risk of non /short-payment, the consequential effect of which on the statement of profit and loss remains unascertainable.

b. One of the vessels acquired in the year 2012-13 was under capitalised by 3.50 million USD and the provision for interest @ 2.5% pa on this amount has not been made in the accounts from the year 2012-13. This has resulted in understatement of fixed assets by Rs.20.28 crores, overstatement of profits by `4.98 crores and understatement of liability of `25.25 Cr.

5. OpinionInouropinionandtothebestofourinformationandaccordingto the explanations given to us,except for the effects of the matter described in the ‘Basis for Qualified Opinion’ paragraph above, thefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheCompanyasat31March2016,itsprofitanditscashflowsfortheyearendedonthatdate.

6. Emphasis of MatterWe draw attention of the management to the followingobservationswithoutqualifyingouropinion:Theadjustmentsrequiredintheaccountsnotlikelytobematerialintheopinionofmanagementonconfirmationandreconciliationofoutstandings in respectof tradepayables, trade receivablesandloans&advances(ReferNote42tothefinancialstatements)

7. Report on Other Legal and Regulatory Requirements:a. As required by the Companies (Auditor’s Report) Order,2016 (“the Order”) issued by the Central Government ofIndiaintermsofsub-section(11)ofsection143oftheActandonthebasisofsuchchecksofthebooksandrecordsofthecompanyasweconsideredappropriateandaccordingto the information and explanations given to us, we givein the Annexure-I a statement on the matters specified inparagraphs3and4oftheOrder,totheextentapplicable.

Asrequiredundersubsection(5)ofSection143oftheAct,incaseofaGovernmentcompany,wegiveintheAnnexure-II a statement on the matters specified in the directionsandsub-directions issuedbyOfficeof theComptrollerandAuditorGeneralofIndia.

b. As required by section143(3) of the Act, we report that:i. We have sought and obtained all the information and

INDEPENDENT AUDITORS’ REPORT

66

explanations which to the best of our knowledge andbeliefwerenecessaryforthepurposeofouraudit;

ii. Except for the effects of the matter described in the “Basis for Qualified Opinion” paragraph above,Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptby theCompanyso farasappears fromourexaminationofthosebooks;

iii. The Balance Sheet, Statement of Profit and Loss andCash Flow Statement dealt with by this Report are inagreementwiththebooksofaccount;

iv. Inouropinion,theaforesaidfinancialstatementscomplywith the accounting standards specified under section133 of the Act, read with Rule 7 of the Companies(Accounts)Rules,2014;

v. Thematterdescribedinthe“BasisforQualifiedOpinion”paragraphabove, inouropinion,mayhaveanadverseeffectonthefunctioningoftheCompany;

vi. OnthebasisofwrittenrepresentationsreceivedfromthedirectorsasonMarch31,2016andtakenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualified

asonMarch31,2016,frombeingappointedasadirectorintermsofsection164(2)oftheAct;

vii.With respect to the adequacy of the internal financialcontrols over financial reporting of the Company andtheoperatingeffectivenessofsuchcontrols,refertoourseparatereportinAnnexure-III.

c. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)rules,2014,inouropinionandtothebestofour informationandaccording to theexplanationsgiven tous:i) The Company has disclosed the impact of pendinglitigations on its financial position in Note-30 to theFinancialStatements.

ii) The Company does not anticipate any materialforeseeable losses on long- term contracts includingderivativecontracts.

iii) Therehasbeennodelayintransferringamounts,requiredtobetransferred,totheInvestorEducationandProtectionFundbytheCompany.

For MKPS & AssociatesCharteredAccountantsFirm’sRegn.No.302014E

For GMJ & Co.CharteredAccountantsFirm’sRegn.No.103429W

CA Nikhil Kumar AgrawallaPartnerM.No.157955

CA Sanjeev MaheshwariPartnerM.No.038755

Mumbai26thMay,2016

Mumbai26thMay,2016


ANNEXURE – I TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in Paragraph 7(a)(i) of our Independent Auditors’ Report to the members of the company on the financial statements for the year ended 31st March, 2016

i. a) The Company has maintained proper records showing full particulars including quantitative details andsituationoffixedassets.

b) TheFixedassetsoftheCompanyarebeingphysicallyverifiedbythemanagementonceinthreeyears.ThephysicalverificationoffixedAssetsoftheCompanywasnotcarriedoutduringtheyear.

c) Accordingtotheinformationandexplanationsgiventous,andonthebasisofourexaminationofrecordsofthecompany,thetitledeedsofimmovablepropertiesareheldinthenameoftheCompany.

ii. The physical verification of inventory has been conducted at reasonable intervals by themanagement during the year. Nomaterialdiscrepancieswerenoticedonsuchverification.

iii. TheCompanyhasgrantedloanstofivebodiescorporatecoveredintheregistermaintainedundersection189oftheCompaniesAct,2013

a) Thetermsandconditionsofthegrantofsuchloansareprimafacienotprejudicialtothecompany’sinterest.

b) Inthecaseoftheloansgranted,thetermsofarrangementsdonotstipulateanyrepaymentscheduleandtheloansarerepayableondemand.Paymentofinteresthasbeenstipulated,andthereceiptsthereofareregular.

c) Therearenooverdueamountsformorethanninetydaysinrespectoftheloansgranted.

iv. Thecompanyhasnotgiven/madeanyloans,investmentsandguaranteesandsecurity,whichmayattracttheprovisionsofsection185and186oftheCompaniesAct,2013.Hence,theprovisionsofclause3(iv)ofthesaidOrderarenotapplicabletotheCompany.

v. Inouropinion, andaccording to the informationandexplanationsgiven tous, thecompanyhasnot acceptedanydepositsduringtheyear.Consequently,thedirectivesissuedbyReserveBankofIndiaandtheprovisionsofSections73to76andanyotherrelevantprovisionsoftheCompaniesAct,2013andtherulesframedthereunderarenotapplicable.

vi Wehavebeeninformedbythecompanythatthemaintenanceofcostrecordundersection148(1)oftheActhasnotbeenprescribedbytheCentralGovernment.

vii a) Accordingtotheinformationandexplanationsgiventousandrecordsofthecompanyexaminedbyus,inouropinion,thecompanyisgenerallyregularindepositingtheundisputedstatutoryduesincludingprovidentfund,employees’stateinsurance,income-tax,sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriateauthorities.

Thearrearsofoutstandingstatutoryduesasonthelastdayofthefinancialyearconcernedforaperiodofmorethansixmonthsfromthedatetheybecomepayableareasunder:

Name of the Statute

Nature of the Dues

Amount (` in lacs) Period to which the amount relates

Due Date Date of Payment

IncomeTax TDSonSalary 59.32 2014-15 30.04.2015 29.04.2016

IncomeTax TDSonSalary 11.47 2014-15 30.04.2015 Notpaid

b) Theduesofincometaxorsalestaxorservicetaxordutyofcustomsordutyofexciseorvalueaddedtaxwhichhavenotbeendepositedonaccountofdisputesareasunder:

Sr. No. Name of the statute Nature of the dues Forum where dispute is pending

Finanacial Year to which amount relates

Amount (` in lacs)

1 IncomeTaxAct,1961 U/s195 BombayHighCourt 2003-04to2005-06 9820

2 IncomeTaxAct,1961 TaxU/s143(3) BombayHighCourt 2006-07 2901

3 IncomeTaxAct,1961 TaxU/s143(3) BombayHighCourt 2004-05&2005-06 801

4 IncomeTaxAct,1961 TaxU/s147 ITAT,Mumbai 2004-05&2005-06 2529

68

Sr. No. Name of the statute Nature of the dues Forum where dispute is pending

Finanacial Year to which amount relates

Amount (` in lacs)

5 IncomeTaxAct,1961 Penaltyu/s271(1) CIT(A)Mumbai 2004-05&2005-06 323

6 IncomeTaxAct,1961 TaxU/s143(3) ITAT,Mumbai 2007-08 1013

7 IncomeTaxAct,1961 TaxU/s143(3) CIT(A)Mumbai 2009-10 1180



10 FinanceAct,1994 Servicetax Commissioner(Appeals) 2002-03to2007-08 2

11 APVATAct,2005 VAT CTO 2011-12 10

12 HighCourt,Mumbai VAT CommissionerofSalesTax 1994-95 14

13 HighCourt,Mumbai VAT CommissionerofSalesTax 1993-94 22

Total 19308

viii.According to the recordsof theCompanyexaminedbyusand the informationandexplanationgiven tous, theCompanyhasnotdefaultedinrepaymentofloansorborrowingstoanyfinancialinstitutionorbank.Further,theCompanyhasneitherissuedanydebenturenorborrowedfromGovernment.

ix. TheCompanyhasnot raisedanymoneybywayofpublic issue/followupoffer (includingdebt instruments)during theyear. Inouropinion,thetermloanswereappliedforthepurposeforwhichthosewereraised.

x. WereportthatcertaincomplaintswerereceivedbytheVigilancedivisionofthecompanyduringtheyearforwhichtheinvestigationswereunderprogress.WehaveneithercomeacrossanyinstanceoffraudbytheCompanyoranyfraudontheCompanybyitsofficersoremployeesnoticedorreportedduringtheyearnorhavebeeninformedofanysuchcasebythemanagement.

xi. TheCompanyisagovernmentcompany,andtheprovisionsofsection197isnotapplicabletoit.Thereforeclause(xi)ofofthesaidOrderisnotapplicabletothecompany.

xii. TheCompanyisnotaNidhiCompany,andhencetheprovisionsofclause3(xii)ofthesaidOrderisnotapplicabletothecompany.

xiii.TheCompanydoesnothaveanauditcommitteeandhencetheapprovaloftransactionswithrelatedpartiesbyAuditCommitteeformedundersection177oftheActisnotapplicable.Thetransactionswiththerelatedpartiesareincompliancewithsection188oftheActtotheextentapplicableandthedetailshavebeendisclosedinthefinancialstatementsasrequiredbytheAccountingStandards.

xiv.TheCompanyhasnotmadeanypreferentialallotmentorprivateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyearunderreview.Accordingly,theprovisionsofClause3(xiv)oftheOrderarenotapplicabletotheCompany.

xv. TheCompanyhasnotenteredintoanynon-cashtransactionswithitsdirectorsorpersonsconnectedwithhim.Accordingly,theprovisionsofClause3(xv)oftheOrderarenotapplicabletotheCompany.

xvi.TheCompanyisnotrequiredtoberegisteredunderSection45-IAoftheReserveBankofIndiaAct,1934.Accordingly,theprovisionsofclause3(xvi)oftheOrderarenotapplicabletotheCompany.





Mumbai26thMay,2016

Mumbai26thMay,2016


ANNEXTURE-II TO THE INDEPENDENT AUDITORS’ REPORTDirections under Section 143(5) of the Companies Act, 2013On the Accounts of The Shipping Corporation of India Ltd. for the year 2015-16

SI. No.

Directions Auditor’s comments including Action taken wherever required to be taken

Impact on the Accounts and financial statements

1 Whether the Company has clear title /leasedeeds for freeholdand leasehold landrespectively? If not please state the areaoffreeholdand leasehold land forwhich title /leasedeedsarenotavailable.

As per information given to us, the corporation has clear title/leasedeedsforfreeholdandleaseholdland.Asexplained,theonlyleaseholdlandisthelandonwhichtheShippinghouseofMumbaihasbeenconstructed.

NoImpact

2 Whetherthereareanycasesofwaiver/writeoff debts / loans / interest, etc? If yes, thereasonsthereforeandamountinvolved.

TherehasbeenwriteoffinrespectoftradereceivablesamountingtoRs.2,251,562.71duringtheyearasdetailedbelow:

Name of the party Amount of write off

Reasons for write off

SinostarDsthapa 2,112,689.37 Thepartyisdissolvedduringtheyear,hencetheamountiswritten

off.

AshaAgencies 66,631.88 Thegoodswereabandonedandsamewereauctioned.

CenturionMarine 24,640.00 VATnotrecoverable

LinerMiscCustomer 47,601.46 Thegoodswereabandonedandsamewereauctioned.

NotMaterial

3 Whether proper records are maintainedfor inventories lying with third parties andassets received as gift / grant(s) from theGovernmentorotherauthorities?

Asexplainedtous,therearenoinventorieslyingwiththirdparties.Further,thereisnogiftreceivedfromGovt.orotherauthorities.

NoImpact

Sub-directions under Section 143(5) of the Companies Act, 2013 in respect of the Shipping Corporation of India Limited for the year 2015-16

SI. No.



1 State the area of land under encroachmentand briefly explain the steps taken by theCompanytoremoveencroachments.

Asexplainedtous,thereisnolandunderencroachment. NoImpact

2 (i) Whether amount of (a) bank balance(b) trade receivable (c) trade payables (d)loans and advances for which third partyconfirmation was not made available hasbeenreported.

Thecorporationhassentlettersforbalanceconfirmationofbankbalances, trade receivables and trade payables. However, noconfirmationhasbeensentforloans&advances.Thethirdpartyconfirmationreceivedbyushasbeen175outoftotalnumberofconfirmationbeing2010senttotheparties.

Adjustmentsrequiredintheaccountson

confirmationandreconciliationarenotlikelytobematerial,intheopinionofthemanagement.

70

SI. No.



(ii)Wheresuchbalancehasbeenconfirmedby respective parties, whether it varieswidely from the amounts reflected underrespectiveheadsinthefinancialstatements?Ifso, thedifferenceandaction takenby themanagement to reconcile the differenceshouldbedisclosed.

The balance confirmation received wherever varying with theamountasper thebooksofaccountbymore thanRs.5 lakhs(approx)isshowninAnnexure–‘1’.Asexplained,thenecessarystepsshallbetakenbythemanagementtoreconcilethedifference.



3 Independent verification may be made, ofinformation / inputs furnished to actuary,viz. number of employees, average salary,retirementage,etc.andassumptionsmadebytheactuaryregardingthediscountrate,futurecostincrease,mortalityrate,etc.forarrivingat the provision for liability of retirementbenefits, viz. gratuity, leave encashment,post-retirementmedicalbenefits,etc.

Theinformation/inputsfurnishedbythecompanytotheactuaryforvaluationoftheprovisionforliabilityofretirementbenefits,i.e.number of employees, average salary, retirement age etc havebeenreviewedandthesamearebasedonactualforthecurrentyear. The assumptionmadeby the actuary for valuation of theliability of retirement benefits i.e., discount rate, morality rate,futurecost increaseareconsistentovertheperiod.TheactuaryhasconfirmedinitsreportthattheliabilityofretirementbenefitshasbeenvaluedaspertheprovisionsofAccountingStandard-15.

NoImpact





Mumbai26thMay,2016

Mumbai26thMay,2016


ANNEXURE – III TO THE INDEPENDENT AUDITORS’ RE-PORTReferred to in Paragraph 7(b) (vii) of our Independent Auditors’ Report to the members of the company on the financial statements for the year ended 31st March, 2016Report on the Internal FinancialControlsunderClause (i) ofSub-section3ofSection143oftheAct.1. We have audited the internal financial controls over financialreportingofTHE SHIPPING CORPORATION OF INDIA LIMITED (“theCompany”)asofMarch31,2016inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls2. The Company’s management is responsible for establishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontrol over financial reporting criteria established by theCompany considering the essential components of internalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControls over Financial Reporting issued by the Institute ofChartered Accountants of India (ICAI). These responsibilitiesincludethedesign,implementationandmaintenanceofadequateinternal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimely preparation of reliable financial information, as requiredundertheAct.

Auditor’s Responsibility3. Our responsibility is to express an opinion on the Company’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNote on Audit of Internal Financial Controls Over FinancialReporting(the“GuidanceNote”)andtheStandardsonAuditingdeemed tobeprescribedundersection143(10)of theAct tothe extent applicable to an audit of internal financial controls,bothapplicabletoanauditofinternalfinancialcontrolsandbothissued by the ICAI. Those Standards and the Guidance Noterequire thatwecomplywithethical requirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequate internal financial controls over financial reportingwasestablishedandmaintainedand if suchcontrolsoperatedeffectivelyinallmaterialrespects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financial controlssystemoverfinancialreportingandtheiroperatingeffectiveness.Our audit of internal financial controls over financial reportingincludedobtaininganunderstandingofinternalfinancialcontrolsover financial reporting, assessing the risk that a materialweakness exists, and testing and evaluating the design andoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementof

thefinancialstatements,whetherduetofraudorerror.5. Webelievethattheauditevidencewehaveobtainedissufficientandappropriate toprovideabasisforourauditopinionontheCompany’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls Over Financial Reporting6. ACompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatements for external purposes in accordancewith generallyacceptedaccountingprinciples.Acompany’s internalfinancialcontrol over financial reporting includes those policies andproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurance that transactions are recorded as necessary topermit preparation of financial statements in accordance withgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and (3) provide reasonable assurance regarding prevention ortimelydetectionofunauthorizedacquisition,useordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting7. Becauseoftheinherentlimitationsofinternalfinancialcontrolsover financial reporting, including the possibility of collusionor improper management override of controls, materialmisstatements due to error or fraud may occur and not bedetected. Also, projections of any evaluation of the internalfinancial controls over financial reporting to future periods aresubjecttotheriskthattheinternalfinancialcontroloverfinancialreporting may become inadequate because of changes inconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Qualified Opinion8. According to the information and explanation given to usand based on our audit, the following material weaknesshave been identified in the operating effectiveness of theCompany’sinternalfinancialcontroloverfinancialreportingasat31stMarch,2016.

a) Freight&otherchargescollectiondonebycertainoverseasagentsonbehalfoftheCompanyaregettingcreditedtotheirbankaccounts,insteadofthebankaccountofthecompany,whichintheabsenceofadequatesecuritycouldpotentiallyresult in the non/ short receipt of such collections by thecompany in the event of either fraudulent intention of theagent,aswashappenedinthepastoranydisputebyeitherparty.

b) Thetimelyverificationofclaimsofagentsneedstobefurtherstrengthened.

c) Thecontrolonthetimelyreversalofstalechequeneedstobe

72

furtherstrengthened.d) The control on the booking of bunker consumption to thecorrectvoyageofthevesselsneedstobestrengthened.

e) The control in the system to ensure that the bunkerconsumption incaseof timecharter is recovered fromthecharterinsteadofdebitingtotheconsumptionaccountneedstobefurtherstrengthened.

f) Thesystemhastoensurethatthetaxisdeductedatsourceonalltheprovisionforexpensemade.

Inouropinion,theCompanyhas,inallmaterialrespects,maintainedadequate internal financial controls over financial reporting as ofMarch31,2016basedontheinternalcontroloverfinancialreportingcriteria established by the Company considering the essential

componentsofinternalcontrolstatedintheGuidanceNoteonAuditof Internal Financial Controls Over Financial Reporting issued bythe InstituteofCharteredAccountantsof India andexcept for the possible effects of the material weakness described above on the achievement of objectives of the control criteria, theinternalfinancial controls over financial reporting of the company wereoperatingeffectivelyasatMarch31,2016.Wehaveconsideredthematerialweaknessidentifiedandreportedabove in determining the nature, timing and extent of audit testsapplied inourauditof thefinancialstatementsof thecompanyasof31stMarch,2016andthesematerialweaknessdonotaffectouropinionontheStandaloneFinancialStatementsoftheCompany.





Mumbai26thMay,2016

Mumbai26thMay,2016


Annexure-1GL Code GL Head Vendor

CodeVendor Name Currency Balance as per

SCI on 31.12.2015 Balance as per

confirmation Difference Nature

of Account

5000000000 VENDORRECONA/C-GENERAL 100191 ALCOS INR - 2,052,969.00 2,052,969.00

Trad

e Pa

yabl

e

5000000000 VENDORRECONA/C-GENERAL 100403 KAMYABSHIPCHANDLERS INR - 1,562,061.50 1,562,061.50

5000000000 VENDORRECONA/C-GENERAL 100409 ROTOMECHAUTOMATIONLIMITED INR - 1,066,229.00 1,066,229.00

5000000000 VENDORRECONA/C-GENERAL 100412 SHIVTECHMARINECONTROLSYSTEMS& INR (538,068.00) 4,487,744.00 3,949,676.00

5000000000 VENDORRECONA/C-GENERAL 101085 AKMARINEENGINEERS INR - 2,354,206.00 2,354,206.00

5000000000 VENDORRECONA/C-GENERAL 101281 SFMARINEOFFSHORE&IND.SUPPLYCO INR (119,025.00) 4,128,180.00 4,009,155.00

5000000000 VENDORRECONA/C-GENERAL 101410 DALWINMARINETURBOENGGPVTLTD INR (215,069.00) 802,633.00 587,564.00

5000000000 VENDORRECONA/C-GENERAL 101565 PARAMHYDRAULICSPVTLTD INR - 2,732,438.56 2,732,438.56

5000000000 VENDORRECONA/C-GENERAL 101620 BANSALMARINE(S.B.) INR - 920,212.00 920,212.00

5000000000 VENDORRECONA/C-GENERAL 200750 MARINEELECTRICAL&REFRIGERATION INR (1,326,853.00) 24,997,276.00 23,670,423.00

5000000000 VENDORRECONA/C-GENERAL 200752 ABBINDIALIMITED INR (808,482.00) 5,506,763.00 4,698,281.00

5000000000 VENDORRECONA/C-GENERAL 200763 THEORIENTENGINEERING&SHIPREPA INR (480,996.00) 16,633,169.00 16,152,173.00

5000000000 VENDORRECONA/C-GENERAL 200765 DOCKING&ENGINEERINGCO.(VISA INR (646,400.00) 4,084,820.00 3,438,420.00

5000000000 VENDORRECONA/C-GENERAL 200776 CARBONICINDUSTRIES INR (83,116.00) 2,155,769.00 2,072,653.00

5000000000 VENDORRECONA/C-GENERAL 200788 HICOSHIPPINGINSULATIONPVTLTD INR (222,556.00) 14,632,346.00 14,409,790.00

5000000000 VENDORRECONA/C-GENERAL 200795 HYPRECISIONHYDRAULIK INR - 969,707.00 969,707.00

5000000000 VENDORRECONA/C-GENERAL 200800 ALBATROSSMARINESERVICES INR (50,000.00) 3,069,798.00 3,019,798.00

5000000000 VENDORRECONA/C-GENERAL 200847 FUJITECHNICALSERVICESPVTLTD INR - 806,050.00 806,050.00

5000000000 VENDORRECONA/C-GENERAL 200849 FRICONS INR - 2,524,641.00 2,524,641.00

5000000000 VENDORRECONA/C-GENERAL 200886 SUPREMEHYDROENGINEERINGPVTLTD INR (138,827.00) 2,284,563.00 2,145,736.00

5000000000 VENDORRECONA/C-GENERAL 200929 NCGBENGINEERINGCOPVTLTD INR (99,582.00) 3,436,703.00 3,337,121.00

5000000000 VENDORRECONA/C-GENERAL 201336 NIREEKSHANENGG.SERVICESPVTLTD INR - 899,810.00 899,810.00

5000000000 VENDORRECONA/C-GENERAL 201570 AKSHAYCONTROLS&SYSTEMSPVTLTD INR (5,174,957.21) 25,443,330.95 20,268,373.74

5000000000 VENDORRECONA/C-GENERAL 201631 C-METENGINEERINGINDIAPVTLTD INR (2,756,839.95) 9,748,196.00 6,991,356.05

5000000000 VENDORRECONA/C-GENERAL 201652 KENMARKTECHSOLUTIONS INR (11,907.00) 8,246,801.00 8,234,894.00

5000000000 VENDORRECONA/C-GENERAL 201658 MARINEENGGCONSULTANCY&SERVIMU INR (11,689.50) 3,005,349.00 2,993,659.50

5000000000 VENDORRECONA/C-GENERAL 201675 RASTEKPVTLTD INR (1,933,437.00) 23,078,287.00 21,144,850.00

5000000000 VENDORRECONA/C-GENERAL 201679 SSKENGINEERINGWORKS(INDIA)PVT INR (1,784,588.00) 30,273,600.00 28,489,012.00

5000000000 VENDORRECONA/C-GENERAL 201685 SEA-HOOKENGINEERINGWORKS INR (703,689.00) 10,688.00 (693,001.00)

5000000000 VENDORRECONA/C-GENERAL 201686 SEAMANINDUSTRIES INR - 514,685.00 514,685.00

5000000000 VENDORRECONA/C-GENERAL 201701 TRISHULINDUSTRIES INR (2,724,895.00) 17,147,045.00 14,422,150.00

5000000000 VENDORRECONA/C-GENERAL 201730 S.B.TEKNIK INR (886,136.00) 1,667,008.00 780,872.00

5000000000 VENDORRECONA/C-GENERAL 201829 BPENGINEERINGWORKS INR (111,948.00) 1,922,333.00 1,810,385.00

5000000000 VENDORRECONA/C-GENERAL 202672 D.S.MARINEREPAIRS INR - 3,174,036.00 3,174,036.00

5000000000 VENDORRECONA/C-GENERAL 203292 A.S.REFRIGERATIONCO. INR (329,605.00) 10,296,692.87 9,967,087.87

5000000000 VENDORRECONA/C-GENERAL 203489 M/SALLWINMARINESERVICES INR (8,218,384.00) 13,551,504.40 5,333,120.40

5000000000 VENDORRECONA/C-GENERAL 300061 MARINEELECTRONICSANDNAVIGATION INR - 1,010,052.00 1,010,052.00

5000000000 VENDORRECONA/C-GENERAL 300985 ZFINDIAPRIVATELIMITED INR - 1,145,251.64 1,145,251.64

5000000000 VENDORRECONA/C-GENERAL 1100203 WESTCOASTLAUNCHSERVICE INR - 747,701.00 747,701.00

5000000000 VENDORRECONA/C-GENERAL 1100827 KAMALBASU&CO. INR (744,844.00) 2,103,140.00 1,358,296.00

5000000000 VENDORRECONA/C-GENERAL 300910 FlamingoGRPGeneralTradingLLC. AED - 1,035,474.67 1,035,474.67

5000000000 VENDORRECONA/C-GENERAL 600070 InternationalAgenciesBahrain BHD (993.07) 3,852.93 4,846.00

CNY (6,570,662.08) 6,570,662.08

CNY 356,392.62 (356,392.62)

5000000000 VENDORRECONA/C-GENERAL 600015 CLBliner EUR 712,503.50 870,263.11 157,759.61

5000000000 VENDORRECONA/C-GENERAL 300193 J.P.SAUER&SOHNMASCHINENBAUGMBH EURO - 15,723,694.00 15,723,694.00

5000000000 VENDORRECONA/C-GENERAL 300355 WartsilaJapanLtd. EURO - 91,474.01 91,474.01

74

GL Code GL Head Vendor Code

Vendor Name Currency Balance as per SCI on 31.12.2015

Balance as per confirmation

Difference Nature of

Account

5000000000 VENDORRECONA/C-GENERAL 300737 SalzgitterMaschinenbauAG EURO - 25,192.62 25,192.62

Trad

e Pa

yabl

e

5000000000 VENDORRECONA/C-GENERAL 300836 DAMENSCHELDEMARINESERVICESPTE EURO - 55,346.10 55,346.10

5000000000 VENDORRECONA/C-GENERAL 300631 CORTLANDLIMITED GBP - 11,697.00 11,697.00

5000000000 VENDORRECONA/C-GENERAL 400892 INDIANREGISTEROFSHIPPING GBP - 13,906.00 13,906.00

5000000000 VENDORRECONA/C-GENERAL 600631/837

ChampionShipping,HongKong HKD (57,417.61) 97,471.04 154,888.65

5000000000 VENDORRECONA/C-GENERAL 300290 HARUKAWAMARINEPARTSCO.LTD. JAPANYEN - 2,635,848.00 2,635,848.00

5000000000 VENDORRECONA/C-GENERAL 400011 FUJITECHNICALSERVICESPVTLTD JPY - 11,111,621.00 11,111,621.00

5000000000 VENDORRECONA/C-GENERAL 300103 SKIPPERELECTRONICSAS NOK - 97,710.00 97,710.00

5000000000 VENDORRECONA/C-GENERAL 400293 KONGSBERGMARITIMEAS NOK - 855,835.11 855,835.11

5000000000 VENDORRECONA/C-GENERAL 600027 FreightmanAB,Norway NOK 327,541.69 36,731.00 (290,810.69)


ChampionShipping,Taiwan NT$ 37,312,044.00 1,193,975.00 (36,118,069.00)

5000000000 VENDORRECONA/C-GENERAL 600008 BhackerHajiAbdulla,Muscat OMR 26,241.45 11,148.73 (15,092.72)

5000000000 VENDORRECONA/C-GENERAL 600834 BhackerHajiAbdulla,Muscat OMR (6,995.84) 6,870.31 13,866.15

5000000000 VENDORRECONA/C-GENERAL 600835 FreightmanAB,Sweden SEK 2,009,979.00 2,113,729.00 103,750.00

5000000000 VENDORRECONA/C-GENERAL 100303 AVALONTECSINGAPOREPTELTD SGD - 16,979.95 16,979.95

5000000000 VENDORRECONA/C-GENERAL 600013/109/918

ChampionShipping,China US$ 157,830.37 225,861.48 68,031.11

5000000000 VENDORRECONA/C-GENERAL 100109 DREWAMEROID(S)PTELTD USD - 85,575.74 85,575.74

5000000000 VENDORRECONA/C-GENERAL 100203 VIJAYENGG&MACHINERYCOMPANY USD - 171,100.00 171,100.00

5000000000 VENDORRECONA/C-GENERAL 102021 SAMARTHENGINEERING USD (2,262.00) 4,917,959.00 4,915,697.00

5000000000 VENDORRECONA/C-GENERAL 101080 PANASIACO.LTD. USD (2,240.00) 41,150.00 38,910.00

5000000000 VENDORRECONA/C-GENERAL 101226 M/SUPSCMARINESERVICESPTELTD USD (7,000.00) 61,376.04 38,910.00

5000000000 VENDORRECONA/C-GENERAL 300035 GOLTENSCO.LTD. USD - 14,078.50 14,078.50

5000000000 VENDORRECONA/C-GENERAL 300085 TextainerEquipment USD (16,963.23) 373,164.57 356,201.34

5000000000 VENDORRECONA/C-GENERAL 300280 JOHNSONCONTROLSAIRCONDITIONING USD - 14,000.00 14,000.00

5000000000 VENDORRECONA/C-GENERAL 300429 RMSMARINESERVICECO.LTD. USD (6,781.15) 49,798.51 43,017.36

5000000000 VENDORRECONA/C-GENERAL 300450 MASTERSYSTEMSLLC USD (4,355.00) 48,440.00 44,085.00

5000000000 VENDORRECONA/C-GENERAL 300535 J.O.EngineeringCo.,Ltd. USD (114,611.60) 78,060.29 (36,551.31)

5000000000 VENDORRECONA/C-GENERAL 300747 DAEHWAENGINEERINGSERVICECO.,LTD. USD (40,607.40) 107,267.92 66,660.52

5000000000 VENDORRECONA/C-GENERAL 300859 TOMASCORPORATION USD (6,705.00) 90,730.05 84,025.05

5000000000 VENDORRECONA/C-GENERAL 400016 INDIANREGISTEROFSHIPPING USD (128,973.00) 856,103.70 727,130.70

5000000000 VENDORRECONA/C-GENERAL 400041 SMECAUTOMATIONFZE USD (18,833.00) 187,442.00 168,609.00

5000000000 VENDORRECONA/C-GENERAL 400773 MencastSubseaPteLtd USD - 12,032.00 12,032.00

5000000000 VENDORRECONA/C-GENERAL 400830 ZHOUSHANIMCYONGYUESHIPYARD&ENG USD (2,735,281.00) 2,452,705.00 (282,576.00)

5000000000 VENDORRECONA/C-GENERAL 400913 PETRONAVICOMPANYLIMITED USD - 15,496.00 15,496.00

5000000000 VENDORRECONA/C-GENERAL 400936 VOYAGEMARINEAUTOMATION USD - 15,894.00 15,894.00

5000000000 VENDORRECONA/C-GENERAL 1000085 CHEMOILADANIPTELTD USD (35,996.70) 76,314.00 40,317.30

5000000000 VENDORRECONA/C-GENERAL 1000205 WorldFuelServices USD (681,653.44) 1,490,794.51 809,141.07

USD (49,313.55) 49,313.55

5000000000 VENDORRECONA/C-GENERAL 600096 Penavico,Ningbo USD 690,789.42 - (690,789.42)

5000000000 VENDORRECONA/C-GENERAL 600903 Penavico,Ningbo USD 496,183.54 131,855.49 (364,328.05)

USD (1,129,857.44) 1,129,857.44


MartiShipping,Turkey USD (173,081.60) 356,206.70 529,288.30

5000000000 VENDORRECONA/C-GENERAL 600051 MiddleEastShipping USD (12,872.88) - 12,872.88

5000000000 VENDORRECONA/C-GENERAL 600854 MiddleEastShipping USD - 9,514.87 9,514.87


Particulars Note No. As at31st March, 2016

` In lakhs

As at31st March, 2015

` In lakhs

I EQUITY AND LIABILITIES

(1) Shareholders' Funds:(a)Sharecapital 1 46580 46580(b)Reservesandsurplus 2 644459 606780

(2) Non-current liabilities(a)Long-termborrowings 3 459801 556994(b)OtherLong-termliabilities 4 9 41(c)Long-termprovisions 5 14451 13797

(3) Current liabilities(a)Shorttermborrowings 6 - 3500(b)Tradepayables 7 98961 97695(c)Othercurrentliabilities 8 179067 163217(d)Short-termprovisions 9 6763 4257

TOTAL 1450091 1492861

II ASSETS(1) Non-current assets

(a) Fixed Assets(i)Tangibleassets 10 1160282 1143237(ii)Intangibleassets 11 58 1209(iii)Capitalwork-in-progress 12 - 49093

(b) Non-current investments 13 2734 1296(c) Long-term loans and advances 14 45277 51321(d) Other non-current assets 15 1242 1215

(2) Current assets(a)Currentinvestments 16 3795 7718(b)Inventories 17 8558 9193(c)TradeReceivables 18 70882 78782(d)CashandBankbalances 19 128625 125616(e)Short-termloansandadvances 20 20051 13930(f)Othercurrentassets 21 8587 10251

TOTAL 1450091 1492861

The accompanying Significant Accounting Policies & Note No. 1 to 46 are an integral part of the financial statements.

As per our report of even date attached hereto. For and on behalf of the Board of Directors,

For MKPS & Associates, For GMJ & Co.,CharteredAccountants CharteredAccountantsFR.No.302014E FR.No.103429W

CA Nikhil K Agrawalla CA Sanjeev Maheshwari Partner PartnerMembershipNo.157955 MembershipNo.38755

Mumbai, Dated the 26th May, 2016

Dipankar Haldar B B Sinha Mrs. H. K. JoshiED(LA&Co.sec) Chairman& Director(Finance) ManagingDirector


The Shipping Corporation of India Limited STANDALONE BALANCE SHEET AS AT 31ST MARCH 2016

76

The Shipping Corporation of India Limited STANDALONE STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH 2016

Particulars Note No.

Year ended 31st March, 2016

` In lakhs

Year ended 31st March, 2015

` In lakhs

I. Revenue from operations 22 407828 415375II. Other Operating Revenue 23 3411 3269III. Other Income 24 16480 40117IV. Total Revenue 427719 458761 V Expenses:

CostofServicesRendered 25 233956 279324EmployeesBenefitExpense 26 45738 41363Otherexpenses 27 18147 14135Financecosts 28 16060 17940DepreciationandAmortisationon:a)TangibleAssets 10 56782 75768b)IntangibleAssets 11 1213 1247

57995 77015ImpairmentofAssets 40 13638 -Total expenses 385534 429777

VI. Profit/(loss) before Prior Period, Exceptional and Extraordinary items and tax (IV-V)

42185 28984

VII. Income / (Expenses) pertain ing to Prior Period (Net) 29 194 (1371)VIII. Profit /(loss) before Exceptional and Extraordinary items and

tax (VI+VII)42379 27613

IX. Exceptional items - -X. Profit before Extraordinary items and tax (VIII-IX) 42379 27613XI Extraordinary items - -XII Profit before tax (X-XI) 42379 27613XIII Tax expense:

Currenttax 7100 7520MatCreditadjusted (2,450) -

4650 7520XIV Profit/(Loss) for the year (XII-XIII) 37729 20093 XV Earnings per equity share of Face Value of ` 10 each: 33

Basic&Diluted(includingextraordinaryitems) 8.10 4.31Basic&Diluted(excludingextraordinaryitemsnetoftax) 8.10 4.31









Particulars 2015-16 ` In lakhs

2014-15 ` In lakhs

(A) CASH FLOW FROM OPERATING ACTIVITIES

NetprofitbeforeTax,extraordinaryitems&priorperiodadjustments 42185 28984

ADJUSTMENTSFOR:

Depreciation 57995 77015

ImpairmentLossonAssets 13638 -

InterestIncome (11320) (14589)

Interestexpense 16060 17940

DividendReceived (625) (672)

Surplus/LossonsaleofFixedAssets(otherthanships) (1245) (187)

SurplusonSaleofShips - (12055)

Provisionfordoubtfuldebts&Advances(Net) 2533 5221

Debts&Advanceswrittenoff 23 3

Provisionfordimunitioninvalueofinvestment - -

Excessprovisionswrittenback (851) (544)

Incomefromrescindmentofcontracts (1952) (12400)

74256 59732

Operatingprofitbeforeworkingcapitalchanges (i) 116441 88716

Adjustmentsfor:Increaseinworkingcapital

(a)Trade&otherreceivables 6300 129132

(b)Inventories 635 9852

(c)Tradepayables 13803 (8653)

20738 130331

Cashgeneratedfromoperations (ii) 137179 219047

Taxpaid(NetofRefunds) (4650) (7711)

Cashflowbeforepriorperiodadjustments 132529 211336

Priorperiodadjustments(Net) 194 (1371)

NetCashFromOperatingActivities (A) 132723 209965

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase/AcquisitionofFixedAssets(includingAssetsunderconstruction)

(38439) (71592)

SaleofFixedAssets 1250 12472

IncomefromInvestments 3180 3593

InterestReceived 8912 11832

Sale/PurchaseofInvestments 2485 2335

AdvancestoJointVentureCompanies 457 3652

IncomefromRescindmentofcontracts 1952 12400

Netcashusedininvestingactivities (B) (20203) (25308)

The Shipping Corporation of India Limited Standalone Cash Flow Statement

78


2014-15 ` In lakhs

C) CASH FLOW FROM FINANCING ACTIVITIES

LoansBorrowed/Repaid (93530) (142380)

DividendsPaid(Incl.DividendTax) (7) (5)

InterestCharges (15924) (18402)

StaffWelfareActivities(Net) (15) (48)

CorporateSocialResponsibilityActivities (35) (99)

Netcashflowfromfinancingactivities (C) (109511) (160934)

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) 3009 23723

Cash&CashBankBalancesattheBeginingoftheYear 125616 101893

Cash&CashBankBalancesattheendoftheYear. 128625 125616

ClosingCash&BankBalancesincludes:

Cash&Cashequivalents 42814 11269

Otherbankbalances 85811 114347









NOTE “1” - Share Capital

Particulars As at 31st March, 2016

` In lakhs

As at 31st March, 2015

` In lakhs

A Authorised:1,00,00,00,000EquitySharesof`10each(Prev.Yr.1,00,00,00,000EquitySharesof`10each) 100000 100000

B Issued, Subscribed and Paid Up:46,57,99,010EquitySharesof`10eachfullypaidup(Prev.Yr.46,57,99,010EquitySharesof`10eachfullypaidup) 46580 46580

TOTAL 46580 46580

C Reconciliation of Equity Shares As at 31st March, 2016 As at 31st March, 2015

No. of shares Amount in ` lakhs No. of shares Amount in ` lakhs

OpeningBalance 465799010 4657990100 465799010 4657990100Add:BonussharesissuedduringtheYear - - - -Less:Sharesboughtback - - - -ClosingBalance 465799010 4657990100 465799010 4657990100

D Details of shareholders holding more than 5% sharesS. No Name of Shareholder

As at 31st March, 2016 As at 31st March, 2015No. of shares held % of Holding No. of shares held % of Holding

1 PresidentofIndia 296942977 63.75 296939920 63.752 LifeInsuranceCorporationofIndia 65796899 14.13 65801520 14.13

Rights/Preference/Restriction attached to Equity SharesTheCompanyhasonlyoneclassofEquityshareshavingparvalueof`10.Eachshareholderofequitysharesisentitledtoonevotepershare.IntheeventofliquidationoftheCompany,theholderofequityshareswillbeentitledtoreceivetheremainingassetsofthecompanyafterdistributionofallpreferentialallotmentinproportiontotheirshareholding.ThedividendwheneverproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.TheCompanydoesnothaveanyholdingcompany.Therearenosharesreservedforissueunderoptionandcontract/commitmentforthesaleofshares/disinvestment.FortheperiodoffiveyearsimmediatelyprecedingthedateasatwhichtheBalanceSheetisprepared,noshareshavebeenissuedforconsiderationotherthancash,noshareshavebeenissuedasbonusshares&noshareshavebeenboughtback

NOTE “2” - Reserves & Surplus

Particulars Note No. As at 31st March, 2016

` In lakhs


` In lakhs1 Capital Reserve AsperlastBalancesheet 14298 14298Add:TransferfromAppropriation - -

14298 142982 Securities Premium Reserve AsperlastBalancesheet 52177 52177Less:ShareIssueExpenses - -

52177 521773 General Reserve AsperlastBalancesheet 403982 403982Add:TransferfromP&LAppropriation - -Add:TransferfromTonnageTaxReserve(Utilised) 138900

542882 403982

NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

80


` In lakhs


` In lakhs4 Tonnage Tax Reserve AAsperlastBalancesheet 50 -Add:TransferfromP&LAppropriation 9000 50

9050 505 Tonnage Tax Reserve (Utilised) BAsperlastBalancesheet 138900 138900Add:TransferfromTonnageTaxreserve - -Less:TransfertoGeneralReserve 138900 -

- 1389006 Corporate Social Responsibility Reserve CAsperlastBalancesheet 704 803Add:TransferfromP&LAppropriation - -Less:Amountutilised 35 99

669 7047 Sfaff Welfare Fund DAsperlastBalancesheet 141 88Add:TransferfromAppropriation/P&L 140 117Add:InterestEarned 11 14Less:Amountutilised 26 78

266 1418 Balance in Statement of Profit and Loss BalanceBroughtforwardfromLastYear (3472) (22846)Add:Profit/(Loss)fortheYear 37729 20093Less:APPROPRIATION:DepreciationAdjustment - 568TonnageTaxReserve 9000 50StaffWelfareFund 140 101Balancecarriedforward 25117 (3472)

TOTAL 644459 606780Notes:

A Tonnage Tax Reserve Thisreserveisastatutoryreserveasperrequirementofsection115VToftheIncomeTaxAct,1961forthepurposeofcomplyingwiththeconditionsforapplicabilityoftonnagetaxscheme

B Tonnage Tax Reserve (Utilised)Tonnage tax reservebeingStatutoryReserve,asper requirementofsection115VTof the IncometaxAct,1961whichhasbeenutilisedbutawaitingtransfertoGeneralReserve

C Corporate Social Responsibility ReserveReservecreatedasperthecorporatesocialresponsibiltypolicyofthecompany.Itiscreatedforcontributiontobettermentofsocietyandenvironment

D Staff Welfare FundThisisafundcreatedforthewelfareactivitiesoftheemployees



NOTE - “3” - Long-Term Borrowings

ParticularsAs at 31st March, 2016 As at 31st March, 2015

Non-Current Current* Non-Current Current*` In lakhs ` In lakhs ` In lakhs ` In lakhs

Secured Term LoansFrom BanksInINR A 843 1729 2575 1729InForeigncurrency B 458958 128255 554419 121093TOTAL C 459801 129984 556994 122821

A) SecuredbyFleethavingNetblockof`11311lakhs(Prev.Yr.`11867lakhs)B) SecuredbyFleethavingNetblockof`1065439lakhs(Prev.Yr.` 1080248lakhs)C) MaturityProfile

1-2years 2-3years 3-4years Beyond4yearsSecuredLoans 124291 121824 104227 109458

* RepresentscurrentmaturitiesofLongtermborrowingsincludedin"OtherCurrentLiabilities"

NOTE - “4” - Other Long term Liabilities

ParticularsAs at

31st March, 2016 ` In lakhs


` In lakhs

SecurityDeposits 9 41TOTAL 9 41

NOTE - “5” - Long term Provisions

ParticularsAs at



` In lakhsProvision for employee benefit

1 LeaveEncashment 4534 43722 PostRetirementMedicalScheme* 4254 37843 Pension 5663 5641

TOTAL 14451 13797

Long term provision As at 31st March 2015

Provided during the year

Utilised during the year

Amount reversed As at 31st March 2016

LeaveEncashmentLiability 4372 162 - - 4534PostRetirementMedicalScheme* 3784 470 - - 4254Pension 5641 22 - - 5663

13797 654 - - 14451* Thisincludes`2171lakhs(Prev.yr.`1880lakhs)beingprovisionmadefornewPostRetirementMedicalScheme(w.e.f01.01.2007)whichisaDefinedContributionPlan.

NOTE - “6” - Short-Term Borrowings

ParticularsAs at



` In lakhsSecuredLoans*-fromBanksrepayableondemand - 3500

TOTAL - 3500

*SecuredagainstTermDepositwiththeBank


82

NOTE “7” - Trade Payables

ParticularsAs at



` In lakhsTradePayablesi)DuesofMicro&SmallEnterprises 515 547ii)Others 98446 97148

TOTAL 98961 97695

Disclosures under Micro, Small & Medium Enterprises Development Act, 2006 (the Act)Principalamountremainingunpaidtosuppliersattheendoftheperiod 515 547Interestaccruedandduetosuppliersontheaboveamount Nil NilPaymentmadetosuppliers(otherthaninterest)beyondtheappointedday,duringtheperiod Nil NilInterestpaidtosuppliersundertheAct,(OtherthanSection16) Nil NilInterestpaidtosuppliersundertheAct,(Section16) Nil NilInterestdueandpayabletosuppliersundertheAct,forpaymentsalreadymade Nil NilInterestaccruedandremainingunpaidattheyearend. Nil NilTheinformationhasbeengiveninrespectofsuchvendorstotheextenttheycouldbeidentifiedasMicro&SmallenterprisesonthebasisofinformationavailablewiththeCompany.

NOTE - “8” - Other current Liabilities

ParticularsAs at



` In lakhs1 Currentmaturitiesoflong-termdebt 129984 1228212 Interestaccruedbutnotdueonborrowings 3033 28973 Incomereceivedinadvance-UnfinishedVoyages 2215 4266

4 UnpaidDividend 46 53

5 AdvancesandDeposits 10859 3737

6 SecurityDeposits 960 884

7 SubsidyforPassengerservice(Myanmmar) 99 159

8 OtherLiabilities

-Employeerelated 11178 9018

-StatutoryLiabilities 967 883

-PayabletoRelatedParties 18356 16178

-Others 1370 2321

31871 28400

TOTAL 179067 163217

NOTE - “9” - Short term Provisions

ParticularsAs at



` In lakhsProvision for Employee Benefits

1 EmployeeBenefits-LeaveEncashment 476 685-PostRetirementMedicalScheme 133 126

609 811



ParticularsAs at



` In lakhs2 Others

-ForeignTaxation 1440 1440-Insurance&cargoclaims 974 830-Lossesonunfinishedvoyage* 1089 --Offhireclaims 2651 1176

TOTAL 6763 4257

*Represents estimated loss on unfinished voyage recognised in accounts.

Short term provision As at 31st

March 2015Provided during

the yearUtilised during

the year Unused Amount

reversed As at 31st

March 2016

Employee Benefits

-LeaveEncashment 685 1470 1678 - 477

-PostRetirementMedicalScheme 126 155 149 - 132

Others

Foreign Taxation 1440 - - - 1440

Insurance & cargo claims 830 246 102 - 974

Losses on unfinished voyage - 1089 - - 1089

Offhire claims 1176 1485 - 10 2651

4257 4445 1929 10 6763

NOTE “10” - Tangible Assets

PARTICULARS GROSS BLOCK DEPRECIATION Impairment Loss provided

during the year

NET BLOCK Cost as at 31-3-15

Additions Deductions/ Adjustments

Cost as at 31-3-16

up to 31-3-15

Provided during the

year

Deductions/ Adjustments

up to 31-3-16

As at 31-3-16

As at 31-3-15

Fleet 1,710,779 86,983 - 1,797,762 569,757 56,433 - 626,190 13,638 1,157,934 1,141,022

OwnershipContainers 2,214 - 1,001 1,213 2,214 - 1,001 1,213 - - -

FreeholdLand 271 - - 271 - - - - - 271 271

Buildings 1,313 372 - 1,685 576 24 - 600 - 1,085 737

OwnershipFlatsandResidentialBuildings 318 - 3 315 177 5 2 180 - 135 141

Furniture,Fittings&Equipmentsetc. 7,372 115 480 7,007 6,345 316 480 6,181 - 826 1,027

MotorVehicles 92 - 1 91 84 4 1 87 - 4 8

Total - A 1,722,359 87,470 1,485 1,808,344 579,153 56,782 1,484 634,451 13,638 1,160,255 1,143,206

Assetsheldfordisposal

31 - 4 27 - - - - - 27 31

Total - B 31 - 4 27 - - - - - 27 31

Total (A + B) 1,722,390 87,470 1,489 1,808,371 579,153 56,782 1,484 634,451 13,638 1,160,282 1,143,237Previous Year Total 1,741,721 28,689 47,631 1,722,779 550,606 76,337 47,401 579,542 - 1,143,237

Notes : (1)AdditionstoFleetinclude` 37631lakhs(Prev.yr.̀ 28260lakhs)onaccountofcurrencyexchangedifferenceadjustedasperSignificantAccountingPolicyNo.8(c)

(2)BorrowingcostandInterestcapitalisedduringtheyearis`Nil(Prev.yr.`Nillakhs).(3)Impairmentlossonvesselsamountingto`13638lakhs(Prev.yr.Nil)hasbeenprovidedduringtheyear.


84

(4)BuildingsincludecostofShippingHouseatMumbai`134lakhs(Prev.yr.`134lakhs)whichisonleaseholdlandwhereinthevalueofleaseisconsideredas`1.

(5)OwnershipFlatsandResidentialBuildingsinclude:CostofsharesandbondsinCooperativeSocieties/Companyoffacevalue`0.73lakhs(Prev.yr.`0.73lakhs).

NOTE “11” - Intangible Assets

PARTICULARS GROSS BLOCK AMORTISATION NET BLOCK Cost as at 31-3-15


Cost as at 31-3-16

up to 31-3-15

Provided during the

year


up to 31-3-16

As at 31-3-16

As at 31-3-15

ComputerSoftware 7,007 62 - 7,069 5,798 1,213 - 7,011 58 1,209

Total 7,007 62 - 7,069 5,798 1,213 - 7,011 58 1,209

Previous Year’s Total 6,909 98 - 7,007 4,551 1,247 - 5,798 1,209

NOTE -”12” Capital Work in Progress

ParticularsAs at



` In lakhs

1. Construction Work in Progress - Fixed AssetsAssetsunderConstructionexcludingadvance - 43125

2. Construction Period Expenses a.Interest - 2105b.Otherdirectlyattributableexpenses - 80c.Exchangefluctuation - 3783

- 5968TOTAL - 49093

Note “13” - Non - Current Investments

ParticularsAs at



` In lakhsTrade InvestmentsInvestments in Equity InstrumentsUnquoted

A In Joint Venture 2908(Prev.yr.2908)OrdinarySharesof2.33EuroeachfullypaidofIndiaLNGTransportCompany(No.1)Ltd.* 3 32908(Prev.yr.2908)OrdinarySharesof2.33EuroeachfullypaidofIndiaLNGTransportCompany(No.2)Ltd.* 3 32600 (Prev.yr.2600)OrdinarySharesof1USDeach fullypaidofIndiaLNGTransportCompany(No.3)Ltd.* 1 14,268,732(Prev. Yr. 2,107,612) Ordinary Shares of 1 USDeachfullypaidofIndiaLNGTransportCompany(No.4)Ltd.* 2721 1289

2728 1296B Others 5,00,00,000 (Prev. yr. 5,00,00,000) Ordinary Shares of`10eachfullypaidofSethusamudramCorp.Ltd. 5000 5000Less:Provisionfordimunitioninvalueofinvestment 5000 5000

- -3438EquitySharesof̀ 20/-eachofScindiaSteamNavigationCompanyLtd.,fullypaid(`0.30lakhs;Prev.yr.`0.30lakhs)

-



ParticularsAs at



` In lakhs“Less:LossonMarkedtoMarket(`Nil,Prev.yr.`Nil)“ - - -60,000EquitySharesof`10/-eachofWoodlandSpecialityHospitalLtd.(Prev.yr.Nil) 6 6 0

TOTAL 2734 1296

Totalunquotedinvestments 2734 1296Totaldimunitioninvalueofunquotedinvestments 5000 5000

*Thesharesarepledgedtobanksagainstloansgivenbythemtojointventurecompanies.

A SethusamudramCorporationLtd.(SCL),aSpecialPurposeVehiclewasincorporatedon06.12.2004fordevelopingtheSethusamudramChannelProjectwithTuticorinPortTrust,EnnorePortLtd,VisakhapatnamPorttrust,ChennaiPortTrust,DredgingCorporationofIndiaLtd.,ShippingCorporationofIndiaLtd.andParadipPortTrustastheshareholders.SCIparticipatedwithaninvestmentof`5000lakhs(previousyear`5000lakhs).Thedredgingworkissuspendedfrom17.09.2009consequentuponthedirectionoftheHon'bleSupremeCourtofIndia.Asthereisnoprogressintheprojectsincethen,theManagementhadprovidedfordimunitiontowardstheinvestmentinFY2012-13.

B IndiaLNGTransportCompaniesNo.1&2Ltd.aretwojointventurecompaniespromotedbytheCorporationandthreeJapanesecompaniesViz.M/SMitsuiO.S.K.linesLtd.(MOL),M/SNipponYusenKabushikiKaishaLtd(NYKLines)andM/SKawasakiKisenKaishaLtd(KLine)alongwithM/SQatarShippingCompany(QShip),Qatar.SCIandMOLarethelargestshareholders,eachholding29.08%shareswhileNYKLine17.89%,KLine8.95%&QShipholds15%respectively.TheSharesheldbytheCorporationandotherpartners inthetwojointventureCompanieshavebeenpledgedagainst loansprovidedbylenderbankstothesecompanies. IndiaLNGTransportCompanyNo.1LtdownsandoperatesoneLNGtankerSSDishaandIndiaLNGTransportCompanyNo.2LtdownsandoperatesoneLNGTankerSSRaahi.TheentireoperationandmanagementofthetwocompanieswastakenoverbySCIfrom1stJanuary2009.

C IndiaLNGTransportCompanyNo.3Ltd. is the3rd jointventurecompanywhichownsandoperatesoneLNGtankerMTAseem.ThecompanyispromotedbytheCorporationanditsthreeJapanesepartnersviz.MOL,NYKLines,KLinealongwithM/SQatarGasTransportCompany(QGTC)andM/sPetronetLNGLimited(PLL)whoaretheotherpartners.SCIandMOLarethelargestshareholderswith26%shareeach,whileNYK,KLine,QGTCandPLLhold16.67%,8.33%,20%and3%respectively.TheSharesheldby theCorporationandotherpartners in the joint venturecompanyhavebeenpledgedagainst loansprovidedby lenderbanks to thesecompanies.TheentireoperationandmanagementofthecompanywastakenoverbySCIfromApril2013.

D IndiaLNGTransportCompanyNo.4Ltd.isaJointVentureCompanyincorporatedinSingaporeinNovember2013andispromotedbytheCorporationwithitsthreeJapanesepartnersvizMOL,NYKandKLine.SCI,NYK,MOLareholding26%shareeach,whilethebalance22%iswithKLine.Thecompanywillconstruct,ownandoperateoneLNGtankerofabout173,000CBMandwouldbeundera19-yearTimeCharterAgreementwithcharterersM/sPetronetLNGLimited.ThetankerwillbedeliveredinSeptember2016andwillbeoperatingfromBarrowIslands,AustraliatoKochi,India.

NOTE - “14” - Long term Loans & Advances

ParticularsAs at



` In lakhs

Unsecured, Considered Good (unless otherwise stated)1 Loans&AdvancestoRelatedParties(ReferNoteNo.31)

28631 29088

2 AdvanceTax(Net) 10493 68493 Other Loans & AdvancesLoanstoEmployees(OfthisLoanof`1324lakhs,Prev.Yr.`953lakhsissecured)

1825 1462

Excess-GratuityFund 4328 5578Others - 8344

TOTAL 45277 51321


86

NOTE - “15” - Other Non Current Assets

ParticularsAs at



` In lakhs

1 *Accruedinterestonloanstoemployees(Secured,consideredgood)

475 448

2 Deposits-Unsecured 767 767TOTAL 1242 1215

*Includes due from Directors & other Officers - Nil (Prev. Yr. Nil)

Note - “16” Current Investments

ParticularsAs at



` In lakhs

A Joint Venture Investment in Equity Instruments Unquoted - valued at cost46,060,000 (Prev. Yr.46,060,000) Registered Shares ofRials5,000eachofIranoHindShippingCo.Ltd.,Tehran,Fullypaid(including46,053,385BonusShares)* 39 39295,029 (Prev.yr.295,029)sharesof1USDeach fullypaidofISIMaritimeLtd.(SharesarereceivedasagiftfromIrano-HindShippingCo.Ltd.) - -500 (Prev.yr.500) shares of `10 each fully paid up ofJaladhiShippingServicesPvt.Ltd. (Sharesare receivedasgiftfromIrano-HindShippingCo.(P.J.S) - -1,00,000(Prev.yr.1,00,000)sharesof`10eachfullypaidupofSAILSCIShippingCompanyPvt.Ltd. 10 10

49 49B Investments in Mutual Funds Unquoted -

valued at Net Asset Value3,73,327.494UnitsofUTIMoneyMarketFund-InstitutionalPlan-DirectPlan-DailyDividendReinvestment 3746 7669

TOTAL 3795 7718TotalQuotedInvestments - -

TotalUnquotedInvestments 3795 7718

* 30SharesareheldinthenameofSCIDirectorsandarewithIranoHindShippingCo.Ltd,Tehran

i TheCompanyholds49%interestinIranoHindShippingCo.Ltd.ajointventurecompanyincorporatedinIranonwhichsanctionhasbeenimposedbyUnitedNationsOrganisation(UN).TheexposureoftheCompanyintheJointVentureislimitedto`39lakhs.Ithasbeendecidedbythejointventurepartnerstodissolvethiscompany.

ii TheCompanyenteredintoajointventureagreementwithSteelAuthorityofIndiaLtd.withparticipationinterestintheratioof50:50andpromotedajointlycontrolledentitySAILSCIShippingPvt.Ltd.(SSSPL).Thesaidcompanywasincorporatedon19.05.2010withanauthorisedsharecapitalof`1000lakhs.TheCompanyhassubscribedequitycapitalof100000sharesof`10eachamountingto`10lakhs.Ithasbeendecidedbythejointventurepartnerstowindupthiscompany.

NOTE - “17” - Inventories

ParticularsAs at



` In lakhs

1 FuelOil 8558 86462 Stores,Spares - 547

TOTAL 8558 9193Inventoriesarevaluedatcostasdeterminedby“MovingAveragePrice”methodornetrealisablevaluewhicheverislowerunlessotherwisestated.



NOTE - “18” - Trade Receivables

ParticularsAs at



` In lakhs

1 Over Six Months from the due date of paymenti) Unsecured,ConsideredGood 27550 25586ii) Unsecured,ConsideredDoubtful 16813 14511

44363 40097Less:ProvisionforDoubtfulReceivables 16813 14511

27550 255862 Other Debts

i)Unsecured,ConsideredGood 43332 53196ii)Unsecured,ConsideredDoubtful - -

43332 53196Less:ProvisionforDoubtfulReceivables - -

43332 53196TOTAL 70882 78782

NOTE - “19” - Cash & Bank Balances

ParticularsAs at



` In lakhs

A. CASH AND CASH EQUIVALENT

1 BankBalances

CurrentAccount 8423 9732InterBankTransfers - 1TermDepositmaturingwithin3months 34368 1513

42791 112462 CashBalances,IncludingImprest 9 93 MarginMoneyforBankGuarantee 14 14B. OTHER BANK BALANCES

1 TermDepositmaturingbetween3to12months 51504 1038912 TermDepositmaturingafter12months 34110 102853 EarmarkedBalancewithBanktowardsunpaiddividend 46 534 StaffWelfarefundBalancesInFixeddepositAccount 151 118

TOTAL 128625 125616

Fixeddepositamountingto`24829lakhs(PrevYr:`25439lakhs)arepledgedwithbanksforBorrowings

NOTE - “20” - Short term Loans & Advances

ParticularsAs at



` In lakhs

A. Advance recoverable in cash or in kind or for value to be received:a) From Related Parties (ReferNoteno.31fordetails)*

InterestReceivable(Unsecured,ConsideredGood) 15 15


88

ParticularsAs at



` In lakhs

b) From Employees

i)Secured,ConsideredGood 192 167ii)Unsecured,ConsideredGood 903 460

1095 627c) From Otheri)Unsecured,ConsideredGood 9534 8278ii)Unsecured,ConsideredDoubtful 1404 1339

10938 9617Less:ProvisionforDoubtfulAdvances 1404 1339

9534 82782 Other recoverable / adjustableUnsecured,ConsideredGooda)CENVATCreditonServiceTax/VATetc 7540 4503b)PrepaidExpenses 602 312c)Others 12 12

8154 48273 Advance Service Tax 1064 -4 MAT CreditOpening - -Add:Creditduringtheyear 2450 -Less:MATCreditAvailed 2450 -

- -5 Sundry Deposits

Unsecured,ConsideredGood 189 183TOTAL 20051 13930

*IncludesduefromDirectors&otherOfficers-Nil(Prev.Yr.Nil)

NOTE - “21” - Other Current Assets

ParticularsAs at



` In lakhs

1 InterestAccruedonInvestments/BankDeposits 1948 20762 InterestAccruedonLoanstoemployees* 44 903 UnfinishedVoyagesExpenses 5823 65154 ClaimRecoverable 772 1570

TOTAL 8587 10251*IncludesduefromDirectors&otherOfficers-Nil(Prev.Yr.Nil)

NOTE - “22” - Revenue from Operations

ParticularsYear Ended


Year Ended31st March, 2015

` In lakhs

1 Freight 278373 279365

2 CharterHire 101165 109013

3 Demurrage 20253 18913






` In lakhs

4 ContractRevenue:Coreshippingactivities 447 463Incidentalactivities 4011 4079Reimbursementofoverheads 3579 3542

8037 8084TOTAL 407828 415375

NOTE - “23” - Other Operating Revenues




` In lakhs

1 Training&Consultancyfee 1633 12372 SundryReceipts(Core) 52 1883 SundryReceipts(Incidental) 84 634 ExcessProvisions&UnclaimedCreditWrittenBack 851 5445 RecoveryofInsurance&PIClaims 791 1237

TOTAL 3411 3269

NOTE - “24” - Other Income




` In lakhs

1 ProfitonSaleofFixedAssetsa) SaleofShips(Net) - 12055b) SaleofOtherFixedAssets 1245 187

1245 122422 Intereston:a) FixedDepositswithBanks 8690 9362b) FromRelatedParties-JointVenture(ReferNoteno.31) 2555 2867c) LoanstoEmployees 69 64d) Others 6 2296

11320 145893 DividendFromMutualFund 625 6724 OtherMiscellaneousIncome 14 575 NetgainonForeignCurrencyTransaction/Translation 1324 -6 IncomefromRescindmentofContracts 1952 124007 Profitonsaleofbunker - 157

TOTAL 16480 40117

NOTE - “25” - Cost of services rendered




` In lakhs

1 Direct Operating Expenses :AgencyFees 2340 2183Brokerage 3098 3613Commission 5412 5714


90




` In lakhs

Stevedoring,Dunnage,CargoExpensesEtc.&SlotExpensesOnJointSectorContainerServices(Net)

16798 16418

Marine,LightAndCanalDues 34565 36066FuelOil(Net) 63748 118420WaterCharges 331 335

2 Hire Of Chartered Steamers 50381 473723 Other Indirect Operating Expenses Victualling,TransferAndRepatriationAndOtherBenefits 3966 4730Stores&Spares 18308 16926SundrySteamerExpenses 2239 1915RepairsAndMaintenanceandSurveyExpenses 24633 17264InsuranceAndProtection,IndemnityClubFees&InsuranceFranchise 8137 8368

TOTAL 233956 279324

NOTE - “26” - Employees Benefit Expenses




` In lakhsA Floating staffWages,BonusAndOtherExpensesOnFloatingStaff 26840 24959Gratuity 931 220ContributionToProvidentFund 318 369

B Shore Staff Salaries,Wages,Bonusetc 16215 14729Gratuity 383 75ContributionToProvident&OtherFunds 850 831

C RemunerationtoDirectors 201 180 TOTAL 45738 41363

NOTE - “27” - Other Expenses




` In lakhs1 Other ExpensesPower&Fuel 583 520Rent 298 224RepairsandMaintenance-Building 616 635-Others 1360 1638Insurance 90 136RatesandTaxes 218 248Auditors'Remuneration* 63 59EstablishmentCharges 1626 1554Advertisement&Publicity 246 161Legal&professional 1209 641Postage,TelephoneTelegram&Telex 16 133Printing&stationery 158 182Training,Seminar&ConferenceFee 387 385Travel&Conveyance 399 363






` In lakhsDirectors'SittingFees - 11Directors'TravelExpenses 34 55NetlossonForeignCurrencyTransaction/Translation - 1,169Debts/Advanceswrittenoff 23 3InterestandPenalties 1529 51BankCharges 534 58ServicetaxineligbleforCENVAT 3481 98

2 ProvisionsProvisionforOffHireEtc. 1596 574ProvisionforDoubtfulDebtsandAdvances 2533 5221ForeignTaxation 59 86Provisionforlossonunfinishedvoyage 1089 (70)

TOTAL 18147 14135*Auditors'Remunerationincludes:AuditFees 32 26CertificationWork 27 17Travelling&OutofPocketExpenses 4 16

TOTAL 63 59

NOTE - “28” - Finance Cost




` In lakhs1 Interest Payments on:RupeeTermLoanfromBanks/FinancialInstitutions 284 422ForeignCurrencyTermLoanfromBanks/FinancialInstitutions 15628 15462Others 37 1492

15949 173762 Other Borrowing Cost 111 564

TOTAL 16060 17940

NOTE - “29” – Income/Expenses relating to previous years




` In lakhs1 Income:BunkerRecovery 6 -CharterHire (784) (1640)Freight 30 (291)Remunerationfrommanagedvessels - 125Others 4 9

Total Income (744) (1797)2 Expenditure:Stevedoringcharges - (951)Brokerage&commission 8 45Fueloil 186 191Salaries-Shorestaff (1) -Charterhirepayments 112 61Sundrysteamercharges - (124)


92




` In lakhsCurrencyExchangeDifference - 133Stores,RepairsandMaintenance 30 296Marine,light&canaldues - 69Insurance&P&I 102 (203)Demurrage - (161)ServiceTax/CENVAT (1370) 217Establishmentcharges - 31Others (5) (30)

Total Expenses (938) (426)NET INCOME /(EXPENDITURE) 194 (1371)

NOTE –“30”– Contingent liabilities & Commitments

ParticularsAs at



` In lakhs

Contingent Liabilities and Commitments (to the extent not provided for)I Claim against the company not acknowledged as debts –A ClaimmadebyM/s.ChokhaniInternationalLtd.towardsdrydockexpensespendingbeforeHighCourt,Chennai

4881 4662

B CargoLoss,Freight,Demurrage,SlotPayments,FuelCost,otheroperationalclaimsandCustomdutydisputeddemand.(AscertifiedbytheManagement)

30523 5083

C DisputeddemandofStatutoryDues(AscertifiedbytheManagement) 116414 18972a)IncomeTax&SalesTax 19306 18970b)ServiceTax 97108 2

II Guarantees given by the Banksonbehalfofthecompany 4907 4745onbehalfoftheJointVenturetotheextentoftheCompany’sshare. 7183 6735

III Undertaking cum Indemnity given by Company - -IV Cargo Claims covered by P&I Club 4779 8396V Bonds/Undertakings given by the Company to Customs Authorities. 28341 25635VI Corporate Guarantees/UndertakingsA InrespectofJointVentures NotAscertained NotAscertainedB Others 3957 5820

Commitments: i. Estimatedamountofcontractsoncapitalaccount,remainingtobeexecutedoncapitalaccountandhencenotprovidedfor(NetofAdvancepaid)(AscertifiedbytheManagement)

- 68

ii Uncalledliabilityonsharesandotherinvestmentspartlypaid - -iii Othercommitments(AscertifiedbyManagement) - -

NOTE –“31”– Related Party Disclosures Namesofrelatedpartyentitieswithwhomtransactionswerecarriedoutduringtheperiod:

Joint Venture Companies: Key Management Personnel:

1. IndiaLNGTransportCo.(No.1)Ltd. 1. ShriB.B.Sinha

2. IndiaLNGTransportCo.(No.2)Ltd. 2. ShriA.K.Gupta(retiredon31.12.2015)

3. IndiaLNGTransportCo.(No.3)Ltd. 3. ShriS.Narula

4. IndiaLNGTransportCo.(No.4)Ltd. 4. ShriS.Thapar(retiredon30.09.2015)



5. SAILSCIShippingPvt.Ltd. 5. ShriS.VKher(w.e.f01.10.2015)

6. IranoHindShippingCo.Ltd 6. ShriK.Devadas

7. SmtH.K.Joshi

8. ShriDipankarHaldar

i) Thefollowingtransactionswerecarriedoutwithrelatedparties:

Nature of Transaction Name of the Party 2015-16 (` in lakhs)

2014-15(` in lakhs)

Investmentsmadeduringtheyear IndiaLNGTransportCo.(No.4)Ltd. 1432 NIL

Total 1432 NIL

Investmentbalancesatyearend IranoHindShippingCo.Ltd. 39 39

IndiaLNGTransportCo.(No.1)Ltd. 3 3




SAILSCIShippingPvtLtd. 10 10

Total 2777 1345

InterestIncome IndiaLNGTransportCo.(No.1)Ltd. 617 739




Total 2555 2867

Expensesreimbursed IndiaLNGTransportCo.(No.1)Ltd. 37 43



Total 77 122

Loansrealisedduringtheyear IndiaLNGTransportCo.(No.1)Ltd. 1055 2099



IndiaLNGTransportCo.(No.4)Ltd. - 1525

SAILSCIShippingPvt.Ltd. - 38

Total 2317 6176

Loanbalancesatyearend IranoHindShippingCo.Ltd. 23 23





Total 28630 29088

InterestReceivableatyearend IndiaLNGTransportCo.(No.1)Ltd. 1 2




Total 15 15


94


2014-15(` in lakhs)

Interestamountcompoundedintoprincipal IndiaLNGTransportCo.(No.1)Ltd. - -

IndiaLNGTransportCo.(No.2)Ltd. - -



Total 175 1340

Management&AccountingFeesearned IndiaLNGTransportCo.(No.1)Ltd. 432 399



Total 1305 1199

GuaranteeFeesreceived IndiaLNGTransportCo.(No.1)Ltd. 13 12




Total 58 56

PayableonaccountofShip IranoHindShippingCo.Ltd. 18356 16178

Total 18356 16178

Interestcharged IranoHindShippingCo.Ltd. 1221 -

Total 1221 -

(ii) Key Management Personnel For the Year ended 31/03/2016(` in lakhs)

For the Year ended 31/03/2015(` in lakhs)

1. Remuneration 224 221

2. Loansrecoveredduringtheperiod - 0.11

3. Loanamountsdueasattheendoftheperiod - -

4. Maximumamountdueduringtheperiod - 0.11

NOTE –“32”– Joint Venture InformationDetailsofJointVenture,asrequiredbyAS-27“FinancialReportingofInterestsinJointVentures”aregivenbelow:i) Details of Joint Venture Interest

Name Description of Interest

Country of Incorporation

Percentage of Interest As on 31.03.16

(As on 31.03.15)

Other Venturers Share 31.03.16

(As on 31.03.15)1. IranoHindShippingCompanyLtd. Equity Iran 49%(49%) * IRISL51.00%(51.00%)2. IndiaLNGTransportCompany(No.1)Ltd. Equity Malta 29.08%(29.08%) *MOL29.08%(29.08%),

*NYKLines17.89%(17.89%),

*KLine8.95%(8.95%),*Qship15.00%(15.00%)

3. IndiaLNGTransportCompany(No.2)Ltd. Equity Malta 29.08%(29.08%) *MOL29.08%(29.08%),*NYKLines17.89%(17.89%),

*KLine8.95%(8.95%),*Qship15.00%(15.00%)




Country of Incorporation


(As on 31.03.15)


(As on 31.03.15)4. IndiaLNGTransportCompany(No.3)Ltd. Equity Malta 26.00%(26.00%) *MOL26.00%(26.00%),

*NYKLines16.67%(16.67%),

*KLine8.33%(8.33%),*QGTC20.00%(20.00%),*PLL3.00%(3.00%)

5. IndiaLNGTransportCompany(No.4)Ltd. Equity Singapore 26.00%(26.00%) *MOL26.00%(26.00%),*NYKLines26.00%(26.00%),

*KLine22.00%(22.00%)6. SAILSCIShippingPvt.Ltd. Equity India 50.00%(50.00%) *SAIL50.00%(50.00%)*IRISL- Islamic Republic of Iran Shipping Line *MOL - Mitsui O.S.K.lines Ltd., *NYK Lines- Nippon Yusen Kabushiki Kaisha Ltd,*KLine-KawasakiKisenKaishaLtd*QShip-QatarShippingCompany.,*PLL-PetronetLNGLtd.,*SAIL-SteelAuthority IndiaLtd.,*QGTC-QatarGasTransportCompanyII) Company’s Interest in the Joint Venture (` In Lakhs)

Name As on Assets Liabilities For the period ended

Income Expenditure

1 IranoHindShippingCompanyLtd. 20.03.2015 46854 45890 20.03.2015 836 74492 IndiaLNGTransportCompany(No.1)Ltd. 31.12.2015 29404 27162 31.12.2015 4438 33403 IndiaLNGTransportCompany(No.2)Ltd. 31.12.2015 29341 27101 31.12.2015 4822 33694 IndiaLNGTransportCompany(No.3)Ltd. 31.12.2015 38915 45470 31.12.2015 5209 45665 IndiaLNGTransportCompany(No.4)Ltd.* Not

AvailableNot

AvailableNot

AvailableNot

AvailableNot

AvailableNot

Available6 SAILSCIShippingPvt.Ltd.(Unaudited) 31.03.2016 7 0.14 31.03.2016 0.43 0.39

*AccountsofIndiaLNGTransportCompany(No.4)Ltdisnotyetfinalized.

NOTE –“33”– Earnings per share

Particulars For the Year ended 31/03/2016

For the Year ended 31/03/2015

A Profit/(-)Lossaftertax(`inlakhs) 37729 20093B WeightedaveragenumberofEquityShares(Nos) 465799010 465799010C Basic&DilutedEarningsperShare(in`)beforeExtraordinaryItems 8.10 4.31D Basic&DilutedEarningsperShare(in`)afterExtraordinaryItems 8.10 4.31E NominalValueperEquityShare(in `) 10.00 10.00TheCompanydoesnothaveanyoutstandingdilutedpotentialequityshares.Consequently,thebasicanddilutedearningspershareoftheCompanyremainthesame.

NOTE –“34”– Segment Reporting

ParticularsFor the Year ended

31/03/2016 ` in lakhs


` in lakhs1 Segment Revenue

i) LinerSegment 53471 90185ii) BulkSegment 322480 304651iii) TechnicalandOffshore 33955 34891iv) Others 1333 1086v) Unallocated 5161 12191

Total 416400 443004


96

ParticularsFor the Year ended

31/03/2016 ` in lakhs


` in lakhs2 Segment ResultsProfit/(Loss)beforetax&interesti) LinerSegment (15900) 1571ii) BulkSegment 49357 4599iii) TechnicalandOffshore 10401 11310iv) Others 1008 720

Total 44866 18200 Add:UnallocatedIncome(Netofexpenditure) 2253 12764Add:Interest(Net) (4740) (3351)

Total Profit before tax 42379 27613 3 Segment Assets

i) LinerSegment 99329 104429ii) BulkSegment 1069998 1093337iii) TechnicalandOffshore 130440 139277iv) Others 531 515

Total 1300298 1337558UnallocableCorporateAssets 149793 155303

Total 1450091 14928614 Segment Liabilities

i) LinerSegment 91753 79119ii) BulkSegment 85898 61318iii) TechnicalandOffshore 10747 8041iv) Others 464 230

Total 188862 148708UnallocableCorporateLiabilities 570190 690793

Total 759052 8395015 Capital Expenditure during the year

i) LinerSegment 1163 1032ii) BulkSegment 80942 23550iii) TechnicalandOffshore 4877 3734iv) Unallocated 549 312

Total 87531 286286 Depreciation

i) LinerSegment 2755 2841ii) BulkSegment 49925 67296iii) TechnicalandOffshore 5315 6879

Total 57995 770167 Provisions

i) LinerSegment 2770 4396ii) BulkSegment 15566 1248iii) TechnicalandOffshore 367 110iv) Unallocated 10 58

Total 18713 58128 Impairment Loss charged to P & L

i) LinerSegment - -ii) BulkSegment 12563 -iii) TechnicalandOffshore 1075 -

Total 13638 -



Notes:-1. Segmentdefinitions-Linersegmentincludesbreakbulk,containertransport,passengervesselsandalsopassengervessels&researchvesselsmanagedonbehalfofotherorganisations.Bulksegmentincludestankers(bothcrudeandproduct),drybulkcarriers,gascarriers,phosphoricacidcarriersandLNGvesselsmanagedonbehalfofjointventurecompanies.Technical&Offshoreservicessegmentincludecompanyownedoffshorevessels,offshorevesselsmanagedonbehalfofotherorganisationsandincomefromtechnicalconsultancy.OtherssegmentincludeincomeearnedfromMaritimeTrainingInstitute.Unallocableitemsandinterestincome/expensesaredisclosedseparately.

2. Allexpense&revenueitemsareallocatedvesselwisewhereverpossible.Expense&revenueitemsthatcannotbeallocatedvesselwiseareallocatedonthebasisofunitcumGRTmethodi.e.50%allocatedonthebasisofunits&balance50%onthebasisofadjustedGRT.Forvesselswhicharebiggerthan20000GRT,GRTisadjustedtoonethirdofGRTor20000GRT,whicheverismore.

3. Agentadvancesareallocatedtosegmentintheratioofexpensesbookedbytheagentsduringtheyear.

NOTE – “35” Disclosures of Employee benefits as per Accounting Standard-15 “Employees benefits”, as defined there in, are given belowA Description of type of employee benefitsa) TheCompanyofferstoitsemployee’sdefinedbenefitsplansintheformofGratuity,leaveencashmentandpostretirementMedicalScheme

i. Gratuity a)Representsbenefitstoemployeeonthebasisofnumberofyearsofservicerenderedbyemployee.Theemployeeisentitledtoreceivethesameonretirementorresignation.

b)SCIhasformedatrustforgratuitywhichisfundedbytheCompanyonaregularbasis.Theassetsofthetrusthavebeenconsideredasplanassets.

ii. LeaveEncashment Representsunavailedleavetothecreditoftheemployeeandcarriedforwardinaccordancewithtermsofagreement.

iii. PostRetirementMedicalBenefitScheme

Representsbenefitsgiventoemployeessubsequenttoretirementonthehappeningofanyunforeseeneventresultinginmedicalcoststotheemployee

b) TheCompanyofferstoitsemployeesdefinedcontributionplanintheformofprovidentfund,postretirementmedicalscheme(Neww.e.f.01.01.2007)andpensioncontribution

Thedetailsoftheplanareasfollows:-

i. ProvidentFund Itisacontributionmadeonmonthlybasis@12%ofmonthlyBasicandDAtothePFTrustwhocreditsannualinterestonPFbalances.Thecorpusaccumulatedispaidonretirementoftheemployee.

ii. PostRetirementMedicalScheme(Neww.e.f.01.01.2007)

Itisacontribution@4%ofmonthlyBasicandDAtowardsprovisionofemployees’medicalexpensesincurredafterretirement.

iii. Pensioncontribution Itisacontribution@12%ofmonthlyBasicandDAtowardsprovisionofannuityafterretire-mentofemployees.

B Movement in the net liability recognized in the balance sheet are as follows: (` In lakhs)

Particulars Gratuity Leave Encashment Post Retirement Medical Benefit Scheme

AsAt 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

Status Funded Funded Unfunded Unfunded Unfunded Unfunded

Atthebeginningoftheperiod 10426 9797 5057 4906 2030 1858

Currentservicecost 709 1249 1138 1037 3 -

InterestCost 771 859 335 393 156 165

Actuarial(gains)andlosses(includingforprioryears)

945 (426) 158 (139) 176 127

CurtailmentPeriod

BenefitsPaid (1457) (1053) (1678) (1085) (149) (120)

Attheendoftheperiod 11394 10426 5010 5057 2216 2030


98

C Analysis of Percentage of defined Benefit obligation into funded and unfunded: (` In lakhs)

Particulars As At 31/03/2016 As At 31/03/2015

TotalAmountofdefinedbenefitobligation 18620 17512

AmountoffundedDefinedbenefitobligation 11393 10425

Percentageoffundeddefinedbenefitobligation 61.19 59.53

Percentageofdefinedbenefitobligationnotfunded 38.81 40.47

D Movement in Fair Value of plan assets (` In lakhs)


For the period ended on 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

Openingvalueoffairvalueofplanassets 16003 15600 NIL NIL NIL NIL

ExpectedReturnonplanassets 1375 1408 NIL NIL NIL NIL

BenefitsPaid (1457) (1053) NIL NIL NIL NIL

Actuarialgain/(loss)onplanassets (199) 48 NIL NIL NIL NIL

Closingvalueoffairvalueofplanassets 15722 16003 NIL NIL NIL NIL

E Reconciliation of the present value of defined obligation and fair value to the assets and liabilities recognized in the balance sheet:

(` In lakhs)



Presentvalueofobligationsattheendoftheperiod

11394 10426 5010 5057 2216 203

Less:fairvalueofassetsasatthebalancesheetdate

15722 16003 NIL NIL NIL NIL

Net(Liability)/Assetdisclosedinthebalancesheet

4328 5577 (5010) (5057) (2216) (2030)

F Total Expense recognized in the statement of profit and loss (` In lakhs)



CurrentServiceCost 709 1249 1138 1037 3 NIL

InterestCost 771 859 335 393 156 165

Expectedreturnonplanassets (1375) (1408) NIL NIL NIL NIL

Actuarial(gains)andlosses 945 (427) 158 (139) 176 127

PastServiceCost NIL NIL NIL NIL NIL NIL

Losses(gains)oncurtailmentsandsettlements

NIL NIL NIL NIL NIL NIL

BenefitsPaid* NIL NIL (1678) (1140) (149) (120)

Actuarial(gains)/lossonplanassets 199 (48) NIL NIL NIL NIL

Chargedtoprofitandloss 1249 226 (47) 151 186 173

* Forgratuity,thebenefitsarepaidbythetrustandarenotdebitedtotheprofit&lossoftheCompany.ForleaveencashmentandPostRetirementMedicalBenefitScheme,thebenefitspaidaredebitedtothestatementofProfitandLoss.



G (i) Percentage of category of plan assets to fair value of plan assets (`In lakhs)

Particulars As At 31/03/2016 As At 31/03/2015Fair Value % of Total Fair Value % of Total

InvestmentinGovernmentsecurities 5898 37.51 5398 33.74InvestmentinBonds 3872 24.63 3853 24.08Investmentindepositsincludingbankbalances 5506 35.02 6387 39.91OtherAssetsincludingaccruedinterest 446 2.84 364 2.27Total 15722 16002

H.NoneofthefinancialassetsofSCIhavebeenconsideredinthefairvalueofplanassets.I. Theexpectedrateofreturnonplanassetshasbeenestimatedonthebasisofactualreturnsofthetrustinthepastyears.Thesecuritiesoftrusthaveaneffectonthefairvalueofplanassetsasthevalueofthesecuritiesvarywiththechangesinthemarketinterestrates.

J. ActualReturnonplanassets`1176lakh.(Prev.period`1456lakhs)K. Principalactuarialassumptionsatthebalancesheetdate:


For the period ended on 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15Discountrateattheendoftheperiod 7.46% 7.95% 7.46% 7.95% 7.46% 7.95%Expectedreturnonplanassetsattheendoftheperiod

9.00% 9.00% NIL NIL NIL NIL

Futuresalaryincreases 7.50% 7.50% 7.50% 7.50% 0% 7.50%MortalityRate IALM

(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

Medicalcostincrementaltrendrates 8% 8%NormalRetirementAge 60Years 60Years 60Years 60Years 60Years 60Years

L ExperienceAdjustmentforGratuityLiability (` In lakh)

As on 31/03/2011 31/03/2012 31/03/2013 31/03/2014 31/03/2015 31/03/2016Presentvalueofdefinedbenefitobligation

11780 11088 11052 9797 10425 11394

FairvalueofPlanAssets 17424 16419 16081 15600 16003 15722Surplus/(Deficit) 5644 5331 5029 5803 5577 4328ExperienceadjustmentonPlanLiabil-ity(Gain)/Loss

(1158) (659) (121) (304) (191) 945

ExperienceadjustmentonPlanAsset(Loss)/Gain

(136) (246) 124 (46) (380) (198)

MContributionexpectedtobepaidinthenextyear`.NILN Effectofanincreaseofonepercentagepointandtheeffectofadecreaseofonepercentagepointintheassumedmedicalcosttrendrateson:(i) theaggregateofthecurrentservicecostandinterestcostcomponentsofnetperiodicpost-employmentmedicalcosts;and(ii)theaccumulatedpost-employmentbenefitobligationformedicalcosts.

(` In lakhs)

Particulars Post Retirement Medical Benefit SchemeAggregate of the current service cost

and interest costAccumulated post-employment benefit

obligation for medical costs2015-16 2014-15 2015-16 2014-15

Effectofonepercentageup 164 40 2395 2183Effectofonepercentagedown 156 40 2064 1894

O Theestimatesoffuturesalaryincreases,consideredintheactuarialvaluation,takesintoaccountinflation,seniority,promotionandotherrelevantfactorssuchassupplyanddemandwiththeemploymentmarket.


100

P TheCompany’sProvidentFundisexemptedundersection17ofEmployees’ProvidentFundandMiscellaneousProvisionsAct,1952.Conditionsforgrantofexemptionstipulatethattheemployershallmakegooddeficiency,ifany,intheinterestratedeclaredbythetrustvis-a-visstatutoryrate.

NOTE – “36” Activities in Foreign Currency

Year Ended31st March 2016

(` in lakhs)

Year Ended31st March 2015

(` in lakhs)

a) Expenditure in Foreign currencyProfessionalandConsultancyFees 27 25InterestExpenses 17024 15612HireofcharteredSteamers 43167 42560HeavyOilConsumption 52025 100173StevedoringExpensesLaden 19851 17314Wages,BonusandOtherExpensesonfloatingstaff 355 187MarineLightandcanaldues 19746 22440RepairsAndMaintenance,SurveyExpenses 20840 12321

TOTAL 173035 210632b) Earnings in foreign currency Charterhireincome 55325 57521Freight 84632 95686InterestIncome 2589 2880

TOTAL 142546 156087c) Amount remitted during the year in foreign currencies on account of

dividend- -

d) Value of Imports calculated on C.I.F. basisRawmaterials NA NAComponentsandSpareparts 12123 11207CapitalGoods 44048 -

NOTE – “37” Percentage of Imported and indigenous Raw Materials, Stores & Spares to the total consumption (` in lakhs)

Particulars % (2015-16) % (2014-15) 2015-16 2014-15

RawMaterial

ImportedGoods NA NA NA NA

IndigenousGoods NA NA NA NA

ComponentandSpareParts

ImportedGoods 66.22% 66.21% 12123 11207

IndigenousGoods 33.78% 33.79% 6185 5719

NOTE – “38”Duringtheyearthecompanyhasadoptedtheusefullifeof25yearsinrespectofTankers&Offshorevesselswhichisdifferentfromtheusefullifeof20yearsspecifiedinpartCofScheduleIItotheCompaniesAct,2013basedonthetechnicalparametersincludingdesignlifeandthepastrecord.Further,thecompanywhilecalculatingthedepreciationfortheyearhasadoptedtheresidualvalueofallthevesselsas5%ofinitialcostofvesselsasagainstRe1/-consideredearlier,keepinginviewtheactualrealisationinthepastandthelimitspecifiedinpart‘C’ofScheduleIItotheCompaniesAct,2013.Consequenttothechange,thedepreciationfortheyearislower&theprofitfortheyearishigherby19878lakhs.

NOTE – “39”Asper therequirementsofSchedule II to theCompaniesAct,2013,wherecostofapartof theasset issignificant to totalcostof theassetandusefullifeofthatpartisdifferentfromtheusefullifeoftheremainingasset,usefullifeofthatsignificantpartshallbedeterminedseparatelyfordepreciationpurpose.



Afterdetailedinternalstudy,thecompanyisoftheviewthatnoneofthecomponentsofthefixedassetsishavingusefullifedifferentfromtheusefullifeoftheremainingassets.Consequently,theascertainmentofcostofthecomponentswhethersignificantornottothetotalcostofassetwasnotrequired.However,theoptionoftreatingdrydockingexpensesasaseparatecomponentisbeingexaminedbythemanagement.

NOTE – “40”ThecarryingamountsofCompany’sassetshavebeenreviewedattheBalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Suchindicationexistsinthecaseoffewvessels.Thereisanimpairmentlossof`13638lakhsprovidedinthestatementofprofitandlossaccountfortheyearwhicharoseoutofcashflowprojectionsbasedonmanagement’sbestestimateofthesetofconditionsthatexistsovertheremainingusefullifeoftheassettakingintoconsiderationthefollowingassumptions:

a. Timecharteryieldistakenfornextfiveyearsbasedonexternalevidencei.e,reportofDrewry,areputedresearchandadvisoryorganisationforthemaritimesector.

b. Fortheremainingeconomiclifeoftheasset,theyearwisegrowthinthetimecharteryieldhasbeenextrapolatedbasedonthehistoricaldataoflast15yearsforthevesselspublishedbyDrewrytakingthegrowthintheyear2003overtheyear2002asthebaseyear.

c. Budgetedstandingchargesandmanagementexpensesoftheyear2016-17areincreasedforeachyearfrom2017-18basedonthemanagement’sbestestimateofthelikelyincreaseinfuture.

NOTE – “41”TheagencyagreementwiththeagentatUAEportswasterminatedw.e.f.21.03.2015.TheCompanyhasinvokedrevolvingbankguaranteeofUSD1.6milliontorecoveroutstandingduesof`1115lakhsfromthesaidagent.However,theagenthasgotinjunctionthroughcourtonencashmentofbankguarantee.Thecompanyhasalreadysubmittedallthedocumentstoitsappointedlawyerstoenablethevacationoftheinjunction.Tilldate,14hearings/adjournmentshavetakenplace.Further,theCompanyisalsosimultaneouslypursuingthematterwiththeagentforreconciliationofaccountsandthebankhasconfirmeditsliabilitytohonourthebankguaranteeoncetheCourtinjunctionislifted.Sincethematterisstillsub-judiceintheCourtofFujairah,noprovisionismadeinthebooksonthisaccountason31.03.2016.

NOTE – “42”TradePayables,TradeReceivables,Loans&AdvancesandDepositsaresubjecttoconfirmationandreconciliation.Duringtheyear,lettersforconfirmationofbalanceshavebeensenttovarioustradepayableandtradereceivablepartiesbytheCompanyandthesameareunderreconciliationwhereverreplieshavebeenreceived.Themanagement,however,doesnotexpectanymaterialchangesonreconciliation.

NOTE – “43”Thecompanyhasmadeaprovisionof`900lakhsforselfleaseofstaffsandofficersfrom01/04/2011to31/03/2015onestimatedbasis,pendingfinalworkingandalsotherequirementtoenterintoindividualagreementsbetweenthecompanyandeachoftheeligibleemployeeswithretrospectiveeffect.

NOTE – “44”CompanyhadreceivedaclaimofUSD39millionsinrespectofexplosionofcargocarriedonM.V.Amsterdambridge.OutofUSD39millions,USD18millionsiscoveredunderinsurance.InrespectofremainingUSD21millions,companyhasissuedsecuritybeinguncoveredportionofclaim.Companyhasagreedforthemediationtosettletheclaimandmanagementexpectssettlementofclaimwithininsurancecover.Pendingsettlement,theuncoveredclaimhasbeenshownascontingentliability.

NOTE – “45”Thefiguresof previous year havebeen regroupedor rearrangedwherever necessary to conform to current year’s presentation asperScheduleIIItotheCompaniesAct,2013.

NOTE – “46”Thefiguresareroundedofftothenearestlakhrupees.


102

1. (a) ACCOUNTING CONVENTIONThe financial statements are prepared to comply in allmaterialaspectsunderthehistoricalcostconventionandinaccordancewithgenerallyacceptedaccountingprinciplesinIndia and themandatory Accounting Standards prescribedunderSection133of theCompaniesAct2013(‘Act’) readwithRule-7oftheCompanies(Accounts)Rules,2014,theprovisionsoftheActandcurrentpracticesprevailingwithintheShippingIndustriesinIndia.

(b) USE OF ESTIMATES The preparation of financial statements requires estimatesandassumptionsthataffect thereportedamountofassetsand liabilities,anddisclosureofcontingent liabilitiesat thatdateofthefinancialstatementsandtheresultofoperationsduring the reporting period. Although such estimates andassumptions are made on reasonable and prudent basistaking into account all available information, actual resultscoulddifferfromtheseestimatesandassumptionsandsuchdifferencesarerecognisedintheperiodinwhichresultsarecrystallised.

2. FIXED ASSETS a) Tangible AssetsFixedAssetsarestatedathistoricalcostnetofrecoverabletaxes less accumulated depreciation. Cost includesacquisitioncostanddirectlyattributablecostofbringingtheassets to itsworking condition for its intended use and incaseofvessels,acquisitioncostanddirectlyattributablecosttillcompletionofmaidenvoyage.

b) Intangible AssetsIntangible Assets are stated at cost of acquisition net ofrecoverable taxes lessaccumulatedamortisation.Thecostcomprises purchase price, borrowing costs and directlyattributablecostsofbringingtheassettoitsworkingconditionfortheintendeduse.

3. DEPRECIATION/ AMORTISATIONa) Depreciationonalltangibleassetsischargedon“StraightLineMethod”lessresidualvalueof5%asmentionedinScheduleIItotheCompaniesAct,2013.Residualvalueisthe5%oforiginalcost of the asset. However, in case of Tankers & OffshoreVessels, the company has adopted a useful life of 25 yearsbasedonthetechnicalparametersincludingdesignlifeandthepast record. Second hand vessels are depreciated over theirremainingusefullivesasdeterminedbytechnicalevaluationnotexceeding25yearsfromthedateoforiginalbuild.

b) Intangible assets including software is amortised over theusefullifenotexceedingfiveyears.

c) Assets costing individually Rs. 5000/- and below are fullydepreciatedintheyearofaddition.

d) Leaseholdlandisamortisedovertheperiodoflease.4. IMPAIRMENTThe carrying amounts of the Company’s assets are reviewedat eachBalanceSheet date todeterminewhether there is anyindication of impairment. If any such indication exists, theasset’srecoverableamountsareestimatedinordertodetermine

the extent of impairment loss, if any. An impairment loss isrecognisedwheneverthecarryingamountofanassetexceedsits recoverable amount. Recoverable amount is higher of anasset’snetsellingpriceanditsvalueinuse.Valueinuseisthepresentvalueofestimated futurecashflowsexpected toarisefromthecontinuinguseofanassetandfromitsdisposalattheendofitsusefullife.Forthepurposeofcomputingvalueinuseofbulkcarrier&tankervessels,therevenuesforthenext5yearshavebeenprojectedbasedonexternalevidencei.e,reportgivenbyDrewerywhichisareputedresearchandadvisoryorganisationforthemaritimesector. For the remaininguseful lifeof theasset, the revenueshavebeenextrapolatedbasedonthehistoricdataoflast15yearsfor similar vessels published by Drewery and represents themanagement’sbestestimateofthesetofeconomicconditionsthatwillexistovertheremainingusefullifeoftheasset.Incaseofcontainervessels,therevenueprojectionsforthenext2yearsarebasedonactual freightearned in thecurrentyear.Therevenueprojectionsforremainingusefullifeofthevesselarebasedonanaverageincreaseinfreightignoringabnormalfreightincreasesorsteepdeclines.In case of AHTSV’s & PSV’s, Revenue per day had beenconsidered based on current charter party contracts for thecharterperiod.Therevenues thereafterarebasedonanormalrateofincreaseevery3-10yearsdependingonthetype&sizeofthevessel.The impairment loss, if any, is recognised in theStatementofProfitandLoss in theperiod inwhich impairment takesplace.Wherean impairment losssubsequentlyreverses, thecarryingamountof theasset is increased to the revisedestimateof itsrecoverableamount,howeversubjecttotheincreasedcarryingamount not exceeding the carrying amount that would havebeen determined (net of amortisation or depreciation) had noimpairmentlossbeenrecognisedfortheassetinprioraccountingperiods.

5. RETIREMENT AND DISPOSAL OF ASSETS a) AssetswhichhavebeenretiredfromoperationsforeventualdisposalareexhibitedseparatelyintheNoteNo.10-TangibleAssetsunderthehead“Assetsheldfordisposal”.

b) Anticipated loss, if any, in the disposal of such assets isprovided in the accounts for the year inwhich these havebeenretiredfromactiveuse.Forthepurposeofdeterminingtheloss,thesalepriceisrecognised, ifcontractforsaleisconcluded.Inothercases,assessmentoftherealisablevalueis made on the basis of the prevailing market conditions.Losses on such assets are provided for after taking intoaccount the expenses such as customs duty, sales tax /valueaddedtax,etc.inconnectionwiththedisposal,aswellasestimatedexpensesinmaintainingtheasset,till itssale.Wherever the exact amount under each item of expensesisnotknown,anassessment isdoneon thebestestimatebasis.

c) Profits on sale of assets are accounted for only uponcompletionofsalethereof.

SIGNIFICANT ACCOUNTING POLICIES


6. MAJOR REPAIRS AND RENEWALS OF SHIPDry-dockexpenditureisrecognisedintheStatementofProfitandLosstotheextentofpercentagecompletion,basedontechnicalassessment.

7. BORROWING COSTSBorrowingcostsattributabletotheacquisitionorconstructionofaqualifyingassetarecapitalizedaspartofthecostofthatasset.Otherborrowingcostsarerecognizedasexpenseintheperiodinwhichtheseareincurred.

8. INVENTORIESa) Inventories are valued at cost as determined on ‘MovingAveragePrice’methodornetrealisablevalue,whichever islower,unlessotherwisestated.

b) Fueloilpurchasesareinitiallybookedasstock.Thevalueofyear-endstock isarrivedatafterchargingconsumptionon‘movingaverageprice”method.

c) Store/Sparesincludingpaints,etc.arechargedtorevenueasconsumedwhendeliveredtoships.

9. ACCOUNTING OF FOREIGN CURRENCY TRANSACTIONSa) AllforeigncurrencytransactionsforeachmontharerecordedattheclosingexchangerateofthesecondlastFridayoftheprecedingmonthpublishedonxe.comwebsite.

b) The foreign currency balances other than in US Dollarsappearing in the books of account at the period end aretranslatedintoUSDollarsattheclosingexchangerateofthesecondlastFridayofprecedingmonthpublishedonxe.comwebsite. Thereafter, the monetary assets and monetaryliabilitiesaswellastheLongTermLoansaretranslatedintorupeesatSBIMeanRateprevailingattheperiodend.

c) Exchange difference arising on repayment of liabilities andconversionof foreigncurrencyclosingbalancespertainingto long term loans for acquiring ships / containers / otherdepreciableassetsandassetunderconstructionisadjustedinthecarryingcostofrespectiveassets.

d) The exchange differences arising on translation of othermonetary assets and liabilities are recognised in theStatementofprofitandloss.

10. RECOGNITION OF REVENUE AND EXPENDITUREa) TheStatementofProfit&Lossreflects,i) The Earnings and Direct Operating Expenses (Voyagerelatedvariablecosts)inrespectofallFinishedVoyagesonaccrualbasis.

ii) StandingCharges(VesselrelatedFixedCosts)forallthevesselsfortheyearonaccrualbasis.

iii) IncomeandExpenditureinrespectofthecustomspenaltyclaims and container demurrage & detention incomewhichareaccountedforonpayment/realisation.

iv) Inrespectofslotsharingagreementwithothershippinglines, the earnings and expenses are accounted for onaccrualbasisbasedoncompletedvoyagecycleduringtheyear.

v) In respect of time charter arrangements, income andexpensesarebookedonaccrualbasis.

vi) VesselDemurrageincomedueaspercontractualtermsisrecognisedafterdeductiononestimatedbasis,basedonpastexperienceofsettlements.

b) The criteria followed for the purpose of determining theFinishedVoyagesareasunder:(i) Passenger cum Cargo Vessels: - Disembarkation ofpassengersanddischargeofcargoshouldbecompletedonorbeforethelastdateoftheperiod.

(ii) Cargo Vessels (other than those serviced by Feederor Daughter Vessels): - Discharge of cargo should becompletedonorbeforethelastdateoftheperiod.

(iii)Cargo vessels serviced by Daughter vessels: - Theultimate discharge of cargo by all daughter vesselsshould be completed on or before the last date of theperiod.

(iv)Cargovesselsservicedbyfeedervessels:-Thedischargeof cargo at the transhipment port by themainline andown feeder vessels should be completed on or beforethelastdateoftheperiod.Transhipmentportisthepointofcommencementandcompletionofboththeservices.The completion of the mainline and feeder voyage isdeterminedindependentofeachother.

(v)CellularLinerService:-Oncompletionofroundvoyagec) Unfinished Voyages:Anyvoyage,whichdoesnotfulfiltheabovementionedcriteria,istreatedasanunfinishedvoyage.AmountreceivedonaccountoffreightearningandotherchargesinrespectofsuchvoyagesarecarriedforwardasUnfinishedVoyageEarnings.Directoperatingexpensesincurredforsuchvoyagesincludinghireandfreightforvesselschartered-inarecarried forwardasUnfinishedVoyageExpensesexceptincaseoftimecharter.

d) Allocation of Container Expenses:Expenses relating to container activities such as stevedoring,stuffing and destuffing, transportation, etc. are identified withtherelevantvoyageandclassifiedasdirectoperatingexpenses.Expenses such as container hire, kobi charges, ground rentand handling of empty containers, etc.,which are not directlyidentifiablewithanyparticularvoyageareallocatedtoallvoyagesonthebasisofunitdaysforeachvoyage.Thesumsoallocatedtounfinishedvoyages iscarriedforwardasUnfinishedVoyageExpenses.

11. EMPLOYEE BENEFITSa) All short- term employee benefits are recognized at theirundiscountedamountintheaccountingperiodinwhichtheyareincurred.

b) Employeebenefitsunderdefinedcontributionplanscomprisingofpost- retirementmedical benefits (w.e.f 01.01.2007) andpensioncontribution are recognized based on the undiscounted amountof obligations of the company to contribute to the plan. Thecontributiontofundinthenatureofdefinedcontributionisadefinedbenefitplandue to the requirementof theemployermakinggooddeficiency,ifany,intheinterestrateearnedvis-a-visstatutoryrate.Thiscontributionisrecognisedbasedonitsundiscountedamountandpaidtoafundadministeredthroughaseparatetrust.


104

c) Employee benefits under defined benefit plans comprising ofgratuity,leaveencashmentandpost-retirementmedicalbenefitsare recognized based on the present value of defined benefitobligation,whichiscomputedonthebasisofactuarialvaluation.ActuarialLiabilityinexcessoffairvalueofrespectiveplanassetsis recognized during the year. Actuarial gains and losses arerecognizedintheStatementofProfit&Lossduringtheperiodinwhichtheyoccur.

12. ADJUSTMENTS PERTAINING TO EARLIER YEARSIncome/ExpenditurerelatingtopriorperiodwhichdonotexceedRs.5lakhsineachcase,aretreatedasincome/expenditureofcurrentyear.

13. INSURANCE, P&I AND OTHER CLAIMSa) Provision in respect of claims against the Company andcoveredbyHullandP&Iinsuranceismadeasunder:-i) InrespectofcollisionclaimsandP&Iclaims(otherthancargoclaims),totheextentofdeductiblelimitbasedontheassessmentprovidedbythesurveyors.

ii) IncaseofCargoclaims,onthebasisoftheactualclaimsregistered and/or paid pertaining to the relevant year’svoyagesasascertainedattheperiodendasreducedbytheamountsrecoverablefromtheinsurers.

iii) Expenses on account of general average claims/damagestoshipsarechargedoffintheperiodinwhichthey are incurred. Claims against the underwriters areaccountedonsubmissionoftheAdjuster’sreporttotheunderwriters.

b) Claims made by the Company against other parties notcovered under insurance including ship repair yards,ship-owners, ship charterers, customs and others, etc.are accounted for on realisation, due to uncertainty in theamountsoftheirultimaterecovery.

14. INVESTMENTSa) Long Term Investments are stated at cost. Provision fordiminution is made to recognize a decline, other thantemporary,inthevalueofsuchinvestments.

b) CurrentInvestmentsarestatedatlowerofcostandfairvalue.15. TAXES ON INCOMEProvision for income tax liability is made as per special

provisionsrelating to incomeofshippingcompaniesunder theIncomeTaxAct,1961onthebasisofdeemedtonnageincomeof the Company. Provision for incometax on non- shippingincome ismade asper the provisionsof the Income-TaxAct1961. Minimum alternate tax (MAT) paid in accordancewiththetaxlawsinpreviousyearshasbeenrecognisedasanassetand adjusted against provision for income tax liability as andwhenthereisareasonablecertaintywhichgiverisetofutureeconomicbenefitsintheformoftaxcreditagainstfutureincometaxliability.

16. EARNINGS PER SHAREBasicandDilutedearningspershare iscomputedbydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.

17. LEASESIn respect of assets acquired on lease prior to 1st April 2001, leaserentalsareaccountedonaccrualbasisovertheperiodoftheleaseandinrespectofassetsacquiredonorafter1stApril2001,leaserentals are accounted in accordance with AS-19 “Accounting forLeases”.

18. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSProvisions involving substantial degree of estimation inmeasurementarerecognizedwhenthereisapresentobligationasaresultofpasteventsanditisprobablethattherewillbeanoutflowofresourcesembodyingeconomicbenefits.Contingent liability is a possible obligation arising from pasteventsandtheexistenceofwhichwillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontrolofthecompanyorapresentobligation that arises from past events but is not recognizedbecauseitisnotpossiblethatanoutflowofresourcesembodyingeconomic benefit will be required to settle the obligations orreliableestimateoftheamountoftheobligationscannotbemade.Thecompanydisclosestheexistenceofcontingentliabilitiesinfinancialstatements.Contingent Assets are neither recognized nor disclosed in thefinancialstatements.



INDEPENDENT AUDITORS’ REPORTTo The Members of THE SHIPPING CORPORATION OF INDIA LIMITED1. Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financialstatements of THE SHIPPING CORPORATION OF INDIA LIMITED, (hereinafter referred as the Venturer company) andits jointly controlled entities (the venturer company and itsjointly controlled entities together referred to as the “Group”),which comprise the Consolidated Balance Sheet as atMarch 31, 2016, the Consolidated Statement of Profit and Loss andtheConsolidatedCashFlowStatementfortheyearthenended,and a summary of significant accounting policies and otherexplanatoryinformation.

2. Management’s Responsibility for the Financial StatementsTheVenturer Company’sBoard ofDirectors is responsible forthepreparationandpresentationoftheseconsolidatedfinancialstatementsintermsoftherequirementsoftheCompaniesAct,2013(theAct) togivea trueandfairviewof theconsolidatedfinancial position, consolidated financial performance andconsolidated cash flows of the Group in accordancewith theaccountingprinciplesgenerallyaccepted in India, includingtheAccounting Standards specified under section 133 of the Act,read with Rule 7 of the Companies (Accounts) Rules, 2014.The respective Board of Directors of the Companies includedin the Group are responsible for maintenance of adequateaccounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and forpreventinganddetectingfraudsandotherirregularities;selectionand application of appropriate accounting policies; makingjudgmentsandestimatesthatarereasonableandprudent;anddesign, implementation and maintenance of adequate internalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessofaccounting records, relevant tothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whether due to fraud or error, which have been used for thepurposeoftheConsolidatedfinancialstatementsbytheBoardofDirectorsoftheventurercompany,asaforesaid.

3. Auditors’ ResponsibilityOurresponsibilityistoexpressanopinionontheseconsolidatedfinancial statements based on our audit. We have taken intoaccount theprovisionsof theAct, theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.WehaveconductedourauditinaccordancewiththeStandardsonAuditingspecifiedundersection143(10)of theAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhether the consolidated financial statements are free frommaterialmisstatement.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedfinancialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatementoftheconsolidatedfinancialstatements,whetherdue to fraud or error. In making those risk assessments, the

auditor considers internal financial control relevant to theCompany’spreparationoftheconsolidatedfinancialstatementsthatgiveatrueandfairview,inordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthe reasonableness of the accounting estimates made by theVenturer Company’s Board of Directors, aswell as evaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriate toprovideabasisforourauditopinionontheconsolidatedfinancialstatements.

4. Basis for Qualified Opiniona. The direct access of overseas foreign agents to fund

collected on account of freight and other charges without adequate security and regular monitoring mechanism is prone to risk of non /short-payment, the consequential effect of which on the statement of profit and loss remains unascertainable.

b. One of the vessels acquired in the year 2012-13 was under capitalised by 3.50 million USD and the provision for interest @ 2.5% pa on this amount has not been made in the accounts from the year 2012-13. This has resulted in understatement of fixed assets by `20.28 crores, overstatement of profits by `4.98 crores and understatement of liability of `25.25 Cr.

5. OpinionInouropinionandtothebestofourinformationandaccordingto the explanations given to us,except for the effects of the matter described in the ‘Basis for Qualified Opinion’ paragraph above, theconsolidatedfinancialstatementswhichincludetheresultsofjointlycontrolledentitiesnamelyIndiaLNGTransportCompany (No. 1) Ltd.; India LNGTransportCompany (No. 2)Ltd.;IndiaLNGTransportCompany(No.3)Ltd.andIndiaLNGTransportCompany(No.4)Ltd.givetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheGroupasat31March2016,itsconsolidatedprofitanditsconsolidatedcashflowsfortheyearendedonthatdate.

6. Emphasis of MatterWe draw attention of the management to the followingobservationswithoutqualifyingouropinion:a) The adjustments required in the accounts not likely to bematerialintheopinionofmanagementonconfirmationandreconciliationofoutstandings in respectof tradepayables,tradereceivablesandloans&advances(ReferNoteNo.45tothefinancialstatements).

b) Thefinancial statementsof these Jointly controlledentitiesusedintheconsolidationhavebeendrawnupforthecalendaryear ended 31st December 2015 which is different thantheVenturerCompanywhosefinancialyearendedon31stMarch2016.Adjustmentshavebeenmadefortheeffectofthesignificanttransactionorothereventsthathaveoccurredbetweenthesetworeportingdates.(ReferNoteNo.31)

c) The financial statements of Irano Hind Shipping CompanyLtd.havenotbeenconsidered in theconsolidatedfinancialstatementsduetotheentityoperatingunderseverelongtermrestrictionsthatsignificantlyimpairitsabilitytotransferfunds

106

totheventurercompany,asconfirmedbythemanagement.(ReferNote.No.32).

7. Other Matters Wedidnotauditthefinancialstatements/financialinformationof four jointly controlled entities whose financial statements /financial informationreflect totalassetsof`99460LacsasatDecember31,2015,totalrevenueof`12973Lacsandnetcashflowsamountingto`200Lacsfortheyearendedonthatdate,as considered in the Consolidated financial statements. Thesefinancial statements / financial information have been auditedbyotherauditorswhose reportshavebeen furnished tousbytheManagementandouropinionontheConsolidatedfinancialstatementsinsofarasitrelatestotheamountsanddisclosuresincluded in respect of these jointly controlled entities and ourreport intermsofsub-sections(3)and(11)ofsection143oftheAct, insofarasitrelatestotheaforesaidjointlycontrolledentitiesisbasedsolelyonthereportsoftheotherauditorsOur opinionon theConsolidated Financial Statements andourreportonOtherLegalandRegulatoryRequirementsbelowarenotmodifiedinrespectoftheabovematterwithrespecttoourrelianceontheworkdoneandthereportsoftheotherauditors.

8. Report on Other Legal and Regulatory Requirements:a. The reporting requirements as required by the Companies(Auditor’sReport)Order,2016(“theOrder”) issuedby theCentral Government of India in terms of sub-section (11)of section 143 of the Act are not applicablewhile issuingthe Auditors’ Report in respect of Consolidated FinancialStatements.

Asrequiredundersubsection(5)ofSection143oftheAct,incaseofventurercompanybeingaGovernmentcompanyandtheotherjointlycontrolledentitieswhosefinancialstatementshave been consolidated not being Government companiesundertheAct,wegiveintheAnnexure–Iastatementonthemattersspecifiedinthedirectionsandsub-directionsissuedbyOfficeoftheComptrollerandAuditorGeneralofIndiawithrespecttotheVenturerCompanyonly.

b. Asrequiredbysection143(3)oftheAct,basedonourauditandontheconsiderationofthereportoftheotherauditorsontheseparatefinancialstatementsofthejointlycontrolledentities,wereportthat:i. We have sought and obtained all the information andexplanations which to the best of our knowledge andbeliefwerenecessaryforthepurposeofourauditoftheconsolidatedfinancialstatements;

ii. Except for the effects of the matter described in the “Basis for Qualified Opinion” paragraph above, In ouropinion, proper books of account as required by lawrelating to the preparation of Consolidated FinancialStatementshavebeenkeptbytheGroupsofarasappears

fromourexaminationofthosebooksandthereportsoftheotherauditors;

iii. TheconsolidatedBalanceSheet,consolidatedStatementofProfitandLossandconsolidatedCashFlowStatementdealtwithbythisReportareinagreementwithrelevantbooks of account maintained for the purpose ofconsolidatedfinancialstatements;

iv. In our opinion, the aforesaid consolidated financialstatements comply with the accounting standardsspecifiedundersection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014;

v. Thematterdescribedinthe“BasisforQualifiedOpinion”paragraphabove, inouropinion,mayhaveanadverseeffectonthefunctioningoftheGroup;

vi. OnthebasisofwrittenrepresentationsreceivedfromthedirectorsofventurercompanyasonMarch31,2016andtakenonrecordbyitsBoardofDirectorsandthereportsof theauditorsof jointlycontrolledentities,noneof thedirectors is disqualified as on March 31, 2016, frombeingappointedasadirectorintermsofsection164(2)oftheAct;

vii.With respect to the adequacy of the internal financialcontrolsoverfinancialreportingoftheventurercompanyandtheoperatingeffectivenessofsuchcontrolinventurercompany, refer to our separate report in Annexure-II.Ourcommenton theadequacyof the InternalFinancialControloverFinancialReportingisnotapplicablefortheJointly Controlled Entities whose financial statementshavebeenconsolidatedsince thesearenotcompaniesundertheAct.

c. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(Auditand Auditors) rules, 2014, in our opinion and to the bestofour informationandaccording to theexplanationsgivento us and based on the consideration of the report of theotherauditorsontheseparatefinancialstatementsofjointlycontrolledentities:i) TheGrouphasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninNote–33totheConsolidatedFinancialStatements.

ii) TheGroupdoesnotanticipateanymaterial foreseeablelosses on long – term contracts including derivativecontracts.

iii) Therehasbeennodelayintransferringamounts,requiredtobetransferred,totheInvestorEducationandProtectionFund (IEPF) by the Company in respect of VenturerCompany.IEPFisnotapplicabletothejointlycontrolledentities.

For MKPS & AssociatesCharteredAccountantsFirm’sRegn.No.302014ECA Nikhil Kumar AgrawallaPartnerM.No.157955Mumbai27thJuly,2016

For GMJ & Co.CharteredAccountantsFirm’sRegn.No.103429WCA Sanjeev MaheswariPartnerM.No.038755Mumbai27thJuly,2016

INDEPENDENT AUDITORS’ REPORT


ANNEXTURES TO THE INDEPENDENT AUDITORS’ REPORTANNEXTURE-ITO THE INDEPENDENT AUDITORS’ REPORTDirections under Section 143(5) of the Companies Act, 2013On the Accounts of The Shipping Corporation of India Ltd. for the year 2015-16

SI. No.



1 Whether the Company has clear title /leasedeeds for freeholdand leasehold landrespectively?Ifnotpleasestatetheareaoffreeholdand leasehold land forwhich title /leasedeedsarenotavailable.

As per information given to us, the corporation has clear title/leasedeedsforfreeholdandleaseholdland.Asexplained,theonlyleaseholdlandisthelandonwhichtheShippinghouseofMumbaihasbeenconstructed.

NoImpact

2 Whetherthereareanycasesofwaiver/writeoffdebts / loans / interest,etc? Ifyes, thereasonsthereforeandamountinvolved.

TherehasbeenwriteoffinrespectoftradereceivablesamountingtoRs.2,251,562.71duringtheyearasdetailedbelow:

Name of the party Amount of write off

Reasons for write off

SinostarDsthapa 2,112,689.37 Thepartyisdissolvedduringtheyear,hencetheamountiswritten

off.

AshaAgencies 66,631.88 Thegoodswereabandonedandsamewereauctioned.

CenturionMarine 24,640.00 VATnotrecoverable

LinerMiscCustomer 47,601.46 Thegoodswereabandonedandsamewereauctioned.

Notmaterial

3 Whether proper records are maintainedfor inventories lying with third parties andassets received as gift / grant(s) from theGovernmentorotherauthorities?

Asexplainedtous,therearenoinventorieslyingwiththirdparties.Further,thereisnogiftreceivedfromGovt.orotherauthorities.

NoImpact

Sub-directions under Section 143(5) of the Companies Act, 2013 in respect of the Shipping Corporation of India Limited for the year 2015-16

SI. No.



1 State the area of land under encroachmentand briefly explain the steps taken by theCompanytoremoveencroachments.

Asexplainedtous,thereisnolandunderencroachment NoImpact

2 (i) Whether amount of (a) bank balance(b) trade receivable (c) trade payables (d)loans and advances for which third partyconfirmation was not made available hasbeenreported.

Thecorporationhassentlettersforbalanceconfirmationofbankbalances, trade receivables and trade payables. However, noconfirmationhasbeensentforloans&advances.Thethirdpartyconfirmationreceivedbyushasbeen175outoftotalnumberofconfirmationbeing2010senttotheparties.



108

SI. No.



(ii)Wheresuchbalancehasbeenconfirmedby respective parties, whether it varieswidely from the amounts reflected underrespectiveheadsinthefinancialstatements?Ifso, thedifferenceandaction takenby themanagement to reconcile the differenceshouldbedisclosed.

The balance confirmation received wherever varying with theamountasperthebooksofaccountbymorethanRs.5lakhs(approx)isshowninAnnexure–‘1’.Asexplained,thenecessarysteps shall be taken by the management to reconcile thedifference.



3 Independent verification may be made, ofinformation / inputs furnished to actuary,viz. number of employees, average salary,retirementage,etc.andassumptionsmadebytheactuaryregardingthediscountrate,futurecostincrease,mortalityrate,etc.forarrivingat the provision for liability of retirementbenefits, viz. gratuity, leave encashment,post-retirementmedicalbenefits,etc.

Theinformation/inputsfurnishedbythecompanytotheactuaryforvaluationof theprovision for liabilityof retirementbenefits,i.e. number of employees, average salary, retirement age etchavebeenreviewedand thesamearebasedonactual for thecurrentyear.Theassumptionmadebytheactuaryforvaluationoftheliabilityofretirementbenefitsi.e.,discountrate,moralityrate, future cost increase are consistent over the period. Theactuaryhasconfirmedinitsreportthattheliabilityofretirementbenefits has been valued as per the provisions of AccountingStandard-15.

NoImpact



ANNEXTURES TO THE INDEPENDENT AUDITORS’ REPORT


ANNEXURE – II TO THE INDEPENDENT AUDITORS’ REPORTReferred to in Paragraph 8(b) (vii) of our Independent Auditors’ Report to the members of the company on the financial statements for the year ended 31st March, 2016Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act.1. We have audited the internal financial controls over financialreportingof THE SHIPPING CORPORATION OF INDIA LIMITED(“theCompany”)asofMarch31,2016inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls2. The Company’s management is responsible for establishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontrol over financial reporting criteria established by theCompany considering the essential components of internalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControls over Financial Reporting issued by the Institute ofChartered Accountants of India (ICAI). These responsibilitiesincludethedesign,implementationandmaintenanceofadequateinternal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimely preparation of reliable financial information, as requiredundertheAct.

Auditor’s Responsibility3. Our responsibility is to express an opinion on the Company’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNote on Audit of Internal Financial Controls Over FinancialReporting(the“GuidanceNote”)andtheStandardsonAuditingdeemed tobeprescribedundersection143(10)of theAct tothe extent applicable to an audit of internal financial controls,bothapplicabletoanauditofinternalfinancialcontrolsandbothissued by the ICAI. Those Standards and the Guidance Noterequire thatwecomplywithethical requirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequate internal financial controls over financial reportingwasestablishedandmaintainedand if suchcontrolsoperatedeffectivelyinallmaterialrespects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financial controlssystemoverfinancialreportingandtheiroperatingeffectiveness.Our audit of internal financial controls over financial reportingincludedobtaininganunderstandingofinternalfinancialcontrolsover financial reporting, assessing the risk that a materialweakness exists, and testing and evaluating the design andoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

5. Webelievethattheauditevidencewehaveobtainedissufficientandappropriate toprovideabasisforourauditopinionontheCompany’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls Over Financial Reporting6. ACompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatements for external purposes in accordancewith generallyacceptedaccountingprinciples.Acompany’s internalfinancialcontrol over financial reporting includes those policies andproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurance that transactions are recorded as necessary topermit preparation of financial statements in accordance withgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and (3) provide reasonable assurance regarding prevention ortimelydetectionofunauthorizedacquisition,useordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting7. Becauseoftheinherentlimitationsofinternalfinancialcontrolsover financial reporting, including the possibility of collusionor improper management override of controls, materialmisstatements due to error or fraud may occur and not bedetected. Also, projections of any evaluation of the internalfinancial controls over financial reporting to future periods aresubjecttotheriskthattheinternalfinancialcontroloverfinancialreporting may become inadequate because of changes inconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Qualified Opinion8. According to the information and explanation given to us andbasedonouraudit,thefollowingmaterialweaknesshavebeenidentifiedintheoperatingeffectivenessoftheCompany’sinternalfinancialcontroloverfinancialreportingasat31stMarch,2016.a) Freight&otherchargescollectiondonebycertainoverseasagentsonbehalfoftheCompanyaregettingcreditedtotheirbankaccounts,insteadofthebankaccountofthecompany,whichintheabsenceofadequatesecuritycouldpotentiallyresult in the non/ short receipt of such collections by thecompany in the event of either fraudulent intention of theagent,aswashappenedinthepastoranydisputebyeitherparty.

b) Thetimelyverificationofclaimsofagentsneedstobefurtherstrengthened.

c) Thecontrolonthetimelyreversalofstalechequeneedstobefurtherstrengthened.

d) The control on the booking of bunker consumption to the

ANNEXTURES TO THE INDEPENDENT AUDITORS’ REPORT

110

correctvoyageofthevesselsneedstobestrengthened.e) The control in the system to ensure that the bunkerconsumption incaseof timecharter is recovered fromthecharterinsteadofdebitingtotheconsumptionaccountneedstobefurtherstrengthened.

f) Thesystemhastoensurethatthetaxisdeductedatsourceonalltheprovisionforexpensemade.

Inouropinion,theCompanyhas,inallmaterialrespects,maintainedadequate internal financial controls over financial reporting as ofMarch31,2016basedontheinternalcontroloverfinancialreportingcriteria established by the Company considering the essentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditof Internal Financial Controls Over Financial Reporting issued bythe InstituteofCharteredAccountantsof India andexcept for the possible effects of the material weakness described above on the achievement of objectives of the control criteria, theinternal

financial controls over financial reporting of the company wereoperatingeffectivelyasatMarch31,2016.Wehaveconsideredthematerialweaknessidentifiedandreportedabove in determining the nature, timing and extent of audit testsapplied inourauditof thefinancialstatementsof thecompanyasof31stMarch,2016andthesematerialweaknessdonotaffectouropinionontheStandaloneFinancialStatementsoftheCompany.




Particulars Note No. As at31st March 2016

` In lakhs

As at31st March 2015

` In lakhs

I EQUITY AND LIABILITIES(1) Shareholders' Funds:

(a)Sharecapital 1 46580 46580(b)Reservesandsurplus 2 644256 605336

(2) Non-current liabilities(a)Long-termborrowings 3 524832 614903(b)OtherLong-termliabilities 4 9 41(c)Long-termprovisions 5 14451 13797

(3) Current liabilities(a)Shorttermborrowings 6 - 3857(b)Tradepayables 7 100632 99499(c)Othercurrentliabilities 8 212028 195618(d)Short-termprovisions 9 6763 4257

TOTAL 1549551 1583888

II ASSETS(1) Non-current assets

(a)FixedAssets(i)Tangibleassets 10 1245318 1226766(ii)Intangibleassets 11 58 1209(iii)Capitalwork-in-progress 12 15793 56697

(b)Non-currentinvestments 13 6 -(c)Long-termloansandadvances 14 37472 43358(d)Othernon-currentassets 15 1242 1215

(2) Current assets(a)Currentinvestments 16 3795 7718(b)Inventories 17 8635 9266(c)TradeReceivables 18 71832 79901(d)CashandBankbalances 19 136756 133547(e)Short-termloansandadvances 20 20057 13960(f)Othercurrentassets 21 8587 10251

TOTAL 1549551 1583888





Mumbai, Dated the 27th July, 2016



The Shipping Corporation of India Limited Consolidated Balance Sheet as at 31st March 2016

112

Particulars Note No.

Year ended 31st March 2016

` In lakhs

Year ended 31st March 2015

` In lakhsI. Revenue from operations 22 421387 427394 II. Other Operating Revenue 23 3411 3730 III. Other Income 24 15894 39481 IV. Total Revenue 440692 470606 V Expenses:

CostofServicesRendered 25 236594 281813EmployeesBenefitExpense 26 46623 42217Otherexpenses 27 18277 14263Financecosts 28 21089 23767DepreciationandAmortisationon:a)TangibleAssets 10 78902b)IntangibleAssets 11 1247

61072 80149ImpairmentofAssets 43 13638 -Total expenses 397292 442210

VI. Profit/(loss) before Prior Period, Exceptional and Extraordinary items and tax (IV-V)

43399 28396

VII. Income / (Expenses) pertaining to Prior Period (Net) 29 194 (1371)VIII. Profit (loss) before Exceptional and Extraordinary items and tax

(VI+VII)43593 27025

IX. Exceptional items - -X. Profit before Extraordinary items and tax (VIII-IX) 43593 27025XI Extraordinary items - -XII Profit before tax (X-XI) 43593 27025XIII Tax expense:

Currenttax 7524MatCreditadjusted -

4654 7524XIV Profit/(Loss) for the year (XII-XIII) 38940 19501 XV Earnings per equity share of Face Value of ` 10 each: 37

Basic&Diluted(includingextraordinaryitems) 8.36 4.19Basic&Diluted(excludingextraordinaryitemsnetoftax) 8.36 4.19








The Shipping Corporation of India Limited Consolidated Statement of Profit and Loss for the Year Ended 31st March 2016



2014-15 ` In lakhs

(A) CASH FLOW FROM OPERATING ACTIVITIES

NetprofitbeforeTax,extraordinaryitems&priorperiodadjustments 43400 28396

ADJUSTMENTSFOR:

Depreciation 61072 80149

ImpairmentLossonAssets 13638 -

InterestIncome (11320) (13799)

Interestexpense 21089 23767

DividendReceived (625) (672)

Surplus/LossonsaleofFixedAssets(otherthanships) (1245) (187)

SurplusonSaleofShips - (12055)

Provisionfordoubtfuldebts&Advances(Net) 2533 5221

Debts&Advanceswrittenoff 23 3

Provisionfordimunitioninvalueofinvestment - -

Excessprovisionswrittenback (851) (544)

Incomefromrescindmentofcontracts (1952) (12400)

82362 69482

Operatingprofitbeforeworkingcapitalchanges (i) 125761 97879

Adjustments for : Increase in working capital

(a)Trade&otherreceivables 6790 128993

(b)Inventories 631 9849

(c)Tradepayables 13773 (7901)

21193 130942

Cash generated from operations (ii) 146955 228821

Tax paid (Net of Refunds) (4650) (7715)

Cash flow before prior period adjustments 142305 221105

Prior period adjustments (Net) 194 (1371)

Net Cash From Operating Activities (A) 142499 219734

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase/AcquisitionofFixedAssets(includingAssetsunderconstruction)

(51213) (78374)

SaleofFixedAssets 1250 12472

IncomefromInvestments 3180 3593

InterestReceived 8912 11832

Sale/PurchaseofInvestments 3917 3620

AdvancestoJointVentureCompanies 457 3652

IncomefromRescindmentofcontracts 1952 12400

Netcashusedininvestingactivities (B) (31545) (30805)

The Shipping Corporation of India Limited Consolidated Cash Flow Statement

114


2014-15 ` In lakhs

C) CASH FLOW FROM FINANCING ACTIVITIES

LoansBorrowed/Repaid (86765) (143011)

DividendsPaid(Incl.DividendTax) (7) (5)

InterestCharges (20953) (23681)

StaffWelfareActivities(Net) (15) (48)

CorporateSocialResponsibilityActivities (35) (99)

Paymentofdebtissuecostforsyndicatedloan (626)

Netcashflowfromfinancingactivities (C) (107775) (167470)

Exchangedifferenceontranslationofforeigncurrencycashandcashequivalents

(D)30 (39)

NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C+D) 3209 21421

Cash&CashBankBalancesattheBeginingoftheYear 133547 112127


ClosingCash&BankBalancesincludes:

Cash&Cashequivalents 50945 19200

Otherbankbalances 85811 114347









NOTE “1” - Share Capital

Particulars As at 31st March, 2016

` In lakhs


` In lakhs

A Authorised:

1,00,00,00,000EquitySharesof`10each

(Prev.Yr.1,00,00,00,000EquitySharesof`10each) 100000 100000

B Issued, Subscribed and Paid Up:

46,57,99,010EquitySharesof`10eachfullypaidup

(Prev.Yr.46,57,99,010EquitySharesof`10eachfullypaidup) 46580 46580

TOTAL 46580 46580

C Reconciliation of Equity Shares As at 31st March, 2016 As at 31st March, 2015

No. of shares Amount in ` lakhs No. of shares Amount in ` lakhs

OpeningBalance 465799010 4657990100 465799010 4657990100

Add:BonussharesissuedduringtheYear - - - -

Less:Sharesboughtback - - - -

ClosingBalance 465799010 4657990100 465799010 4657990100

D Details of shareholders holding more than 5% shares

S. No Name of Shareholder

As at 31st March, 2016 As at 31st March, 2015No. of shares held % of Holding No. of shares held % of Holding

1 PresidentofIndia 296942977 63.75 296939920 63.75

2 LifeInsuranceCorporationofIndia 65796899 14.13 65801520 14.13

Rights/Preference/Restriction attached to Equity Shares

TheCompanyhasonlyoneclassofEquityshareshavingparvalueof`10.Eachshareholderofequitysharesisentitledtoonevotepershare.IntheeventofliquidationoftheCompany,theholderofequityshareswillbeentitledtoreceivetheremainingassetsofthecompanyafterdistributionofallpreferentialallotmentinproportiontotheirshareholding.ThedividendwheneverproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.TheCompanydoesnothaveanyholdingcompany.

Therearenosharesreservedforissueunderoptionandcontract/commitmentforthesaleofshares/disinvestment.

FortheperiodoffiveyearsimmediatelyprecedingthedateasatwhichtheBalanceSheetisprepared,noshareshavebeenissuedforconsiderationotherthancash,noshareshavebeenissuedasbonusshares&noshareshavebeenboughtback

NOTE “2” - Reserves & Surplus


` In lakhs


` In lakhs1 Capital Reserve AsperlastBalancesheet 14298 14298Add:TransferfromAppropriation - -

14298 142982 Securities Premium Reserve AsperlastBalancesheet 52177 52177Less:ShareIssueExpenses - -

52177 521773 General Reserve AsperlastBalancesheet 403982 403982Add:TransferfromP&LAppropriation - -Add:TransferfromTonnageTaxReserve(Utilised) 138900

542882 403982

NOTES ON CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016

116


` In lakhs


` In lakhs4 Tonnage Tax ReserveAsperlastBalancesheet 50 -Add:TransferfromP&LAppropriation A 9000 50

9050 505 Tonnage Tax Reserve (Utilised) BAsperlastBalancesheet 138900 138900Add:TransferfromTonnageTaxreserve 0 -Less:TransfertoGeneralReserve 138900 -

- 1389006 Corporate Social Responsibility Reserve CAsperlastBalancesheet 704 803Add:TransferfromP&LAppropriation 0 -Less:Amountutilised 35 99

669 7047 Sfaff Welfare Fund DAsperlastBalancesheet 141 88Add:TransferfromAppropriation/P&L 140 117Add:InterestEarned 11 14Less:Amountutilised 26 78

266 1418 Foreign currency translation reserveAsperlastBalancesheet 8 -Add:Additionduringtheyear 30 8

38 89 Balance in Statement of Profit and Loss BalanceBroughtforwardfromLastYear (4923) (23706)Add:Profit/(Loss)fortheYear 38940 19501Less:APPROPRIATION:DepreciationAdjustment 0 568TonnageTaxReserve 9000 50StaffWelfareFund 140 101Balancecarriedforward 24876 (4923)

TOTAL 644256 605336 Notes:A Tonnage Tax Reserve Thisreserveisastatutoryreserveasperrequirementofsection115VToftheIncomeTaxAct,1961forthepurposeofcomplyingwiththeconditionsforapplicabilityoftonnagetaxscheme

B Tonnage Tax Reserve (Utilised)Tonnage tax reservebeingStatutoryReserve,asper requirementofsection115VTof the IncometaxAct,1961whichhasbeenutilisedbutawaitingtransfertoGeneralReserve

C Corporate Social Responsibility ReserveReservecreatedasperthecorporatesocialresponsibiltypolicyofthecompany.Itiscreatedforcontributiontobettermentofsocietyandenvironment

D Staff Welfare FundThisisafundcreatedforthewelfareactivitiesoftheemployees

E Foreign currency translation reserveThisreserveiscreatedoutofconsolidationofforeignjointventures.


NOTE - “3” - Long-Term Borrowings

ParticularsAs at 31st March, 2016 As at 31st March, 2015

Non-Current Current* Non-Current Current*` In lakhs ` In lakhs ` In lakhs ` In lakhs

Secured Term LoansFrom BanksInINR A 843 1729 2575 1729InForeigncurrency B 523989 128255 612328 121093TOTAL C 524832 129984 614903 122821

A)SecuredbyFleethavingNetblockof`11311lakhs(Prev.Yr.`11867lakhs)B)SecuredbyFleethavingNetblockof`1065439lakhs(Prev.Yr.` 1080248lakhs)

NOTE - “4” - Other Long term Liabilities

ParticularsAs at



` In lakhs

SecurityDeposits 9 41TOTAL 9 41

NOTE - “5” - Long term Provisions

ParticularsAs at



` In lakhs

Provision for employee benefit1 LeaveEncashment 4534 43722 PostRetirementMedicalScheme* 4254 37843 Pension 5663 5641

TOTAL 14451 13797

Long term provision As at 31st March 2015

Provided during the year

Utilised during the year

Amount reversed As at 31st March 2016

LeaveEncashmentLiability 4372 162 - - 4534PostRetirementMedicalScheme* 3784 470 - - 4254Pension 5641 22 - - 5663

13797 654 - - 14451

*Thisincludes`2171lakhs(Prev.yr.`1880lakhs)beingprovisionmadefornewPostRetirementMedicalScheme(w.e.f01.01.2007)whichisaDefinedContributionPlan.

NOTE - “6” - Short-Term Borrowings

ParticularsAs at



` In lakhsSecuredLoans*-fromBanksrepayableondemand - 3500

UnsecuredLoans - -fromOthers 357

TOTAL 0 3857

*Securedagainsttermdepositwiththebank.

NOTES ON CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

118

NOTE “7” - Trade Payables

ParticularsAs at



` In lakhsTrade Payablesi)DuesofMicro&SmallEnterprises 515 547ii)Others 100117 98952

TOTAL 100632 99499

Disclosures under Micro, Small & Medium Enterprises Development Act, 2006 (the Act)Principal amount remainingunpaid to suppliers at the endoftheperiod

515 547

Interestaccruedandduetosuppliersontheaboveamount Nil NilPayment made to suppliers (other than interest) beyond theappointedday,duringtheperiod

Nil Nil

InterestpaidtosuppliersundertheAct,(OtherthanSection16) Nil NilInterestpaidtosuppliersundertheAct,(Section16) Nil NilInterest due and payable to suppliers under the Act, forpaymentsalreadymade

Nil Nil

Interestaccruedandremainingunpaidattheyearend. Nil NilTheinformationhasbeengiveninrespectofsuchvendorstotheextenttheycouldbeidentifiedasMicro&SmallenterprisesonthebasisofinformationavailablewiththeCompany.

NOTE - “8” - Other current Liabilities

ParticularsAs at



` In lakhs1 Currentmaturitiesoflong-termdebt 162907 1551862 Interestaccruedbutnotdueonborrowings 3071 29323 Incomereceivedinadvance-UnfinishedVoyages 2215 4266

4 UnpaidDividend 46 53

5 AdvancesandDeposits 10859 3737

6 SecurityDeposits 960 884

7 SubsidyforPassengerservice(Myanmmar) 99 159

8 OtherLiabilities

-Employeerelated 11178 9018

-StatutoryLiabilities 967 883

-PayabletoRelatedParties 18356 16178

-Others 1370 2321

31871 28400

TOTAL 212028 195618

NOTE - “9” - Short term Provisions

ParticularsAs at



` In lakhsProvision for Employee Benefits

1 EmployeeBenefits-LeaveEncashment 476 685



ParticularsAs at



` In lakhs-PostRetirementMedicalScheme 133 126

609 811

2 Others

-ForeignTaxation 1440 1440

-Insurance&cargoclaims 974 830

-Lossesonunfinishedvoyage* 1089 0

-Offhireclaims 2651 1176

TOTAL 6763 4257

*Representsestimatedlossonunfinishedvoyagerecognisedinaccounts.

Short term provision As at 31st

March 2015Provided during

the yearUtilised during

the year Unused Amount

reversed As at 31st

March 2016

EmployeeBenefits

-LeaveEncashment 685 1470 1678 - 477

-PostRetirementMedicalScheme 126 155 149 - 132

Others

ForeignTaxation 1440 - - - 1440

Insurance&cargoclaims 830 246 102 - 974

Lossesonunfinishedvoyage - 1089 - - 1089

Offhireclaims 1176 1485 - 10 2651

4257 4445 1929 10 6763

NOTE “10” - Tangible Assets

PARTICULARS GROSS BLOCK DEPRECIATION Impairment Loss

provided during the

year

NET BLOCK Cost as at 31-3-15


Cost as at 31-3-16

up to 31-3-15

Provided during the

year


up to 31-3-16

As at 31-3-16

As at 31-3-15

Fleet 1,819,098 87,821 (5,580) 1,912,499 594,547 59,510 (1,834) 655,892 13,638 1,242,970 1,224,551

OwnershipContainers 2,214 - 1,001 1,213 2,214 - 1,001 1,213 - - -

FreeholdLand 271 - - 271 - - - - - 271 271

Buildings 1,313 372 - 1,685 576 24 - 600 - 1,085 737

OwnershipFlatsandResidentialBuildings 318 - 3 315 177 5 2 180 - 135 141

Furniture,Fittings&Equipmentsetc. 7,372 115 480 7,007 6,345 316 480 6,181 - 826 1,027

MotorVehicles 92 - 1 91 84 4 1 87 - 4 8

Total - A 1,830,678 88,308 (4,095) 1,923,081 603,943 59,859 (350) 664,153 13,638 1,245,291 1,226,735

Assetsheldfordisposal

31 - 4 27 - - - - - 27 31

Total - B 31 - 4 27 - - - - - 27 31

Total (A + B) 1,830,709 88,308 (4,091) 1,923,108 603,943 59,859 (350) 664,153 13,638 1,245,318 1,226,766 Previous Year’s

Total 1,850,664 29,937 49,892 1,830,709 572,262 78,902 47,221 603,943 - 1,226,766


120

Notes : (1)AdditionstoFleetinclude`37631lakhs(Prev.yr.`28260lakhs)onaccountofcurrencyexchangedifferenceadjustedasperSignificantAccountingPolicyNo.8(c)

(2)BorrowingcostandInterestcapitalisedduringtheyearis`Nil(Prev.yr.`Nillakhs).(3)Impairmentlossonvesselsamountingto`13638lakhs(Prev.yr.Nil)hasbeenprovidedduringtheyear.(4)BuildingsincludecostofShippingHouseatMumbai`134lakhs(Prev.yr.`134lakhs)whichisonleaseholdlandwhereinthevalueofleaseisconsideredas`1.

(5)OwnershipFlatsandResidentialBuildingsinclude:CostofsharesandbondsinCooperativeSocieties/Companyoffacevalue`0.73lakhs(Prev.yr.`0.73lakhs).

NOTE “11” - Intangible Assets

PARTICULARS GROSS BLOCK AMORTISATION NET BLOCK Cost as at 31-3-15


Cost as at 31-3-16

up to 31-3-15

Provided during the

year


up to 31-3-16

As at 31-3-16

As at 31-3-15

ComputerSoftware 7,007 62 - 7,069 5,798 1,213 - 7,011 58 1,209

Total 7,007 62 - 7,069 5,798 1,213 - 7,011 58 1,209

Previous Year’s Total 6,909 98 - 7,007 4,551 1,247 - 5,798 1,209

NOTE -”12” Capital Work in Progress

ParticularsAs at



` In lakhs

1 Construction Work in Progress - Fixed AssetsAssetsunderConstructionexcludingadvance 15,793 50,729

2 Construction Period Expenses a.Interest 2,105b.Otherdirectlyattributableexpenses 80c.Exchangefluctuation 3,783

- 5968TOTAL 15,793 56697

Note “13” - Non - Current Investments

ParticularsAs at



` In lakhsTrade InvestmentsInvestments in Equity InstrumentsUnquoted

A Others 5,00,00,000(Prev.yr.5,00,00,000)OrdinarySharesof`10eachfullypaidofSethusamudramCorp.Ltd. 5000 5000Less:Provisionfordimunitioninvalueofinvestment 5000 5000

- -3438EquitySharesof̀ 20/-eachofScindiaSteamNavigationCompanyLtd.,fullypaid(`0.30lakhs;Prev.yr.`0.30lakhs) - -Less:LossonMarkedtoMarket(`Nil,Prev.yr.`Nil) - -

- -



ParticularsAs at



` In lakhs60,000EquitySharesof`10/-eachofWoodlandSpecialityHospitalLtd.(Prev.yr.Nil)

6 6 0

Total 6 0Total unquoted investments 6 0Total dimunition in value of unquoted investments 5000 5000

A SethusamudramCorporationLtd.(SCL),aSpecialPurposeVehiclewasincorporatedon06.12.2004fordevelopingtheSethusamudramChannelProjectwithTuticorinPortTrust,EnnorePortLtd,VisakhapatnamPorttrust,ChennaiPortTrust,DredgingCorporationofIndiaLtd.,ShippingCorporationofIndiaLtd.andParadipPortTrustastheshareholders.SCIparticipatedwithaninvestmentof`5000lakhs(previousyear`5000lakhs).Thedredgingworkissuspendedfrom17.09.2009consequentuponthedirectionoftheHon’bleSupremeCourtofIndia.Asthereisnoprogressintheprojectsincethen,theManagementhadprovidedfordimunitiontowardstheinvestmentinFY2012-13.

NOTE - “14” - Long term Loans & Advances

ParticularsAs at



` In lakhsUnsecured, Considered Good (unless otherwise stated)

1 Loans&AdvancestoRelatedParties(Refer Note No.34)

20826 21125

2 AdvanceTax(Net) 10493 68493 Other Loans & AdvancesLoanstoEmployees(OfthisLoanof`1324lakhs,Prev.Yr.`953lakhsissecured)

1825 1462

Excess-GratuityFund 4328 5578Others 0 8344

TOTAL 37472 43358

NOTE - “15” - Other Non Current Assets

ParticularsAs at



` In lakhs1 *Accruedinterestonloanstoemployees(Secured,consideredgood)

475 448

2 Deposits-Unsecured 767 767TOTAL 1242 1215

*Includes due from Directors & other Officers - Nil (Prev. Yr. Nil)

Note - “16” Current Investments

ParticularsAs at



` In lakhsA Joint Venture Investment in Equity Instruments

Unquoted - valuedatcost46,060,000 (Prev. Yr.46,060,000) Registered Shares ofRials 5,000 each of Irano Hind Shipping Co. Ltd.,Tehran,Fullypaid(including46,053,385BonusShares)* 39 391,00,000 (Prev.yr.1,00,000)sharesof`10each fullypaidupofSAILSCIShippingCompanyPvt.Ltd. 10 10

49 49


122

ParticularsAs at



` In lakhsB Investments in Mutual Funds

Unquoted -valuedatNetAssetValue

3,73,327.494UnitsofUTIMoneyMarketFund-InstitutionalPlan-DirectPlan-DailyDividendReinvestment 3746 3746 7,669

TOTAL 3795 7718Total Quoted investments - -

Total Unquoted investments 3795 7718*30SharesareheldinthenameofSCIDirectorsandarewithIranoHindShippingCo.Ltd,Tehrani TheCompanyholds49%interestinIranoHindShippingCo.Ltd.ajointventurecompanyincorporatedinIranonwhichsanctionhas

beenimposedbyUnitedNationsOrganisation(UN).TheexposureoftheCompanyintheJointVentureislimitedto`39lakhs.Ithasbeendecidedbythejointventurepartnerstodissolvethiscompany.

ii TheCompanyenteredintoajointventureagreementwithSteelAuthorityofIndiaLtd.withparticipationinterestintheratioof50:50andpromotedajointlycontrolledentitySAILSCIShippingPvt.Ltd.(SSSPL).Thesaidcompanywasincorporatedon19.05.2010withanauthorisedsharecapitalof`1000lakhs.TheCompanyhassubscribedequitycapitalof100000sharesof`10eachamountingto`10lakhs.Ithasbeendecidedbythejointventurepartnerstowindupthiscompany.

NOTE - “17” - Inventories

ParticularsAs at



` In lakhs

1 FuelOil 8635 87192 Stores,Spares 0 547

TOTAL 8635 9266Inventoriesarevaluedatcostasdeterminedby“MovingAveragePrice”methodornetrealisablevaluewhicheverislowerunlessotherwisestated.

NOTE - “18” - Trade Receivables

ParticularsAs at



` In lakhs1 Over Six Months from the due date of paymenti)Unsecured,ConsideredGood 28500 26705ii)Unsecured,ConsideredDoubtful 16813 14511

45313 41216Less:ProvisionforDoubtfulReceivables 16813 14511

28500 267052 OtherDebtsi)Unsecured,ConsideredGood 43332 - 53196ii)Unsecured,ConsideredDoubtful - -

43332 53196Less:ProvisionforDoubtfulReceivables - -

43332 53196TOTAL 71832 79901



NOTE - “19” - Cash & Bank Balances

ParticularsAs at



` In lakhs

A. CASH AND CASH EQUIVALENT

1 BankBalances

CurrentAccount 16538 17655

InterBankTransfers 0 1

TermDepositmaturingwithin3months 34368 1513

50906 19169

2 CashBalances,IncludingImprest 25 17

3 MarginMoneyforBankGuarantee 14 14

B. OTHER BANK BALANCES

1 TermDepositmaturingbetween3to12months 51504 103891

2 TermDepositmaturingafter12months 34110 10285

3 EarmarkedBalancewithBanktowardsunpaiddividend 46 53

4 StaffWelfarefundBalancesInFixeddepositAccount 151 118TOTAL 136756 133547

Fixeddepositamountingto`24829lakhs(PrevYr:`25439lakhs)arepledgedwithbanksforBorrowings

Note- “20” - Short term Loans & Advances

ParticularsAs at



` In lakhsA. Advance recoverable in cash or in kind or for value to be

received:a) From Related Parties (Refer Note no.34 for details)*

InterestReceivable(Unsecured,ConsideredGood) 11 11b) From Employees

i)Secured,ConsideredGood 192 167ii)Unsecured,ConsideredGood 903 460

1095 627c) From Otherii)Unsecured,ConsideredGood 9534 8278iii)Unsecured,ConsideredDoubtful 1404 1339

10938 9617Less:ProvisionforDoubtfulAdvances 1404 1339

9534 82782 Other recoverable / adjustableUnsecured,ConsideredGooda)CENVATCreditonServiceTax/VATetc 7540 4503b)PrepaidExpenses 612 346c)Others 12 12

8164 48613 Advance Service Tax 1064 -


124

ParticularsAs at



` In lakhs4 MAT CreditOpening - -Add:Creditduringtheyear 2450 -Less:MATCreditAvailed 2450 -

- -5 Sundry Deposits

Unsecured,ConsideredGood 189 183TOTAL 20057 13960

*IncludesduefromDirectors&otherOfficers-Nil(Prev.Yr.Nil)

NOTE - “21” - Other Current Assets

ParticularsAs at



` In lakhs

1 InterestAccruedonInvestments/BankDeposits 1948 20762 InterestAccruedonLoanstoemployees* 44 903 UnfinishedVoyagesExpenses 5823 65154 ClaimRecoverable 772 1570

TOTAL 8587 10251*IncludesduefromDirectors&otherOfficers-Nil(Prev.Yr.Nil)

NOTE - “22” - Revenue from Operations




` In lakhs

1 Freight 278373 2793652 CharterHire 115090 1213693 Demurrage 20253 189134 ContractRevenue:Coreshippingactivities 447 463Incidentalactivities 3645 3743Reimbursementofoverheads 3579 3542

7671 7748TOTAL 421387 427394

NOTE - “23” - Other Operating Revenues




` In lakhs

1 Training&Consultancyfee 1633 12372 SundryReceipts(Core) 52 6493 SundryReceipts(Incidental) 84 634 ExcessProvisions&UnclaimedCreditWrittenBack 851 5445 RecoveryofInsurance&PIClaims 791 1237

TOTAL 3411 3730



NOTE - “24” - Other Income




` In lakhs

1 ProfitonSaleofFixedAssetsa) SaleofShips(Net) - 12055b) SaleofOtherFixedAssets 1245 187

1245 122422 Intereston:a) FixedDepositswithBanks 8690 9362b) FromRelatedParties-JointVenture(ReferNoteno.31) 1883 2077c) LoanstoEmployees 69 64d) Others 6 2296

10648 137993 DividendFromMutualFund 625 6724 OtherMiscellaneousIncome 100 2115 NetgainonForeignCurrencyTransaction/Translation 1324 -6 IncomefromRescindmentofContracts 1952 124007 Profitonsaleofbunker - 157

TOTAL 15894 39481

NOTE - “25” - Cost of services rendered




` In lakhs

1 Direct Operating Expenses :AgencyFees 2325 2175Brokerage 3098 3613Commission 5412 5714Stevedoring,Dunnage,CargoExpensesEtc.&SlotExpensesOnJointSectorContainerServices(Net)

16798 16418

Marine,LightAndCanalDues 34565 36066FuelOil(Net) 63748 118420WaterCharges 331 335

2 Hire Of Chartered Steamers 50381 473723 Other Indirect Operating Expenses Victualling,TransferAndRepatriationAndOtherBenefits 4042 4788Stores&Spares 18427 17161SundrySteamerExpenses 2239 1915RepairsAndMaintenanceandSurveyExpenses 26771 19035InsuranceAndProtection,IndemnityClubFees&InsuranceFranchise 8456 8800

TOTAL 236594 281813

NOTE - “26” - Employees Benefit Expenses




` In lakhs

A Floating staffWages,BonusAndOtherExpensesOnFloatingStaff 27725 25813Gratuity 931 220ContributionToProvidentFund 318 369


126

B Shore Staff Salaries,Wages,Bonusetc 16215 14729Gratuity 383 75ContributionToProvident&OtherFunds 850 831

C RemunerationtoDirectors 201 180 TOTAL 46623 42217

NOTE - “27” - Other Expenses




` In lakhs

1 Other ExpensesPower&Fuel 583 520Rent 298 224RepairsandMaintenance-Building 616 635-Others 1360 1638Insurance 90 136RatesandTaxes 218 248Auditors'Remuneration* 66 62EstablishmentCharges 1626 1554Advertisement&Publicity 246 161Legal&professional 1209 641Postage,TelephoneTelegram&Telex 16 133Printing&stationery 158 182Training,Seminar&ConferenceFee 387 385Travel&Conveyance 399 363Directors'SittingFees - 11Directors'TravelExpenses 34 55NetlossonForeignCurrencyTransaction/Translation 1 1170Debts/Advanceswrittenoff 23 3InterestandPenalties 1529 51BankCharges 534 58ServicetaxineligbleforCENVAT 3481 98Sundries 126 125

2 ProvisionsProvisionforOffHireEtc. 1596 574ProvisionforDoubtfulDebtsandAdvances 2533 5221ForeignTaxation 59 86Provisionforlossonunfinishedvoyage 1089 (70)

TOTAL 18277 14263

*Auditors'Remunerationincludes:

AuditFees 35 29

CertificationWork 27 17

Travelling&OutofPocketExpenses 4 16

TOTAL 66 62



NOTE - “28” - Finance Cost




` In lakhs

1 Interest Payments on:RupeeTermLoanfromBanks/FinancialInstitutions 284 422ForeignCurrencyTermLoanfromBanks/FinancialInstitutions 16595 16264Others 1914 3561

18794 202472 OtherBorrowingCost 2295 3520

TOTAL 21089 23767

NOTE - “29” – Income/Expenses relating to previous years




` In lakhs1 Income:BunkerRecovery 6 -CharterHire (784) (1640)Freight 30 (291)Remunerationfrommanagedvessels - 125Others 4 9

TotalIncome (744) (1797)2 Expenditure:Stevedoringcharges - (951)Brokerage&commission 8 45Fueloil 186 191Salaries-Shorestaff (1) -Charterhirepayments 112 61Sundrysteamercharges - (124)CurrencyExchangeDifference - 133Stores,RepairsandMaintenance 30 296Marine,light&canaldues - 69Insurance&P&I 102 (203)Demurrage - (161)ServiceTax/CENVAT (1370) 217Establishmentcharges - 31Others (5) (30)

TotalExpenses (938) (426)NET INCOME /(EXPENDITURE) 194 (1371)

NOTE “30”: Basis of Preparation

TheconsolidatedfinancialstatementscompriseofthefinancialstatementsofTheShippingCorporationofIndiaLtd.(hereinafterreferredtoas“VenturerCompany”)anditsjointlycontrolledentities(hereinafterreferredtoas“JointVenturers”).TheVenturerCompanyalongwithitsJointVenturesishereinafterreferredtoasthe‘Group’.Interest inJointVentureshavebeenaccountedbyusing theproportionateconsolidationmethodasperAccountingStandard(AS)27-“FinancialReportingofInterestinJointVentures”.Incaseofforeignjointlycontrolledentities,beingnon-integraloperations,revenueitemsareconsolidatedattheaveragerateduringtheyear.Allassetsandliabilitiesareconvertedatratesattheendoftheyear.Exchangegains/(losses)arisingonconversionisrecognizedundertheForeignCurrencyTranslationReserve.Theconsolidatedfinancialstatementsarepreparedusinguniformaccountingpolicies inusefor theGroup.FornonuniformaccountingpoliciesbeingmainlycapitalizationofdrydockingbyforeignjointventuresasperInternationalFinancialReportingStandards,thesamehas


128

beenrecognisedintheStatementofProfitandLossandpresentedinthemannerinwhichtheVenturercompanypresentsthesameinitsfinancialstatements.NOTE “31” : ThefinancialstatementsofthejointventuresusedintheconsolidationhavebeenpreparedunderIFRSandarefortheperiod01stJanuary2015to31stDecember2015whichisdifferentthanthatoftheperiodoffinancialstatementsoftheventurercompanybylessthansixmonths.AdjustmentshavebeenmadeinthefinancialstatementsforsignificanttransactionsorothereventsoccurredbetweenthedateoffinancialstatementsoftheJointVenturesandtheventurercompany.

NOTE “32” : Companies considered for consolidationThefollowingjointventureshavebeenconsideredforthepurposeofconsolidation:-


Country of Incorporation Percentage of Interest As on 31.03.16 (As on 31.03.15)

1.IndiaLNGTransportCompany(No.1)Ltd. Equity Malta 29.08%(29.08%)



4.IndiaLNGTransportCompany(No.4)Ltd. Equity Singapore 26.00%(26.00%)

IranoHindShippingCompanyLtdhasbeenexcludedfromtheconsolidationproceduresasthejointventureoperatesunderseverelongtermrestrictionwhichissignificantlyimpairingitsabilitytotransferfundstotheVenturercompany.SAILSCIShippingPvtLtd.hasbeenexcludedfromtheconsolidationproceduresasthejointventureisheldfordisposalinthenearfuture.InvestmentsincompaniesotherthanthoseconsideredintheconsolidationprocedureshavebeenaccountedasperAccountingStandard(AS)13on“AccountingforInvestments”.

NOTE –“33”– Contingent liabilities & Commitments

ParticularsAs at



` In lakhs

Contingent Liabilities and Commitments (to the extent not provided for)

I Claim against the company not acknowledged as debts –

A ClaimmadebyM/s.ChokhaniInternationalLtd.towardsdrydockexpensespendingbeforeHighCourt,Chennai

4881 4662

B CargoLoss,Freight,Demurrage,SlotPayments,FuelCost,otheroperationalclaimsandCustomdutydisputeddemand.(AscertifiedbytheManagement)

30523 5083

C DisputeddemandofStatutoryDues(AscertifiedbytheManagement) 116414 18972

a)IncomeTax&SalesTax 19306 18970

b)ServiceTax 97108 2

II Guarantees given by the Banks

onbehalfofthecompany 4907 4745

onbehalfoftheJointVenturetotheextentoftheCompany’sshare. 7183 6735

III Undertaking cum Indemnity given by Company - -

IV Cargo Claims covered by P&I Club 4779 8396

V Bonds/Undertakings given by the Company to Customs Authorities. 28341 25635

VI Corporate Guarantees/Undertakings

A InrespectofJointVentures NotAscertained NotAscertained

B Others 3957 5820



ParticularsAs at



` In lakhs

Commitments:

i. Estimatedamountofcontractsoncapitalaccount,remainingtobeexecutedoncapitalaccountandhencenotprovidedfor(NetofAdvancepaid)(AscertifiedbytheManagement)

- 68

ii Uncalledliabilityonsharesandotherinvestmentspartlypaid - -

iii Othercommitments(AscertifiedbyManagement) - -

NOTE –“34” – Related Party DisclosuresNamesofrelatedpartyentitieswithwhomtransactionswerecarriedoutduringtheperiod:

Joint Venture Companies:(Other than the joint ventures whose financial statements have been consolidated)1. SAILSCIShippingPvt.Ltd.2. IranoHindShippingCo.LtdOther related partiesMitsuiO.S.K.LinesLtd.NipponYusenKabushikiKaishaKawasakiKaishenKaishaLtd.QatarShippingCompanyPetronetLNGLtd.Key Management Personnel:1. B.B.Sinha2. A.K.Gupta(retiredon31.12.2015)3. S.Narula4. S.Thapar(retiredon30.09.2015)5. S.VKher(w.e.f01.10.2015)6. K.Devadas7. H.K.Joshi8. DipankarHaldar9. AkiraKono10. AkiraKunimatsu11. AkiraMisaki12. JosephFrancisCoutinho13. KentaMatsuzaka14. RyotaHayashi15. SanjeevRanjan16. TakeshiKato17. BarunMitra18. RavinderKumarGarg19. SpyridonLeousis20. HitoshiNagasawa21. AkiraShoji22. RyutaroOkuzava


130

The following transactions were carried out with related parties:


2014-15 (` in lakhs)

Investment balances at year end SAILSCIShippingPvtLtd. 10 10Total 10 10

Loans realised during the year SAILSCIShippingPvt.Ltd. - 38Total - 38

Loan balances at year end IranoHindShippingCo.Ltd. 23 23KLine 2466 2494MOL 7839 7935NYK 4933 4989PLL 488 475QShip 5115 5137

Total 20864 21053Investment balances at year end IranoHindShippingCo.Ltd. 39 39

Total 39 39Payable on account of Ship IranoHindShippingCo.Ltd. 18356 16178

Total 18356 16178Interest charged IranoHindShippingCo.Ltd. 1221 -

Total 1221 -Accrued interest KLine 1 1

MOL 4 4NYK 2 3PLL 0 0QShip 2 3

Total 9 11Charter Hire Income earned PLL 4708 3537

Total 4708 3537Interest Expenses KLine 219 248

MOL 700 791NYK 440 496PLL 40 39QShip 449 494

Total 1848 2068Other Payables PLL 415 386

Total 415 386Shareholders Loan repaid during the year KLine 206 356

MOL 662 1158NYK 413 713PLL 24 -QShip 394 597

Total 1699 2824

Reimbursement of Expenses during the year KLine 1 5MOL 1 6QShip 1 3

Total 3 14Trade Receivables PLL 400 372

Total 400 372



(ii) Key Management Personnel For the Year ended 31/03/2016


(` in lakhs) (` in lakhs)

Remuneration 224 221

Loans recovered during the period - 0.11

Loan amounts due as at the end of the period - -

Maximum amount due during the period - 0.11

NOTE –“35” – Joint Venture InformationDetailsofJointVentureswhicharenotconsolidated,asrequiredbyAS-27“FinancialReportingofInterestsinJointVentures”aregivenbelow:I) Details of Joint Venture Interest

Name Description of Interest Country of Incorporation


(As on 31.03.15)


(As on 31.03.15)

1. Irano Hind Shipping Company Ltd. Equity Iran 49%(49%) *IRISL51.00%(51.00%)

2. SAIL SCI Shipping Pvt. Ltd. Equity India 50.00%(50.00%) *SAIL50.00%(50.00%)

*IRISL-IslamicRepublicofIranShippingLine*SAIL-SteelAuthorityIndiaLtd.

Note – “36” - Company’s Interest in the Joint Venture

(` In Lakhs)

Sr. No.

Name As on Assets Liabilities For the period ended

Income Expenditure

1 IranoHindShippingCompanyLtd. 20.03.2015 46854 45890 20.03.2015 836 7449

2 SAILSCIShippingPvt.Ltd.(Unaudited) 31.03.2016 7 0.14 31.03.2016 0.43 0.39

NOTE –“37”– Earnings per share

Particulars For the Year ended 31/03/2016


A Profit/(-)Lossaftertax(`inlakhs) 38940 19501B WeightedaveragenumberofEquityShares(Nos) 465799010 465799010C Basic&DilutedEarningsperShare(in`)beforeExtraordinaryItems 8.36 4.19D Basic&DilutedEarningsperShare(in`)afterExtraordinaryItems 8.36 4.19E NominalValueperEquityShare(in `) 10.00 10.00TheGroupdoesnothaveanyoutstandingdilutedpotentialequityshares.Consequently,thebasicanddilutedearningspershareoftheGroupremainthesame.

NOTE –“38”– Segment Reporting

Particulars For the Year ended 31/03/2016 (` in lakhs)

For the Year ended 31/03/2015(`in lakhs)

1 Segment Revenuei) LinerSegment 53,471 90,185ii) BulkSegment 336038 317018iii) TechnicalandOffshore 33,955 34,891iv) Others 1333 1086v) Unallocated 5,247 13627

Total 430044 456807


132

Particulars For the Year ended 31/03/2016 (` in lakhs)

For the Year ended 31/03/2015(`in lakhs)

2 Segment ResultsProfit/(Loss)beforetax&interesti) LinerSegment (15,900) 1,571ii) BulkSegment 56186 10474iii) TechnicalandOffshore 10401 11,310iv) Others 1,008 720

Total 51695 24075Add:UnallocatedIncome(Netofexpenditure) 2339 12918Add:Interest(Net) (10441) (9968)

Total Profit before tax 43593 270253 Segment AssetsLinerSegment 99329 104429BulkSegment 1169458 1184364TechnicalandOffshore 130440 139277Others 531 515

Total 1399758 1428585UnallocableCorporateAssets 149793 155303

Total 1549551 15838884 Segment LiabilitiesLinerSegment 91753 79119BulkSegment 120530 95879TechnicalandOffshore 10747 8041Others 464 230

Total 223494 183269UnallocableCorporateLiabilities 635221 748702

Total 858715 9319715 Capital Expenditure during the yearLinerSegment 1163 1032BulkSegment 80942 23550TechnicalandOffshore 4877 3734Unallocated 549 312

Total 87531 286286 DepreciationLinerSegment 2755 2841BulkSegment 53002 70429TechnicalandOffshore 5315 6879

Total 61072 801497 ProvisionsLinerSegment 2,770 4396BulkSegment 15,566 1248TechnicalandOffshore 367 110Unallocated 10 58

Total 18713 58128 Impairment Loss charged to P & LLinerSegment - -BulkSegment 12563 -TechnicalandOffshore 1075 -

Total 13638 -



Notes:-1. Segmentdefinitions-Linersegmentincludesbreakbulk,containertransport,passengervesselsandalsopassengervessels&researchvesselsmanagedonbehalfofotherorganisations.Bulksegmentincludestankers(bothcrudeandproduct),drybulkcarriers,gascarriers,phosphoricacidcarriersandLNGvesselsmanagedonbehalfofjointventurecompanies.Technical&Offshoreservicessegmentincludecompanyownedoffshorevessels,offshorevesselsmanagedonbehalfofotherorganisationsandincomefromtechnicalconsultancy.OtherssegmentincludeincomeearnedfromMaritimeTrainingInstitute.Unallocableitemsandinterestincome/expensesaredisclosedseparately.

2. Allexpense&revenueitemsareallocatedvesselwisewhereverpossible.Expense&revenueitemsthatcannotbeallocatedvesselwiseareallocatedonthebasisofunitcumGRTmethodi.e.50%allocatedonthebasisofunits&balance50%onthebasisofadjustedGRT.Forvesselswhicharebiggerthan20000GRT,GRTisadjustedtoonethirdofGRTor20000GRT,whicheverismore.

3. Agentadvancesareallocatedtosegmentintheratioofexpensesbookedbytheagentsduringtheyear.

NOTE – “39” Disclosures of Employee benefits as per Accounting Standard-15 “Employees benefits”, as defined there in, are given belowA Description of type of employee benefitsa) TheCompanyofferstoitsemployee’sdefinedbenefitsplansintheformofGratuity,leaveencashmentandpostretirementMedicalScheme

i. Gratuity a)Representsbenefitstoemployeeonthebasisofnumberofyearsofservicerenderedbyemployee.Theemployeeisentitledtoreceivethesameonretirementorresignation.

b)SCIhasformedatrustforgratuitywhichisfundedbytheCompanyonaregularbasis.Theassetsofthetrusthavebeenconsideredasplanassets.

ii. LeaveEncashment Representsunavailedleavetothecreditoftheemployeeandcarriedforwardinaccordancewithtermsofagreement.

iii. PostRetirementMedicalBenefitScheme

Representsbenefitsgiventoemployeessubsequenttoretirementonthehappeningofanyunforeseeneventresultinginmedicalcoststotheemployee

b) TheCompanyofferstoitsemployeesdefinedcontributionplanintheformofprovidentfund,postretirementmedicalscheme(Neww.e.f.01.01.2007)andpensioncontribution

Thedetailsoftheplanareasfollows:-

i. ProvidentFund Itisacontributionmadeonmonthlybasis@12%ofmonthlyBasicandDAtothePFTrustwhocreditsannualinterestonPFbalances.Thecorpusaccumulatedispaidonretirementoftheemployee.

ii. PostRetirementMedicalScheme(Neww.e.f.01.01.2007)

Itisacontribution@4%ofmonthlyBasicandDAtowardsprovisionofemployees’medicalexpensesincurredafterretirement.

iii. Pensioncontribution Itisacontribution@12%ofmonthlyBasicandDAtowardsprovisionofannuityafterretire-mentofemployees.

B Movement in the net liability recognized in the balance sheet are as follows: (` In lakhs)


As At 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15Status Funded Funded Unfunded Unfunded Unfunded UnfundedAtthebeginningoftheperiod 10426 9797 5057 4906 2030 1858Currentservicecost 709 1249 1138 1037 3 -InterestCost 771 859 335 393 156 165Actuarial(gains)andlosses(includingforprioryears)

945 (426) 158 (139) 176 127

CurtailmentPeriodBenefitsPaid (1457) (1053) (1678) (1085) (149) (120)Attheendoftheperiod 11394 10426 5010 5057 2216 2030


134

C Analysis of Percentage of defined Benefit obligation into funded and unfunded: (` In lakhs)


TotalAmountofdefinedbenefitobligation 18620 17512

AmountoffundedDefinedbenefitobligation 11393 10425

Percentageoffundeddefinedbenefitobligation 61.19 59.53

Percentageofdefinedbenefitobligationnotfunded 38.81 40.47

D Movement in Fair Value of plan assets (` In lakhs)



Openingvalueoffairvalueofplanassets 16003 15600 NIL NIL NIL NIL

ExpectedReturnonplanassets 1375 1408 NIL NIL NIL NIL

BenefitsPaid (1457) (1053) NIL NIL NIL NIL

Actuarialgain/(loss)onplanassets (199) 48 NIL NIL NIL NIL

Closingvalueoffairvalueofplanassets 15722 16003 NIL NIL NIL NIL

E Reconciliation of the present value of defined obligation and fair value to the assets and liabilities recognized in the balance sheet:

(` In lakhs)



Presentvalueofobligationsattheendoftheperiod

11394 10426 5010 5057 2216 2030

Less:fairvalueofassetsasthebalancesheetdate

15722 16003 NIL NIL NIL NIL

Net(Liability)/Assetdisclosedinthebalancesheet

4328 5577 (5010) (5057) (2216) (2030)

F Total Expense recognized in the statement of profit and loss (` In lakhs)


For the period ended on 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15CurrentServiceCost 709 1249 1138 1037 3 NILInterestCost 771 859 335 393 156 165Expectedreturnonplanassets (1375) (1408) NIL NIL NIL NILActuarial(gains)andlosses 945 (427) 158 (139) 176 127PastServiceCost NIL NIL NIL NIL NIL NILLosses(gains)oncurtailmentsandsettlements

NIL NIL NIL NIL NIL NIL

BenefitsPaid* NIL NIL (1678) (1140) (149) (120)Actuarial(gains)/lossonplanassets 199 (48) NIL NIL NIL NILChargedtoprofitandloss 1249 226 (47) 151 186 173* Forgratuity,thebenefitsarepaidbythetrustandarenotdebitedtotheprofit&lossoftheCompany.ForleaveencashmentandPostRetirementMedicalBenefitScheme,thebenefitspaidaredebitedtothestatementofProfitandLoss.



NOTES ON CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016G (i) Percentage of category of plan assets to fair value of plan assets (`In lakhs)


Fair Value % of Total Fair Value % of Total

InvestmentinGovernmentsecurities 5898 37.51 5398 33.74

InvestmentinBonds 3872 24.63 3853 24.08

Investmentindepositsincludingbankbalances 5506 35.02 6387 39.91

OtherAssetsincludingaccruedinterest 446 2.84 364 2.27

Total 15722 16002

H.NoneofthefinancialassetsofSCIhavebeenconsideredinthefairvalueofplanassets.I. Theexpectedrateofreturnonplanassetshasbeenestimatedonthebasisofactualreturnsofthetrustinthepastyears.Thesecuritiesoftrusthaveaneffectonthefairvalueofplanassetsasthevalueofthesecuritiesvarywiththechangesinthemarketinterestrates.

J. ActualReturnonplanassets`1176lakh.(Prev.period`1456lakhs)K. Principalactuarialassumptionsatthebalancesheetdate:


For the period ended on 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15Discountrateattheendoftheperiod 7.46% 7.95% 7.46% 7.95% 7.46% 7.95%Expectedreturnonplanassetsattheendoftheperiod

9.00% 9.00% NIL NIL NIL NIL

Futuresalaryincreases 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%MortalityRate IALM

(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

IALM(2006-08)Ult

Medicalcostincrementaltrendrates 8% 8%NormalRetirementAge 60Years 60Years 60Years 60Years 60Years 60Years

L Experience Adjustment for Gratuity Liability (` In lakh)

As on 31/03/2011 31/03/2012 31/03/2013 31/03/2014 31/03/2015 31/03/2016

Presentvalueofdefinedbenefitobligation

11780 11088 11052 9797 10425 11394

FairvalueofPlanAssets 17424 16419 16081 15600 16003 15722

Surplus/(Deficit) 5644 5331 5029 5803 5577 4328

ExperienceadjustmentonPlanLiabil-ity(Gain)/Loss

(1158) (659) (121) (304) (191) 945

ExperienceadjustmentonPlanAsset(Loss)/Gain

(136) (246) 124 (46) (380) (198)

M Contributionexpectedtobepaidinthenextyear`.NILN Effectofanincreaseofonepercentagepointandtheeffectofadecreaseofonepercentagepointintheassumedmedicalcosttrendrateson:(i) theaggregateofthecurrentservicecostandinterestcostcomponentsofnetperiodicpost-employmentmedicalcosts;and(ii)theaccumulatedpost-employmentbenefitobligationformedicalcosts.

136

(` In lakhs)

Post Retirement Medical Benefit Scheme

Aggregate of the current service cost and interest cost

Accumulated post-employment benefit obligation for medical costs

Particulars 2015-16 2014-15 2015-16 2014-15

Effectofonepercentageup 164 40 2395 2183

Effectofonepercentagedown 156 40 2064 1894

O Theestimatesoffuturesalaryincreases,consideredintheactuarialvaluation,takesintoaccountinflation,seniority,promotionandotherrelevantfactorssuchassupplyanddemandwiththeemploymentmarket.

P TheCompany’sProvidentFundisexemptedundersection17ofEmployees’ProvidentFundandMiscellaneousProvisionsAct,1952.Conditionsforgrantofexemptionstipulatethattheemployershallmakegooddeficiency,ifany,intheinterestratedeclaredbythetrustvis-a-visstatutoryrate.

NOTE- “40” Additional Information as required under Schedule III to the Companies Act, 2013 :

Name of the Enterprise Net Assets i.e. Total Assets minus Total Liabilites

Share in profit or loss

As % of consolidated net assets

` in lakhs As % of Share in profit or loss

` in lakhs

Parent

Shipping Corporation of India Ltd. 100.03% 691039 96.89% 37729

Foreign Joint Ventures

India LNG Transport Co. (No. 1) Ltd. 0.40% 2772.01 2.97% 1156.39

India LNG Transport Co. (No. 2) Ltd. 0.41% 2800.43 3.89% 1514.55

India LNG Transport Co. (No. 3) Ltd. (0.38%) (2640.55) 0.17% 64.38

India LNG Transport Co. (No. 4) Ltd. 0.40% 2765.29 (0.11%) (41.08)

100.86% 696736.18 103.81% 40423.24

Intercompany Eliminations/ Adjustments (0.86%) 5900.23 3.81% (1483.61)

TOTAL 100.00% 690835.95 100.00% 38939.63

NOTE – “41”Duringtheyearthecompanyhasadoptedtheusefullifeof25yearsinrespectofTankers&Offshorevesselswhichisdifferentfromtheusefullifeof20yearsspecifiedinpartCofScheduleIItotheCompaniesAct,2013basedonthetechnicalparametersincludingdesignlifeandthepastrecord.Further,thecompanywhilecalculatingthedepreciationfortheyearhasadoptedtheresidualvalueofallthevesselsas5%ofinitialcostofvesselsasagainstRe1/-consideredearlier,keepinginviewtheactualrealisationinthepastandthelimitspecifiedinpart‘C’ofScheduleIItotheCompaniesAct,2013.Consequenttothechange,thedepreciationfortheyearislower&theprofitfortheyearishigherby19878lakhs.NOTE –“42”Asper therequirementsofSchedule II to theCompaniesAct,2013,wherecostofapartof theasset issignificant to totalcostof theassetandusefullifeofthatpartisdifferentfromtheusefullifeoftheremainingasset,usefullifeofthatsignificantpartshallbedeterminedseparatelyfordepreciationpurpose.Afterdetailedinternalstudy,thecompanyisoftheviewthatnoneofthecomponentsofthefixedassetsishavingusefullifedifferentfromtheusefullifeoftheremainingassets.Consequently,theascertainmentofcostofthecomponentswhethersignificantornottothetotalcostofassetwasnotrequired.However,theoptionoftreatingdrydockingexpensesasaseparatecomponentisbeingexaminedbythemanagement.NOTE – “43”ThecarryingamountsofCompany’sassetshavebeenreviewedattheBalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Suchindicationexistsinthecaseoffewvessels.Thereisanimpairmentlossof`13638lakhsprovidedinthestatementofprofitandlossaccountfortheyearwhicharoseoutofcashflowprojectionsbasedonmanagement’sbestestimateofthesetofconditions



thatexistsovertheremainingusefullifeoftheassettakingintoconsiderationthefollowingassumptions:a. Timecharteryieldistakenfornextfiveyearsbasedonexternalevidencei.e,reportofDrewry,areputedresearchandadvisoryorganisationforthemaritimesector.

b. Fortheremainingeconomiclifeoftheasset,theyearwisegrowthinthetimecharteryieldhasbeenextrapolatedbasedonthehistoricaldataoflast15yearsforthevesselspublishedbyDrewrytakingthegrowthintheyear2003overtheyear2002asthebaseyear.

c. Budgetedstandingchargesandmanagementexpensesoftheyear2016-17areincreasedforeachyearfrom2017-18basedonthemanagement’sbestestimateofthelikelyincreaseinfuture.

NOTE – “44”TheagencyagreementwiththeagentatUAEportswasterminatedw.e.f.21.03.2015.TheCompanyhasinvokedrevolvingbankguaranteeofUSD1.6milliontorecoveroutstandingduesof`1115lakhsfromthesaidagent.However,theagenthasgotinjunctionthroughcourtonencashmentofbankguarantee.Thecompanyhasalreadysubmittedallthedocumentstoitsappointedlawyerstoenablethevacationoftheinjunction.Tilldate,14hearings/adjournmentshavetakenplace.Further,theCompanyisalsosimultaneouslypursuingthematterwiththeagentforreconciliationofaccountsandthebankhasconfirmeditsliabilitytohonourthebankguaranteeoncetheCourtinjunctionislifted.Sincethematterisstillsub-judiceintheCourtofFujairah,noprovisionismadeinthebooksonthisaccountason31.03.2016.NOTE – “45”TradePayables,TradeReceivables,Loans&AdvancesandDepositsaresubjecttoconfirmationandreconciliation.Duringtheyear,lettersforconfirmationofbalanceshavebeensenttovarioustradepayableandtradereceivablepartiesbytheCompanyandthesameareunderreconciliationwhereverreplieshavebeenreceived.Themanagement,however,doesnotexpectanymaterialchangesonreconciliation.NOTE – “46”Thecompanyhasmadeaprovisionof`900lakhsforselfleaseofstaffsandofficersfrom01/04/2011to31/03/2015onestimatedbasis,pendingfinalworkingandalsotherequirementtoenterintoindividualagreementsbetweenthecompanyandeachoftheeligibleemployeeswithretrospectiveeffect.NOTE – “47”CompanyhadreceivedaclaimofUSD39millionsinrespectofexplosionofcargocarriedonM.V.Amsterdambridge.OutofUSD39millions,USD18millionsiscoveredunderinsurance.InrespectofremainingUSD21millions,companyhasissuedsecuritybeinguncoveredportionofclaim.Companyhasagreedforthemediationtosettletheclaimandmanagementexpectssettlementofclaimwithininsurancecover.Pendingsettlement,theuncoveredclaimhasbeenshownascontingentliability.NOTE –“48” The consolidated financial statements are presented, to the extent possible, in the format as adopted by the Venturer company for itsstandalonefinancialstatements.Note – “49” Previousyear’sfigureshavebeenregrouped/restatedwherevernecessarytoconformtocurrentyear’sclassification.


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1. (a) ACCOUNTING CONVENTIONThe financial statements are prepared to comply in allmaterialaspectsunderthehistoricalcostconventionandinaccordancewithgenerallyacceptedaccountingprinciplesinIndia and themandatory Accounting Standards prescribedunderSection133of theCompaniesAct2013(‘Act’) readwithRule-7oftheCompanies(Accounts)Rules,2014,theprovisionsoftheActandcurrentpracticesprevailingwithintheShippingIndustriesinIndia.

(b) USE OF ESTIMATES The preparation of financial statements requires estimatesandassumptionsthataffect thereportedamountofassetsand liabilities,anddisclosureofcontingent liabilitiesat thatdateofthefinancialstatementsandtheresultofoperationsduring the reporting period. Although such estimates andassumptions are made on reasonable and prudent basistaking into account all available information, actual resultscoulddifferfromtheseestimatesandassumptionsandsuchdifferencesarerecognisedintheperiodinwhichresultsarecrystallised.

2. FIXED ASSETS a) Tangible AssetsFixedAssetsarestatedathistoricalcostnetofrecoverabletaxes less accumulated depreciation. Cost includesacquisitioncostanddirectlyattributablecostofbringingtheassets to itsworking condition for its intended use and incaseofvessels,acquisitioncostanddirectlyattributablecosttillcompletionofmaidenvoyage.

b) Intangible AssetsIntangible Assets are stated at cost of acquisition net ofrecoverable taxes lessaccumulatedamortisation.Thecostcomprises purchase price, borrowing costs and directlyattributablecostsofbringingtheassettoitsworkingconditionfortheintendeduse.

3. DEPRECIATION/ AMORTISATIONa) Depreciationonalltangibleassetsischargedon“StraightLineMethod”lessresidualvalueof5%asmentionedinScheduleIItotheCompaniesAct,2013.Residualvalueisthe5%oforiginalcost of the asset. However, in case of Tankers & OffshoreVessels, the company has adopted a useful life of 25 yearsbasedonthetechnicalparametersincludingdesignlifeandthepast record. Second hand vessels are depreciated over theirremainingusefullivesasdeterminedbytechnicalevaluationnotexceeding25yearsfromthedateoforiginalbuild.JointVenturecompanieshaveadoptedanestimatedeconomiclifeof40yearsforLNGvessels.TheLNGvessel’sresidualvalue,usefullifeanddepreciationmethodsarereviewedandadjustedifappropriate,ateachfinancialyear-endonaprospectivebasis

b) Intangible assets including software is amortised over theusefullifenotexceedingfiveyears.

c) Assets costing individually Rs. 5000/- and below are fullydepreciatedintheyearofaddition.

d) Leaseholdlandisamortisedovertheperiodoflease.

4. IMPAIRMENTThe carrying amounts of the Company’s assets are reviewedat eachBalanceSheet date todeterminewhether there is anyindication of impairment. If any such indication exists, theasset’srecoverableamountsareestimatedinordertodeterminethe extent of impairment loss, if any. An impairment loss isrecognisedwheneverthecarryingamountofanassetexceedsits recoverable amount. Recoverable amount is higher of anasset’snetsellingpriceanditsvalueinuse.Valueinuseisthepresentvalueofestimated futurecashflowsexpected toarisefromthecontinuinguseofanassetandfromitsdisposalattheendofitsusefullife.Forthepurposeofcomputingvalueinuseofbulkcarrier&tankervessels,therevenuesforthenext5yearshavebeenprojectedbasedonexternalevidencei.e,reportgivenbyDrewerywhichisareputedresearchandadvisoryorganisationforthemaritimesector. For the remaininguseful lifeof theasset, the revenueshavebeenextrapolatedbasedonthehistoricdataoflast15yearsfor similar vessels published by Drewery and represents themanagement’sbestestimateofthesetofeconomicconditionsthatwillexistovertheremainingusefullifeoftheasset.Incaseofcontainervessels,therevenueprojectionsforthenext2yearsarebasedonactual freightearned in thecurrentyear.Therevenueprojectionsforremainingusefullifeofthevesselarebasedonanaverageincreaseinfreightignoringabnormalfreightincreasesorsteepdeclines.In case of AHTSV’s & PSV’s, Revenue per day had beenconsidered based on current charter party contracts for thecharterperiod.Therevenues thereafterarebasedonanormalrateofincreaseevery3-10yearsdependingonthetype&sizeofthevessel.The impairment loss, if any, is recognised in theStatementofProfitandLoss in theperiod inwhich impairment takesplace.Wherean impairment losssubsequentlyreverses, thecarryingamountof theasset is increased to the revisedestimateof itsrecoverableamount,howeversubjecttotheincreasedcarryingamount not exceeding the carrying amount that would havebeen determined (net of amortisation or depreciation) had noimpairmentlossbeenrecognisedfortheassetinprioraccountingperiods.

5. RETIREMENT AND DISPOSAL OF ASSETS a) AssetswhichhavebeenretiredfromoperationsforeventualdisposalareexhibitedseparatelyintheNoteNo.10-TangibleAssetsunderthehead“Assetsheldfordisposal”.

b) Anticipated loss, if any, in the disposal of such assets isprovided in the accounts for the year inwhich these havebeenretiredfromactiveuse.Forthepurposeofdeterminingtheloss,thesalepriceisrecognised, ifcontractforsaleisconcluded.Inothercases,assessmentoftherealisablevalueis made on the basis of the prevailing market conditions.Losses on such assets are provided for after taking intoaccount the expenses such as customs duty, sales tax /valueaddedtax,etc.inconnectionwiththedisposal,aswellasestimatedexpensesinmaintainingtheasset,till itssale.



Wherever the exact amount under each item of expensesisnotknown,anassessment isdoneon thebestestimatebasis.

c) Profits on sale of assets are accounted for only uponcompletionofsalethereof.

6. MAJOR REPAIRS AND RENEWALS OF SHIPDry-dockexpenditureisrecognisedintheStatementofProfitandLosstotheextentofpercentagecompletion,basedontechnicalassessment.

7. BORROWING COSTSBorrowingcostsattributabletotheacquisitionorconstructionofaqualifyingassetarecapitalizedaspartofthecostofthatasset.Otherborrowingcostsarerecognizedasexpenseintheperiodinwhichtheseareincurred.

8. INVENTORIESa) Inventories are valued at cost as determined on ‘MovingAveragePrice’methodornetrealisablevalue,whichever islower,unlessotherwisestated.

b) Fueloilpurchasesareinitiallybookedasstock.Thevalueofyear-endstock isarrivedatafterchargingconsumptionon‘movingaverageprice”method.

c) Store/Sparesincludingpaints,etc.arechargedtorevenueasconsumedwhendeliveredtoships.

9. ACCOUNTING OF FOREIGN CURRENCY TRANSACTIONSa) AllforeigncurrencytransactionsforeachmontharerecordedattheclosingexchangerateofthesecondlastFridayoftheprecedingmonthpublishedonxe.comwebsite.

b) The foreign currency balances other than in US Dollarsappearing in the books of account at the period end aretranslatedintoUSDollarsattheclosingexchangerateofthesecondlastFridayofprecedingmonthpublishedonxe.comwebsite. Thereafter, the monetary assets and monetaryliabilitiesaswellastheLongTermLoansaretranslatedintorupeesatSBIMeanRateprevailingattheperiodend.

c) Exchange difference arising on repayment of liabilities andconversionof foreigncurrencyclosingbalancespertainingto long term loans for acquiring ships/ containers/ otherdepreciableassetsandassetunderconstructionisadjustedinthecarryingcostofrespectiveassets.

d) The exchange differences arising on translation of othermonetary assets and liabilities are recognised in theStatementofprofitandloss.

10. RECOGNITION OF REVENUE AND EXPENDITUREa) TheStatementofProfit&Lossreflects,i) The Earnings and Direct Operating Expenses (Voyagerelatedvariablecosts)inrespectofallFinishedVoyagesonaccrualbasis.

ii) StandingCharges(VesselrelatedFixedCosts)forallthevesselsfortheyearonaccrualbasis.

iii) IncomeandExpenditureinrespectofthecustomspenaltyclaims and container demurrage & detention incomewhichareaccountedforonpayment/realisation.

iv) Inrespectofslotsharingagreementwithothershipping

lines, the earnings and expenses are accounted for onaccrualbasisbasedoncompletedvoyagecycleduringtheyear.

v) In respect of time charter arrangements, income andexpensesarebookedonaccrualbasis.

vi) VesselDemurrageincomedueaspercontractualtermsisrecognisedafterdeductiononestimatedbasis,basedonpastexperienceofsettlements.

b) The criteria followed for the purpose of determining theFinishedVoyagesareasunder:(i) Passenger cum Cargo Vessels: - Disembarkation ofpassengersanddischargeofcargoshouldbecompletedonorbeforethelastdateoftheperiod.

(ii) Cargo Vessels (other than those serviced by Feederor Daughter Vessels): - Discharge of cargo should becompletedonorbeforethelastdateoftheperiod.

(iii)Cargo vessels serviced by Daughter vessels: - Theultimate discharge of cargo by all daughter vesselsshould be completed on or before the last date of theperiod.

(iv)Cargovesselsservicedbyfeedervessels:-Thedischargeof cargo at the transhipment port by themainline andown feeder vessels should be completed on or beforethelastdateoftheperiod.Transhipmentportisthepointofcommencementandcompletionofboththeservices.The completion of the mainline and feeder voyage isdeterminedindependentofeachother.

(v)CellularLinerService:-Oncompletionofroundvoyagec) Unfinished Voyages:Anyvoyage,whichdoesnotfulfiltheabovementionedcriteria,istreatedasanunfinishedvoyage.AmountreceivedonaccountoffreightearningandotherchargesinrespectofsuchvoyagesarecarriedforwardasUnfinishedVoyageEarnings.Directoperatingexpensesincurredforsuchvoyagesincludinghireandfreightforvesselschartered-inarecarried forwardasUnfinishedVoyageExpensesexceptincaseoftimecharter.

d) Allocation of Container Expenses:Expenses relating to container activities such as stevedoring,stuffing and destuffing, transportation, etc. are identified withtherelevantvoyageandclassifiedasdirectoperatingexpenses.Expenses such as container hire, kobi charges, ground rentand handling of empty containers, etc.,which are not directlyidentifiablewithanyparticularvoyageareallocatedtoallvoyagesonthebasisofunitdaysforeachvoyage.Thesumsoallocatedtounfinishedvoyages iscarriedforwardasUnfinishedVoyageExpenses.

11. EMPLOYEE BENEFITSa) All short- term employee benefits are recognized at theirundiscountedamountintheaccountingperiodinwhichtheyareincurred.

b) Employeebenefitsunderdefinedcontributionplanscomprisingof post- retirement medical benefits (w.e.f 01.01.2007) andpensioncontributionarerecognizedbasedontheundiscountedamountofobligationsofthecompanytocontributetotheplan.


140

Thecontributiontofundinthenatureofdefinedcontributionisa defined benefit plan due to the requirement of the employermakinggooddeficiency,ifany,intheinterestrateearnedvis-a-visstatutory rate.Thiscontribution is recognisedbasedon itsundiscountedamountandpaidtoafundadministeredthroughaseparatetrust.

c) Employee benefits under defined benefit plans comprising ofgratuity,leaveencashmentandpost-retirementmedicalbenefitsare recognized based on the present value of defined benefitobligation,whichiscomputedonthebasisofactuarialvaluation.ActuarialLiabilityinexcessoffairvalueofrespectiveplanassetsis recognized during the year. Actuarial gains and losses arerecognizedintheStatementofProfit&Lossduringtheperiodinwhichtheyoccur.

12. ADJUSTMENTS PERTAINING TO EARLIER YEARSIncome/ExpenditurerelatingtopriorperiodwhichdonotexceedRs.5lakhsineachcase,aretreatedasincome/expenditureofcurrentyear.

13. INSURANCE, P&I AND OTHER CLAIMSa) Provision in respect of claims against the Company andcoveredbyHullandP&Iinsuranceismadeasunder:-i) InrespectofcollisionclaimsandP&Iclaims(otherthancargoclaims),totheextentofdeductiblelimitbasedontheassessmentprovidedbythesurveyors.

ii) IncaseofCargoclaims,onthebasisoftheactualclaimsregistered and/or paid pertaining to the relevant year’svoyagesasascertainedattheperiodendasreducedbytheamountsrecoverablefromtheinsurers.

iii) Expenses on account of general average claims/damagestoshipsarechargedoffintheperiodinwhichthey are incurred. Claims against the underwriters areaccountedonsubmissionoftheAdjuster’sreporttotheunderwriters.

b) Claims made by the Company against other parties notcovered under insurance including ship repair yards,ship-owners, ship charterers, customs and others, etc.are accounted for on realisation, due to uncertainty in theamountsoftheirultimaterecovery.

14. INVESTMENTSa) Long Term Investments are stated at cost. Provision fordiminution is made to recognize a decline, other thantemporary,inthevalueofsuchinvestments.

b) CurrentInvestmentsarestatedatlowerofcostandfairvalue.

15. TAXES ON INCOMEProvision for income tax liability is made as per specialprovisionsrelating to incomeofshippingcompaniesunder theIncomeTaxAct,1961onthebasisofdeemedtonnageincomeof the Company. Provision for incometax on non- shippingincome ismade asper the provisionsof the Income-TaxAct1961.Minimumalternatetax(MAT)paidinaccordancewiththetaxlawsinpreviousyearshasbeenrecognisedasanassetandadjustedagainstprovision for incometax liabilityasandwhenthereisareasonablecertaintywhichgiverisetofutureeconomicbenefitsintheformoftaxcreditagainstfutureincometaxliability.IndiaLNGTransportCompany(No.1),(No.2)and(No.3)Limitedare registered under Tonnage tax regime inRepublic ofMalta.The Companies are exempt from income tax under MerchantShippingActinRepublicofMalta.

16. EARNINGS PER SHAREBasic andDiluted earnings per share is computed by dividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.

17. LEASESIn respectofassetsacquiredon leaseprior to1stApril2001,leaserentalsareaccountedonaccrualbasisovertheperiodoftheleaseandinrespectofassetsacquiredonorafter1stApril2001, lease rentals are accounted in accordance with AS-19“AccountingforLeases”.

18. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSProvisions involving substantial degree of estimation inmeasurementarerecognizedwhenthereisapresentobligationasaresultofpasteventsanditisprobablethattherewillbeanoutflowofresourcesembodyingeconomicbenefits.Contingent liability is a possible obligation arising from pasteventsandtheexistenceofwhichwillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontrolofthecompanyorapresentobligation that arises from past events but is not recognizedbecauseitisnotpossiblethatanoutflowofresourcesembodyingeconomic benefit will be required to settle the obligations orreliableestimateoftheamountoftheobligationscannotbemade.Thecompanydisclosestheexistenceofcontingentliabilitiesinfinancialstatements.ContingentAssetsareneither recognizednordisclosed in thefinancialstatements.



Aboard

Referringtocargobeingput,orladen,ontoameansofconveyance.

ActofGod

Anactbeyondhumancontrol,suchaslightning,floodorearthquake.

ATD

ActualTimeofDeparture.

AdValorem

Inproportiontothevalue:Aphraseappliedtocertainfreightorcustomsdutiesleviedongoods,property,etc.setasapercentageoftheirvalue.

AircraftContainer

Aunit loaddevice (ULD)which linksdirectlywith theairplanecargohandlingandrestraintsystem.

AframaxTanker

Avesselof70,000 to120,000DWTcapacity.The largest tankersize in theAFRA(averagefreightrateassessment)tankerratesystem.

Affreightment,Contractof

Anagreementbyanoceancarriertoprovidecargospaceonavesselataspecifiedtimeandforaspeci¬fiedpricetoaccommodateanexporterorimporter.

Aft

Movementtowardthestern(backend)ofaship.

AgencyTariff

Atariffpublishedbyanagentonbehalfofseveralcarriers.

Agent

Apersonauthorizedtotransactbusinessforandinthenameofanotherpersonorcompany. Types of agents are:(1) brokers,(2) commissionmerchants,(3) residentbuyers,(4)salesagents,(5)manufacturer’srepresentatives.

AFRA:AverageFreightRateAssessment

AFRAwascommissionedoriginallybyoneoftheoilmajorsasasophisticatedindicatoroffreightingvaluesforitsaffiliatedcompanies,AFRAresultshavebeenpublishedbytheLondonTankerBrokers’Panelcontinuouslysince1954.Theyareuniqueinbeingthe only assessments of their kind to be recognised by taxation authorities as anacceptablemethodofchargingfreightbetweenaffiliatedcompaniesofmulti-nationalgroups.AFRAresultsarealsousedbyoiltradersandgovernmentagenciestoassessthefreightelementinvarioustypesofoilsaleagreements.AFRAresultsarepublishedonthefirstbusinessdayofeachmonthandcoverfivedeadweightgroups:• Mediumrange-25,000-44,999(long)tonsdwt• Largerange1-45,000-79,999(long)tonsdwt• Largerange2-80,000-159,999(long)tonsdwt• VLCC-160,000-319,999(long)tonsdwt• ULCC-320,000-549,999(long)tonsdwt

Ineachofthefivegroups,tonnageisdividedintothreecategories:• Longtermcharters• Shorttermcharters• Singlevoyagecharters

AHTSV:AnchorHandling,Towing&SupplyVessel

AHTSV’saremainlybuilttohandleanchorsforoilrigs,towthemtolocation,anchorthemupand,inafewcases,serveasanEmergencyRescueandRecoveryVessel(ERRV).Theyarealsousedtotransportsuppliestoandfromoffshoredrillingrigs.

AllIn

Thetotalpricetomovecargofromorigintodestination,inclusiveofallcharges.

Alongside

Aphrasereferringtothesideofaship.Goodsdelivered“alongside”aretobeplacedonthedockorbargewithinreachofthetransportship’stacklesothattheycanbeloaded.

AllRisk

All Risks Coverage, a type of marine insurance, is the broadest kind of standard

coverage,butexcludesdamagecausedbywar,strikes,andriots.

Allotment

Atermusedtodescribeblockedspacebyairlinesonbehalfofforwarders/shippers.

Assignment

Atermcommonlyusedinconnectionwithabilloflading.Itinvolvesthetransferofrights,titleandinterestinordertoassigngoodsbyendorsingthebilloflading.

Astern

Behindavessel–Moveinareversedirection.

ATDNSHINC

AnytimeDayorNightSundays&HolidaysIncluded.Acharteringtermreferringtowhenavesselwillwork.

Athwartships

Adirectionacrossthewidthofavessel.

AutomatedIdentificationSystem(AIS)

It is a system used by ships and Vessel Traffic Service (VTS) principally for theidentification and the locating of vessels. AIS provides a means for ships toelectronically exchange ship data including: identification, position, course, andspeed,withothernearbyshipsandVTSstations.

BAF(BunkerAdjustmentFactor)

Anadjustmentinshippingchargestooffsetpricefluctuationsinthecostofbunkerfuel.

BillofLading(B/L)

Billsofladingarecontractsbetweentheownerofthegoodsandthecarrier.Therearetwotypes.Astraightbillofladingisnonnegotiable.Anegotiableorshipper’sorderbillofladingcanbebought,sold,ortradedwhilegoodsareintransitandisusedformanytypesoffinancingtransactions.Thecustomerusuallyneedstheoriginaloracopyasproofofownershiptotakepossessionofthegoods.

Barrel(BBL)

Atermofmeasurereferringto42gallonsofliquidat600degrees.

BalticDryIndex

TheBalticDryIndex(BDI)isanumber(inUSD)issueddailybytheLondon-basedBalticExchange.NotrestrictedtoBalticSeacountries,theindexprovides“anassessmentofthepriceofmovingthemajorrawmaterialsbysea.Takingin23shippingroutesmeasuredonatimecharterbasis,theindexcoversHandysize,Supramax,PanamaxandCapesizebulkcarrierscarryingarangeofcommoditiesincludingcoal,ironoreandgrain.

Beam

Thewidthofaship.

BIMCO

The Baltic and International Maritime Council, the world’s largest private shippingorganization.

BondedWarehouse

TheCustomsServiceauthorizesbondedwarehousesforstorageormanufactureofgoods onwhich payment of duties is deferred until the goods enter the CustomsTerritory.Thegoodsarenotsubjecttodutiesifre-shippedtoforeignpoints.

Bow

Thefrontofavessel.

BreakBulk(B/B)

For consolidated air freight, it ismoved under oneMAWB and each consignmentdesignated to specific consignee or recipient is under one HAWB. When freightforwarder receives the consolidated cargo from carrier, they will break theconsolidationapartperHAWBthenproceedcustomsclearancealongwithassociatedshippingandimportdocuments.SuchBreak-Bulkisnormallyhandledbyairlinesortheircontractedgroundhandlingagent.

BreakbulkVessel

Ageneralcargovesseldesignedtoefficientlyhandleun-containerisedcargo.Vesselsareusuallyself-sustaininginthattheyhavetheirownloadingandunloadingmachinery.

GLOSSARY

142

Bulker

A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed totransportunpackagedbulkcargo,suchasgrains,coal,andcement,initscargoholds.

Bunkering

The act or process of supplying a shipwith fuel. Bunker quality is highly variableacross theworld and LRprovides ship operators andmanagerswith independentvarificationoffuelquality.

Cabotage

Water transportation term applicable to shipments between ports of a nation;commonly refers to coastwise or intercoastal navigation or trade. Many nations,includingtheUnitedStates,havecabotagelawswhichrequirenationalflagvesselstoprovidedomesticinterportservice.

CAF(CurrencyAdjustmentFactor)

Afreightsurchargeoradjustmentfactorimposedbyaninternationalcarriertooffsetforeign currency fluctuations. In some cases an emergency currency adjustmentfactor(ECAF)maybeappliedwhenachargeorratehasbeenoriginallypublishedinacurrencythatisexperiencingsustainedorrapiddecline.TheCAFischargedasapercentageofthefreight.

CapesizeVessel

Adrybulkvesselabove80,000dwtorwhosebeamprecludespassageviathePanamaCanalandthusforcesthemtopassaroundCapeHornortheCapeofGoodHope.

CleanBillofLading

Areceiptforgoodsissuedbyacarrierwithanindicationthatthegoodswerereceivedinapparentgoodorderandcondition,withoutdamagesorotherirregularities.

Classification

The development, implementation an maintenance of standards (Rules) for thedesign,constructionandoperationofshipsandoffshoreunits.Compliancewiththesestandardsensuresassignmentandmaintenanceofclass.

ClassificationSociety

Anorganizationmaintainedforthesurveyingandclassingofshipssothatinsuranceunderwritersandothersmayknowthequalityandconditionofthevesselsofferedforinsuranceoremployment.

CommercialInvoice

Thecommercial invoice is a bill for the goods from the seller to thebuyer. Theseinvoicesareoftenusedbygovernmentstodeterminethetruevalueofgoodsfortheassessmentofcustomsdutiesandarealsousedtoprepareconsulardocumentation.Governmentsusingthecommercialinvoicetocontrolimportsoftenspecifyitsform,content,numberofcopies,languagetobeused,andothercharacteristics.

Consignee

Thepersonorfirmnamedinafreightcontracttowhomgoodshavebeenconsignedorturnedover.Forexportcontrolpurposes,thedocumentationdifferentiatesbetweenanintermediateconsigneeandanultimateconsignee.

Consignment

Deliveryofmerchandisefromanexporter(theconsignor)toanagent(theconsignee)underagreementthattheagentsellthemerchandisefortheaccountoftheexporter.Theconsignorretainstitletothegoodsuntilsold.Theconsigneesellsthegoodsforcommissionandremitsthenetproceedstotheconsignor.

Consolidation

In order to handle small lot of consignment efficiently and competitively, freightforwarder usually put many consignments into one lot then tender to carrierfor forwarding. In this case, each consignment will be shipped with one HAWBrespectivelyandallofthemwillbeunderonemasterAWB.

Container

Atrucktrailerbodythatcanbedetachedfromthechassisforloadingintoavessel,a rail carorstacked inacontainerdepot.Containersmaybeventilated, insulated,refrigerated, flat rack, vehicle rack, open top, bulk liquid or equippedwith interiordevices.Acontainermaybe20feet,40feet,45feet,48feetor53feetinlength,8’0”or8’6”inwidth,and8’6”or9’6”inheight.

CostandFreight(C&F)

CostandFreight(CFR)toanamedoverseasportofimport.Underthisterm,thesellerquotesapriceforthegoodsthatincludesthecostoftransportationtothenamedpointofdebarkation.Thecostofinsuranceislefttothebuyer’saccount.(Typicallyusedforoceanshipmentsonly.CPT,orcarriagepaidto, isatermusedforshipmentbymodesotherthanwater.)Also,amethodofimportvaluationthatincludesinsuranceandfreightchargeswiththemerchandisevalues.

Cost,InsuranceandFreight(CIF)

Cost, insurance, and freight (CIF) to a namedoverseasport of import.Under thisterm,thesellerquotesapriceforthegoods(includinginsurance),alltransportation,andmiscellaneouschargestothepointofdebarkationforthevessel.(Typicallyusedforoceanshipmentsonly.CIP,orcarriageandinsurancepaidto,isatermusedforshipmentbymodesotherthanwater.)

DangerousGoods

CommoditiesclassifiedbyIATAaccordingtoitsnatureandcharacteristicintermsoftheeffectofitsdangertocarrier’sflyingsafety.

*DeadweightTonnage(DWT)

Themaximumweightofcargoandstoresthatashipcancarry.

DeadweightTonnage(DWT)

Thenumberoftonsof2,240poundsthatavesselcantransportofcargo,storesandbunkerfuel.Itisthedifferencebetweenthenumberoftonsofwateravesseldisplaces“light”and thenumberof tons itdisplaceswhensubmerged to the“load line.”Anapproximateconversionratiois1NT=1.7GTand1GT=1.5DWT.

Demurrage

Apenaltychargeagainstshippersorconsigneesfordelayingthecarrier’sequipmentorvesselbeyondtheallowedfreetime.Thefreetimeanddemurragechargesaresetforthinthecharterpartyorfreighttariff.

Despatch

Anincentivepaymentpaidbythevessel tothechartererfor loadingandunloadingthecargo faster thanagreed.Usuallynegotiatedonly incharterparties.Alsocalled“dispatch.”

DirectorateGeneralofShipping(DGS)

The roleof IndianMaritimeAdministrationhasbeenwellbroughtout in the IndianMerchantShipping1958. TheMerchantShippingAct is the legislation in India formaritime development and effective enforcement of standards. The DirectorateGeneralofShippingastheexecutivearmfullyadministersthislegislation.

DimensionalWeight

Alsocalledmeasurementweight.Thisisthesizeofconsignmentcalculatedbytotalsquarefeetby6000.Carrierchargeforfreightbasedonthedimensionalweightoractualgrossweightwhicheverishigher.

DirectShip

ShipwithoutconsolidationandunderoneMAWBienon-consolidation.

D.O.E:DirectOperatingExpenses:

DirectOperatingExpensesarevoyagerelatedexpenses.Wheneveravesselundertakesavoyage,steamingfromoneporttoanotherport,expensesincurredsuchasBunker(fuel),PortDues,Freshwater,stevedoringCharges,AgencyfeesandothervoyagerelatedexpensesarecalledDirectOperatingExpenses.• G.O.P.(GrossOperatingProfit)• G.O.P.=Earnings/(Freight)–D.O.E• N.O.P.(NetOperatingProfit)=G.O.P.–I.O.E.

EDI

EDI,ElectronicDataInterchangeforAdministration,Commerce,andTransportation,isaninternationalsyntaxusedintheinterchangeofelectronicdata.CustomsusesEDItointerchangedatawiththeimportingtradecommunity.

ETA

EstimatedTimeofArrival.Then,Itnormallytakes3hoursforcarrierstoBreakBulkthenreadytobepickedupbyforwardersalongwithcustomsreleasenotification.

ETD

EstimatedTimeofDeparture.Thecut-off time forcarriers’cargo ramphandling isnormallytwohoursaheadofETD.However,thefreightforwarders’consolidationcut-

GLOSSARY


offtimemayvarydependingoneachforwarder’soperationsrespectively.

FCLorCY

FullContainerLoad,alsoknownasCY.CYistheabbreviationofContainerYard.WhenthetermCYtoCY,itmeansfullcontainerloadallthewayfromorigintodestination.

FederalMaritimeCommission

TheFMCisanindependentagencywhichregulatesoceanbornetransportationintheforeigncommerceandinthedomesticoffshoretradeoftheUnitedStates.

FlatRackContainers

Especiallyforheavyloadsandover-dimensionalcargo.Containersdonothavesidesoratop.Thisallowseasyfork-liftandcraneaccess.

ForeandAft

Thedirectiononavesselparalleltothecenterline.

Forty-FootEquivalentUnit(FEU)

FEUisameasureofaship’scargo-carryingcapacity.OneFEUmeasuresfortyfeetbyeightfeetbyeightfeet--thedimensionsofastandardforty-footcontainer.AnFEUequalstwoTEUs.

FreeAlongsideShip

FreeAlongsideShip,FAS,atanamedportofexport.UnderFAS, thesellerquotesa price for the goods that includes charges for delivery of the goods alongside avesselattheportofdeparture.Thesellerhandlesthecostofunloadingandwharfage;loading, ocean transportation, and insurance are left to the buyer. FAS is also amethodofexportandimportvaluation.

FreeCarrier(FCA)

FreeCarrier,FCA,toanamedplace.Thistermreplacestheformer“FOBnamedinlandport”todesignatetheseller’sresponsibilityforthecostofloadinggoodsatthenamedshippingpoint.Itmaybeusedformultimodaltransport,containerstations,andanymodeoftransport,includingair.

FreeOnBoard(FOB)

Commonpricetermusedininternationaltrademeaningseller’sresponsibleforthecostofgoodsistothepointofloadingittothevesseldeckoraircraftloadingdeck.Theriskoflossofordamagetothegoodsistransferredfromthesellertothebuyerwhenthegoodshavebeensodelivered.FOBnormallycomeswithportof loadingeitherairportorseaport.

FreightCarriage...andInsurancepaidto

Thistermisthesameas“Freight/CarriagePaidto...”butwiththeadditionthatthesellerhas toprocure transport insuranceagainst the riskof lossofdamage to thegoodsduringthecarriage.Thesellercontractswiththeinsurerandpaystheinsurancepremium.

FreightCarriage...paidto

LikeC&F,“Freight/Carriagepaidto...”meansthatthesellerpaysthefreightforthecarriageofthegoodstothenameddestination.However,theriskoflossofordamagetothegoods,aswellasofanycost increases, istransferredfromthesellertothebuyerwhen thegoodshavebeendelivered into thecustodyof thefirstcarrierandnotattheship’srail.Thetermcanbeusedforallmodesoftransportincludingmulti-modaloperationsandcontaineror“rollon-rolloff”trafficbytrailerandferries.Whenthesellerhastofurnishabilloflading,waybillorcarrier’sreceipt,hedulyfulfillsthisobligationbypresentingsuchadocumentissuedbythepersonwithwhomhehascontractedforcarriagetothenameddestination.(Alsoseeincoterms)

FreightForwarder

Anindependentbusinesswhichhandlesexportshipmentsforcompensation.Attherequestof theshipper, the forwardermakes theactualarrangementsandprovidesthenecessaryservicesforexpeditingtheshipmentto itsoverseasdestination.Theforwardertakescareofalldocumentationneededtomovetheshipmentfromorigintodestination,makingupandassemblingthenecessarydocumentationforsubmissionto the bank in the exporter’s name. The forwarder arranges for cargo insurance,makesthenecessaryoverseascommunications,andadvisestheshipperonoverseasrequirementsofmarkingandlabeling.

FreightforAllKinds(FAK)

FAK is a shipping classification. Goods classified FAK are usually charged higherratesthanthosemarkedwithaspecificclassificationandarefrequentlyinacontainer

whichincludesvariousclassesofcargo.

*GrossTonnage(GT)

Grosstonnageisafunctionofthemouldedvolumeofallenclosedspacesoftheship.It forms thabasisonwhichmanning rulesandsafety regulationsareapplied,andregistrationfeesdetermined.

GrossTonnage(GT)

Appliestovessels,nottocargo,(0.2+0.02log10V)whereVisthevolumeincubicmeters of all en¬closed spaces on the vessel. Since 1994, it replaces “GrossRegisteredTonnage.”Anapproximateconversionratiois1NT=1.7GTand1GT=1.5DWT.

Handysize

Mostusuallyreferstoadrybulkvesselwithdeadweightofupto50,000tonnes.Thisallowstheshipstoentersmallerportstopickupcargoes.Vesselsofdeadweightofabove35,000tonnesarereferredtoasHandymaxbulkers(typically35,000-50,000tonsdeadweight).

HandymaxandSupramaxarenavalarchitecturetermsforabulkcarrier,inaseriesthat is called Handysize class. Handysize class consists of Supramax (50,000 to60,000 DWT), Handymax (40,000 to 50,000 DWT), and Handy (<40,000DWT).Theshipsareusedforlessvoluminouscargos,evenallowingforcombiningdifferentcargosindifferentholds.

I.M.D.G.Code

InternationalMaritimeDangerousGoodsCode.TheregulationspublishedbytheIMOfortransport¬inghazardousmaterialsinternationally.

Incoterms

Maintained by the International Chamber of Commerce (ICC), this codification oftermsisusedinforeigntradecontractstodefinewhichpartiesincurthecostsandatwhatspecificpointthecostsareincurred.(alsoseeincotermsection)

I.O.E:IndirectOperatingExpenses

IndirectOperatingExpensesarethoseexpensesincurredbytheownerofthevesseltowardsandincludesmaintenance,stores,spares,repairs,insurance,victuallingandothermanagementoverheads.

IndianRegisterofShipping(IRS)

The IndianRegisterofShipping (IRS) isan internationally recognized, independentshipclassificationsocietywhichwasfoundedinIndiain1975.In1991,theIRSwasadmittedasanAssociateMemberof the InternationalAssociationofClassificationSocieties(IACS)which is themajor internationalbodyofclassificationsocieties. ItismanagedbyaCommitteeofManagementwhichhas representatives fromeachof the industrysegments thatuse itsservices.These include representatives fromthe maritime industries, underwriters, general engineering, government agenciesanddefenseservices.Theyare further supportedbysub-committeessuchas theTechnicalCommittee, theClassificationSub-committee, theQualitySub-committeeandtheResearchAdvisorySub-committeeforalloperationalaspectsofIRSwhichcovermarine,offshoreandindustrialservices.

IntermediateConsignee

An intermediate consignee is the bank, forwarding agent, or other intermediary (ifany)thatactsinaforeigncountryasanagentfortheexporter,thepurchaser,ortheultimateconsignee,forthepurposeofeffectingdeliveryoftheexporttotheultimateconsignee.

Intermodal

Movementofgoodsbymorethanonemodeoftransport,ie.airplane,truck,railroadandship.

InternationalAssociationofClassificationSocieties(IACS)

Amembershiporganisationthatcontributestomaritimesafetyandregulationthroughtechnicalsupport,complianceverificationandresearchanddevelopment.Morethan90%oftheworld’scargo-carryingtonnageiscoveredbytheclassificationrulesandstandardssetbythe13membersocietiesofIACS.

InternationalMaritimeOrganisation(IMO)

ThespecialisedagencyoftheUnitedNationswithresponsibilityforsafetyandsecurityatseaandthepreventionofmarinepollutionfromships.Establishedin1948,IMOfirstmetin1959andistheonlyUnitedNationsagencywithitsheadquartersinLondon.

GLOSSARY

144

InternationalShipandPortSecurityCode(ISPS)

ItisanamendmenttotheSafetyofLifeatSea(SOLAS)Convention(1974/1988)onminimumsecurityarrangementsforships,portsandgovernmentagencies.Havingcome into force in 2004, it prescribes responsibilities to governments, shippingcompanies, shipboard personnel, and port/facility personnel to “detect securitythreatsandtakepreventativemeasuresagainstsecurityincidentsaffectingshipsorportfacilitiesusedininternationaltrade.”

IrrevocableLetterofCredit

A letterofcredit inwhich thespecifiedpayment isguaranteedby the issuingbankifalltermsandconditionsaremetbythedrawee.Itisasgoodastheissuingbank.

ISO(InternationOrganizationforStandardization)

An independent, non-governmental standard-setting body composed ofrepresentatives from 165 national standards organisations. International standardsgiveworld-classspecirficationsforproducts,servicesandsystemstoensurequality,safetyandefficiency.Theyareinstrumentalinfacilitatinginternationaltrade.

ISO9001

Theinternationalmanagementsystemsstandardconcernedwithqualitymanagement–whatanorganisationdoestoensurecustomerneedandexpectationsandapplicableregulatoryrequirements,andcontinuallytoimproveitsqualityperformance.

Kamsarmax

AKamsarmaxtypebulkcarrierisbasicallya82,000dwtPanamaxwithanincreasedLOA=229m(forPortKamsarinEquatorialGuinea).

LCL

LessthanContainerLoad,consolidatedcontainerload.

LDT(LightDisplacementTonnage)

LightDisplacementTon(Tonnage).ItisalsocalledDisplacementLightWeightofthevesselwithoutstores,bunker, freshwater,cargoandpassengers.Usuallyusedforvesselsforscrapping.

*LNG(LiquefiedNaturalGas)

Naturalgaschangestoaliquidat–162C,creatingLNG.Whenliquefied,thegasisreducedto1/600thofitsoriginalvolumemakingiteconomictotransportinspeciallydesigned

LNG(LiquefiedNaturalGas)

Natural gas will liquefy at a temperature of approximately -259 F or -160 C atatmosphericpressure.Onecubicfootof liquefiedgaswillexpandtoapproximately600cubicfeetofgasatatmosphericpressure.

LNGC

(LNGCarrier)Anocean-goingshipspeciallyconstructedtocarryLNGintanksat-160C.CurrentaveragecarryingcapacityofLNGsis125,000cubicmetres.ManyLNGCspresentlyunderconstructionoronorderareinthe210,000–215,000cubicmetrerange.

Liquefiedpetroleumgas(LPG)

Not to be confused with LNG, LPG is often called ‘propane’ as it is made ofvariousmixtures of propane and other similar types of hydrocarbon gases. Thesehydrocarbons are gases at rooms temperature, but turn to liquid when they arecompressed.LPGisstoredinspecialtanksthatkeepitunderpressure,soitstaysaliquid.WhilethedistributionofLNGrequiresheavyinfrastructureinvestments,LPGismoreeasilytransported.

LoadLine

Thewaterlinecorrespondingtothemaximumdrafttowhichavesselispermittedtoload,eitherbyfreeboardregulations,theconditionsofclassification,ortheconditionsofservice.

LR1 : Long Range 1, mostly refers to the product tanker with DWT in the rangebetween55000to79999tons.

LR2 : Long Range 2, mostly refers to the product tanker with DWT in the rangebetween80000-159999tons.

MarineCargoInsurance

Broadly, insurancecovering lossof,ordamageto,goodsatsea.Marine insurancetypicallycompensatestheownerofmerchandiseforlossesinexcessofthosewhich

can be legally recovered from the carrier that are sustained from fire, shipwreck,piracy, and various other causes. Three of the most common types of marineinsurancecoverageare“freeofparticularaverage”(f.p.a.),“withaverage”(w.a.),and“AllRisksCoverage.”

MaritimeLabourConvention

TheinternationalLabourOrganization’sConvention,knownas‘MLC,2006’cameintoforceinAugust2013,effectivelybecomingbindingininternationallaw.Itiscurrentlyratifiedby56ILOmemberstatesresponsibleforregulatingconditionsforseafarersonmorethan80%oftheworld’sgrosstonnageofships.Itestablishesminimumworkingandlivingstandardsonthoseships.

MR:MediumRangeTanker,mostlyreferstotheproducttankerwithDWTintherangebetween25000-54999tons.

NetTonnage(NT)

The replacement, since 1994, for “Net Register Tonnage.” Theoretically the cargocapacityoftheship.Sometimesusedtochargefeesortaxesonavessel.Theformulais(0.2+0.02log10(Vc))Vc(4d/3D)2,whereVcisthevolumeofcargoholds,Disthedistancebetweenship’sbottomandtheuppermostdeck,disthedraught)“Ton”isfiguredasa100cubicfootton.Anapproximateconversionratiois1NT=1.7GTand1GT=1.5DWT.

Non–VesselOperatingCommonCarrier(NVOCC)

Acargoconsolidator inocean tradeswhowill buyspace fromacarrierandsub–sellittosmallership¬pers.TheNVOCCissuesbillsoflading,publishestariffsandotherwiseconductsitselfasanoceancommoncarrier,exceptthatitwillnotprovidetheactualoceanorintermodalservice.

O.E.C.D.

OrganizationofEconomicCooperationandDevelopment,headquarteredinPariswithmembershipconsistingoftheworld’sdevelopednations.

OnBoard

Anotationonabillof lading thatcargohasbeen loadedonboardavessel.Usedto satisfy the require¬ments of a letter of credit, in the absence of an expressrequirementtothecontrary.

OnDeck

Anotationonabillofladingthatthecargohasbeenstowedontheopendeckoftheship.

P&I

Abbreviationfor“ProtectionandIndemnity,”aninsuranceterm.

PanamaxVessel

The largest size vessel that can traverse the Panama Canal. Current maximumdimensionsare:Length294.1meters(965feet);width32.3meters(106feet);draft12.0meters(39.5feet)intropicalfreshwater;height57.91meters(190feet)abovethewater.

POD

ProofOfDelivery,oracargo/packagereceiptwiththesignatureofrecipient.Thistermhasbeenwidelyusedincourierandexpressindustryandalsogainingmoreattentionandimplementationataircargoindustry..

PackingList

Ashippingdocument issuedbyshipper tocarrier,Customsandconsigneeservingthe purposes of identifying detail information of package count, products count,measurementofeachpackage,weightofeachpackage,etc.

Port

–Harborwithpiersordocks.

–Leftsideofashipwhenfacingforward.

Portstatecontrol

Theinspectionofforeignshipsinnationalportstoverifythattheconditionoftheshipand itsequipmentcomplieswith the requirementsof internationalconventionsandthattheshipismannedandoperatedincompliancewiththeserules.

ProFormaInvoice

An invoiceprovidedbyasupplierprior to theshipmentofmerchandise, informingthebuyerofthekindsandquantitiesofgoodstobesent,theirvalue,andimportant

GLOSSARY


specifications(weight,size,andsimilarcharacteristics).WhenanimporterappliesforLetterofCreditasthemeansofpayment,aProFormaInvoicefromthebeneficiaryofsuchLetterofCredit,usuallytheexporter,isrequiredbytheL/Cissuingbank.

ProjectCargo

Thisisatermnormalreferredtowhenshippingcargoairorsea,whichdoesnotfallwithin standardmethods. Ie over-height, or oversize cargowhich requires specialequipmentandhandle.

PSV

APlatformsupplyvessel(oftenabbreviatedasPSV)isashipspeciallydesignedtosupply offshoreoil platforms. These ships range from20 to100meters in lengthandaccomplishavarietyoftasks.Theprimaryfunctionformostofthesevesselsistransportationofgoodsandpersonneltoandfromoffshoreoilplatformsandotheroffshorestructures

Roll-on,Roll-off(RORO)

Atypeofshipdesignedtoloadanddischargecargowhichrollsonwheelsortracks.

ShippingMark

The letters, numbers or other symbols placedon the outside of cargo to facilitateidentification.

ShippingWeight

Shippingweight represents the grossweight in kilograms of shipments, includingtheweightofmoisturecontent,wrappings,crates,boxes,andcontainers(otherthancargovansandsimilarsubstantialoutercontainers).

Starboard

Therightsideofashipwhenfacingthebow.

Stern

Theendofavessel.Oppositeofbow.

Stevedore

Individualorfirmthatemploys longshoremenandwhocontracts to loadorunloadtheship.

SuezmaxTanker

Suezmax is a naval architecture term for the largest ship measurements capable oftransitingtheSuezcanalinaladencondition,andisalmostexclusivelyusedinreferencetotankers.Sincethecanalhasnolocks,theonlyseriouslimitingfactorsaredraft(maximumdepthbelowwaterline)andheightduetotheSuezCanalBridge.Thecurrentchanneldepthofthecanalallowsforamaximumof20.1m(66ft)ofdraft.ThetypicaldeadweightofaSuezmaxshipisabout160,000tons.

Supramax

Bulkcarrierswithacapacitybetween50,000and60,000dwt.These ‘bulkers’arewell suited for small ports with length and draught restrictions, or ports lacking

transshipmentinfrastructure.

TareWeight

TheweightofaULDandtiedownmaterialswithouttheweightofthegoodsitcontains.

ThroughBillofLading

Asinglebillofladingcoveringreceiptofthecargoatthepointoforiginfordeliverytotheultimateconsignee,usingtwoormoremodesoftransportation.

TimeCharter(TC)

Atimecharter is thehiringofavesselforaspecificperiodof time;theownerstillmanagesthevesselbutthechartererselectstheportsanddirectsthevesselwheretogo.Thechartererpaysforallfuelthevesselconsumes,portcharges,commissions,andadailyhiretotheownerofthevessel.

Transshipment

Transshipmentreferstotheactofsendinganexportedproductthroughanintermediatecountrybeforeroutingittothecountryintendedtobeitsfinaldestination.

*Twenty-FootEquivalentUnit(TEU)

Themeasureusedforcontainercapacity,a teu isavolumemeasurementequal toonestandard20ft(length6.1meter;approximately39cubicmeters)container.

Twenty-FootEquivalentUnit(TEU)

TEUisameasureofaship’scargo-carryingcapacity.OneTEUmeasurestwentyfeetbyeightfeetbyeightfeet--thedimensionsofastandardtwenty-footcontainer.AnFEUequalstwoTEUs.

UltimateConsignee

Theultimateconsigneeisthepersonlocatedabroadwhoisthetruepartyininterest,receivingtheexportforthedesignatedend-use.

ULCC

UltraLargeCrudeCarrier.Atankerinexcessof320,000dwt.

VLCC

VeryLargeCrudeCarrier.Atankerof200,000to319,000dwt.Itcancarryabout2millionbarrelsofcrudeoil.

Wharfage

Achargeassessedbyapierordockownerforhandlingincomingoroutgoingcargo.

Worldscale

Worldscaleisaunifiedsystemofestablishingpaymentoffreightrateforagivenoiltanker’s cargo.Worldscalewas established in November 1952 by London TankerBrokers’PanelontherequestofBritishPetroleumandShellasanaveragetotalcostofshippingoil fromoneport toanotherbyship.A largetablewascreatedfor thispurpose.

GLOSSARY

148

FORM MGT-11

PROXY FORM66thANNUALGENERALMEETINGON26thSepetember2016

[Pursuanttosection105(6)oftheCompaniesAct,2013andrule19(3)oftheCompanies(ManagementandAdministration)Rules,2014]

Nameofthemember(s):

Registeredaddress:

E-mailID: FolioNo./ClientID: DPID:

I/We,beingthemember(s)of_____________sharesofTheShippingCorporationofIndiaLtd.,herebyappoint:

1) Name: Address:

EmailID: Signature: orfailinghim

2) Name: Address:

EmailID: Signature: orfailinghim

3) Name: Address:

EmailID: Signature: orfailinghimAsmy/ourproxytoattendandvote(onapoll)forme/usandonmy/ourbehalfatthe66thAnnualGeneralMeetingofthecompany,tobeheldonthe26thdayofSeptember,2016at1530hrs.attheRegisteredOfficeoftheCompanyandatanyadjournmentthereofinrespectofsuchresolutionsasareindicatedbelow:

Resolution No. Description For * Against *

Ordinary Business

1. AdoptionofStandaloneandConsolidatedFinancialStatementsfortheyearended31.03.2016

2. Re-appointmentofCapt.K.Devadas,whoretiresbyrotation

3. Re-appointmentofSmt.H.K.Joshi,whoretiresbyrotation

4. Fixationofremunerationofstatutoryauditors

Special Business

5. AppointmentofShriS.V.KherasWholeTimeDirector

6. AppointmentofShriArunBalakrishnanasDirector

7. AppointmentofShriSukamalChandraBasuasDirector

Signedthis_____________dayof______2016,Signatureofshareholder______________________________,

SignatureofProxyholder______________________________

Notes:

(1) ThisformofproxyinordertobeeffectiveshouldbedulycompletedanddepositedattheRegisteredOfficeoftheCompany,notlessthan48hoursbeforethecommencementofthemeeting.

(2) AProxyneednotbeamemberoftheCompany.

(3) FortheResolutions,ExplanatoryStatementandNotes,pleaserefertotheNoticeofthe66thAnnualGeneralMeeting.

(4) PursuanttotheprovisionsofSection105oftheCompaniesAct,2013readwithrule19oftheCompanies(ManagementandAdministration)Rules,2014,apersoncanactasaproxyonbehalfofmembersnotexceedingfiftyandholdingintheaggregatenotmorethan10%ofthetotalsharecapitaloftheCompanycarryingvotingrights.Amemberholdingmorethan10%ofthetotalsharecapitaloftheCompanycarryingvotingrightsmayappointasinglepersonasproxyandsuchpersonshallnotactasaproxyforanyotherpersonorshareholder.

*(5)Itisoptionaltoput‘X’intheappropriatecolumnagainsttheresolutionsindicatedintheBox.Ifyouleavethe‘For’or‘Against’columnblankagainstanyorallresolutions,yourproxywillbeentitledtovoteinthemannerashe/shethinksappropriate.

(6) Appointingaproxydoesnotpreventamemberfromattendingthemeetinginpersonifhesowishes.

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