(A) Sethusamudram Corporation Ltd. (SCL), a Special Purpose Vehicle was incorporated on 06.12.2004 for developing the Sethusamudram Channel Project with Tuticorin Port Trust, Ennore Port Ltd, Visakhapatnam Port trust, Chennai Port Trust, Dredging Corporation of India Ltd., Shipping Corporation of India Ltd. and Paradip Port Trust as the shareholders. SCI participated with an investment of Rs 5000 lakhs (previous year Rs 5000 lakhs). The dredging work is suspended from 17.09.2009 consequent upon the direction of the Hon’ble Supreme Court of India. As there is no progress in the project since then, the Management had provided for diminution towards the investment in FY 2012-13 .

(B) India LNG Transport Companies No. 1 & 2 Ltd. are two joint venture companies promoted by the Corporation and three Japanese companies Viz. M/S Mitsui O.S.K.lines Ltd. (MOL), M/S Nippon Yusen Kabushiki Kaisha Ltd (NYK Lines) and M/S Kawasaki Kisen Kaisha Ltd (K Line) along with M/S Qatar Shipping Company ( Q Ship), Qatar. SCI and MOL are the largest shareholders, each holding 29.08% shares while NYK Line 17.89%, K Line 8.95% & Q Ship holds 15% respectively. The Shares held by the Corporation and other partners in the two joint venture Companies have been pledged against loans provided by lender banks to these companies. India LNG Transport Company No.1 Ltd owns and operates one LNG Carrier Disha and India LNG Transport Company No. 2 Ltd owns and operates one LNG Carrier Raahi (Refer Note -34).

(C) India LNG Transport Company No. 3 Ltd. is the 3rd joint venture company which owns and operates one LNG Carrier Aseem. The company is promoted by the Corporation and three Japanese partners viz. MOL, NYK Lines, K Line along with M/S Qatar Gas Transport Company (QGTC), Qatar and M/s Petronet LNG Limited (PLL), India who are the other partners. SCI and MOL are the largest shareholders with 26% share each, while NYK, K Line, QGTC and PLL hold 16.67%, 8.33%, 20% and 3% respectively. The Shares held by the Corporation and other partners in the joint venture company have been pledged against loans provided by lender banks to this company (Refer Note -34).

(D) India LNG Transport Company (No. 4) Pvt. Ltd. is the 4th Joint Venture Company is promoted by the Corporation and three Japanese partners viz NYK, MOL and K Line along with PLL, India. SCI, NYK and PLL are the largest shareholders with 26% share each, while MOL and Kline hold 15.67% and 6.33% respectively. The Shares held by the Corporation and other partners in the joint venture company have been pledged against loans provided by lender banks to this company. India LNG Transport Company (No. 4) Pvt. Ltd owns and operates one LNG Carrier Prachi (Refer Note -34).

(E) Inland & Coastal Shipping Ltd is 100 percent Subsidiary.

(F) SCI Bharat IFSC Limited is 100 percent Subsidiary.

*As a prudent practice, the Company is taking Goods and Service Tax Credit in the Electronic Credit Ledger upon payment of the liabilities. Hence, there is a difference in the amount of credit appearing in books of accounts and the Electronic Credit Ledger of the respective states. Therefore, the balance in Input Tax Credit ledgers will be progressively reviewed and availed for discharge of Goods and Service Tax liability payable by the Corporation.

** This pertains to India Myanmmar Service started on 02.10. 2014 on the directions of Ministry of Shipping. The service was completed on Nov 2016.

# On 10th August 2020, Ministry of Shipping had sanctioned a subsidy of Rs. 21.10 crores as assistance for running cargo shipping service between India and Maldives. The Male service was flagged off on 21st September 2020. The net expenditure incurred (Expenses less Income earned) pertaining to this service is booked against the Subsidy for Maldives Service. Further subsidy of Rs.18.16 crores was received in F.Y. 2023-24 and Rs. 34.71 crores received in F.Y.2024-25 to continue running cargo shipping service between India and Maldives. The balance amount is placed in Fixed Deposit and Interest earned against such deposit are remitted to the Consolidated Fund of India.

@ As per directions of MoPSW, SCI has provided assistance to the TNMB for commencement of International Passenger ferry service between Nagapattinam, India and Kankesanthurai, Sri Lanka. SCI coordinated with all stake holders for successful completion of HSC Cheriyapani voyages between Nagapattinam and Kankesanthurai. The expenses incurred for operating ferry services are reimbursable to SCI. The reimbursable amount is approved by Finance division of MEA.

d) For the period of five years immediately preceding the date as at which the Balance Sheet is prepared, no shares have been issued for consideration other than cash, no shares have been issued as bonus shares & no shares have been bought back.

e) Rights / Preference / Restriction attached to Equity Shares:

The Company has only one class of Equity shares having par value of Rs. 10. Each shareholder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive the remaining assets of the company after distribution of all preferential allotment in proportion to their shareholding. The dividend whenever proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

f) The Company does not have holding company.

g) There are no shares reserved for issue under option and contract/ commitment for the sale of shares/ disinvestment.

Nature and Purpose of other reserves

Capital Reserve: The amount of sales proceeds in excess of original cost of ships sold by the Company. This is not available for distribution of dividend but can be utilised for issuing bonus shares.

Securities Premium: The amount received in excess of face value of the equity shares is recognised in Share Premium Reserve. This is not available for distribution of dividend but can be utilised for issuing bonus shares.

General Reserve: General Reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Tonnage Tax Reserve/Tonnage Tax Reserve (Utilised): This reserve is a statutory reserve as per requirement of section 115VT of the Income Tax Act, 1961 for the purpose of complying with the conditions for applicability of tonnage tax scheme

Retained Earnings: Retained Earnings represents surplus/accumulated earnings of the Corporation and are available for distribution to shareholders.

Other Comprehensive Income (OCI): OCI comprises items of income and expenses (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by Indian Accounting Standards. The components of OCI include: re-measurements of defined benefit plans.

(a) The Company’s pending litigations comprise claims against the Company and proceedings pending with Tax / Statutory/ Government Authorities. After review of all its pending litigations and proceedings, the Company has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/ authorities.

(b) A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances.

(c) The company issued bonds of Rs. 65,269 lakhs to custom authorities [a(IV)] is mainly for duty free movement of Import/Export containers.

None of the financial assets of SCI have been considered in the fair value of plan assets.

The expected rate of return on plan assets has been estimated on the basis of actual returns of the trust in the past years. The securities of trust have an effect on the fair value of plan assets as the value of the securities vary with the changes in the market interest rates.

Actual Return on plan assets Rs.1753 lakhs (Prev. period Rs.1833 lakhs).

Through its defined benefit plans, the group is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility :

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. The Company intends to maintain the above investment mix in the continuing years.

Changes in bond yields :

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

Life expectancy :

The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy. Contribution expected to be paid in the next year is Rs.10 Lakhs.

The weighted average duration of the defined benefit obligation is 9.67 years (2024 - 9.51 years).

The weighted average duration of the defined benefit obligation is 9.67 years (2024-9.51 years).

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

Note 31: Segment information

(a) Business Segments

The Group is managed by the Board which is the Chief Operating Decision-Maker (CODM). The Board has determined the operating segments based on the pattern of vessels deployed by the Group, for the purposes of allocating resources and assessing performance. With effect from 1st April 2024, the passenger and research vessels managed under the T&OS Division has been transferred to L&PS Division.

(I) Liner

Liner segment includes break-bulk, container transport and managed vessels (passenger vessels and research vessels) on behalf of other organisations.

(II) Bulk

Bulk Carriers include dry bulk carriers.

(III) Tanker

Tankers segment includes both crude and product carriers, gas carriers.

(IV) T&OS

Technical & Offshore services segment includes Group owned offshore vessels, offshore vessels managed on behalf of other organisations and income from technical consultancy.

(V) Unallocated

Unallocable items and interest income/expenses are disclosed separately.

Expense and Revenue items are allocated vessel wise wherever possible. Expenses and revenue items that cannot be allocated vessel wise are allocated on the basis of age of the vessel i.e. (Current year - Built year) 1.

(b) Geographical Segments

Presently, the Group’s operations are predominantly confined in India.

(c) Adjusted Earnings Before Interest & Tax (EBIT)

Adjusted EBIT excludes discontinued operations and the effects of significant items of income and expenditure which may have an impact on the quality of earnings such as restructuring costs, impairments when the impairment is the result of an isolated, nonrecurring event. It also excludes the effects of gains or losses on financial instruments.

Interest income is not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Group.

The nature of services and its disclosure of timing of satisfaction of performance obligation is mentioned in para 1.18 of Note 1.

Contract Assets in the balance sheet constitutes unbilled amounts to customers representing the Company’s right to consideration for the services transferred to date. Any amount previously recognised as Contract Assets is reclassified to trade receivables at the time it is invoiced to the customer. Contract Liabilities in the balance sheet constitutes advance payments and billings in excess of revenue recognised. The Company expects to recognise such revenue in the subsequent financial years.

There were no significant changes in contract assets and contract liabilities during the reporting period except amount as mentioned in the table and explanation given above.

Trade receivables as disclosed in note 7(d) includes contract balances. Impairment losses as disclosed in Note 37 includes receivables arising from contracts with customers.

Under the payment terms generally applicable to the Company’s revenue generating activities, prepayments are received only to a limited extent. Typically, payment is due upon or after completion of the services.

The Company generates revenue from shipping activities. Revenue from a voyage charter is recognised over time, which is determined on a percentage of voyage completion method. The Company has recognised revenue over a period of time basis following output method. Since, the Company can tracks the progress toward completion of the contract by measuring days to date relative to total estimated days needed to satisfy the performance obligation, the percentage of voyage completion method/ straight-line basis over the period of the charter i.e. output method provide a faithful depiction of transfer of goods or services.

Note 33: Lease

The Company as lessee has agreements/contracts relating to charter in of vessel on time basis, land, building, Cars, Photocopier machine etc. The Company as lessor has entered into agreements/contracts of out charter of vessel on time, etc. The right-of-use and lease liability are disclosed in the financial statements at note no 5 & 14 (b) respectively. The Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss.

The fair value of financial instruments referred above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements). The categories used are as follows :

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have a quoted price. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities which are included in level.

There were no transfers between any levels during the year.

(All amounts in ' lakhs, unless otherwise stated)

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• the use of closing NAV for investment in mutual funds

• the use of book values for investment in unlisted equity securities

• the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 1 and 2 except for unlisted equity securities, where the fair values have been determined based on present values and the discount rates used were adjusted for counter party or own credit risk.

(iv) Valuation processes

The finance department of the Company includes a team that along with treasury function performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Director(finance).

For unlisted equity securities, their fair values are estimated based on the book values of the investee companies.

The carrying amounts of trade receivables, trade payables, short term security deposits, bank deposits with more than 12 months maturity, cash and cash equivalents including other bank balances and other current financial assets and liabilities are considered to be the same as their fair values. Hence the current financial assets & liabilities have not been considered for Fair value hierarchy above.

The fair values of non-current borrowings (with floating rate of interest) is not impacted due to interest rate changes and will not be significantly different from their carrying amount as there is no significant change in the underlying credit risk of the Company’s borrowings.

The fair values of non-current borrowings (with fixed rate of interest) are based on discounted cash flows using a current borrowing rate. They are classified as level 2 fair values in the fair value hierarchy due to the use of observable inputs.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The Company has exposure to the Credit risk, Liquidity risk and Market risk.

The Company’s Board of Directors has overall responsibility for the establishment and supervision of the Company’s risk management framework. The Board of Directors has established the Risk Management Committee (RMC), which is responsible for developing and monitoring the Company’s risk management policies. The Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(A) Credit Risk :

(i) Credit risk is the risk of financial loss to the Company if a customer to a financial instrument fails to meet its contractual obligations. Company’s exposure to credit risk primarily arises on account of its Trade receivables. Trade receivables consist of a large number of customers spread across diverse geographical areas. A default on a trade receivable is considered when the customer fails to make contractual payments within the credit period. This credit period has been determined by considering the business environment in which the Company operates.

The Company considers dealing with creditworthy customers and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The credit risk due to above is periodically monitored. Based on the periodical analyses, the credit risk is managed by continuous review and follow-up.

(ii) Provision for Expected Credit Losses (ECL):

The Company provides for expected credit loss on trade receivables based on a provision matrix. This matrix is a simplified basis of recognition of expected credit losses in case of trade receivables. The model uses historical credit loss experience for trade receivables i.e. this model uses aging analysis of trade receivables as at the reporting date and is based on the number of days that a trade receivables is past due. The aging has been done for bracket of 90 days over a period of last 3 years. Receivables that are more than 3 years old are considered uncollectible. Further, customers declaring bankruptcy or failing to engage in repayment plan with the Company, provisioning is made on case to case basis i.e. such customers do not form part of this impairment exercise and provided for separately. Expected credit loss on unbilled revenue is also provided based on provision matrix of Trade receivables.

(i) Prudent liquidity risk management refers to the management of the Company’s short term and long term funding and liquidity management requirements. The Company’s treasury maintains flexibility in funding by maintaining availability of funds under committed credit lines.

Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities

The tables below analyse the Company’s non-derivative financial liabilities into relevant maturity groupings based on their contractual maturities.

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

Market risk is the risk that changes in market indicators such foreign exchange rates, interest rates and commodity prices will affect the Company’s income or the value of its financial instruments. The Company’s activities mainly expose it to risks arising from changes in foreign exchange rate and interest rate and freight/charter hire rates.

(i) Foreign Currency Risk

The Company operates vessels in foreign waters, earns revenues and incurs expenditure in foreign currencies, primarily with respect to USD, EURO and certain other foreign currencies. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency (INR).

Considering the business environment in which Company operates, exposure to foreign exchange rate risk is largely managed by collection of income in foreign currencies in bank accounts abroad.

(ii) Interest Rate Risk

Interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates. The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Company manages its interest rate risk by regularly monitoring the interest rate movement and deciding on type of interest rate i.e. fixed or fluctuating.

(iii) Freight / Charter hire risk

Shipping industry is governed by various national and international economic and geopolitical developments. Local and international demand and supply determine freight and charter hire rates. Since Company’s vessels ply in international waters, it is affected by such developments. Also, bunker cost is major component of Company’s cost structure and bunker prices are highly volatile. Informatively, as per GST return filed during FY 2024-25, Export Revenue of the group is Rs. 178,151 lakhs (previous year Rs. 154,472 lakhs).

The Company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

(b) Loan Covenants

The company has ECB and FCNR loan agreements with 2 banks and these banks have covenents of DSCR, interest coverage ratio, total liabilities to shareholders equity and total debt to EBIDTA. The Company is comfortably meeting all the financial covenants of both the banks during FY 2024-25.

Note 39

As per the guidelines dated 27.5.2016 issued by Department of Investment and Public Asset Management (DIPAM), MOF, GOI in respect of dividend, bonus shares, etc. the Company has an obligation to comply with these guidelines. However, the company shall take into consideration and be guided by the provisions of the Companies Act 2013, Companies (Declaration and Payment of Dividend) Rules, 2014, Guidance Note on Dividend & Secretarial Standard 3 (SS3) and company’s future plans and cash position for taking necessary action appropriate and deemed fit in the circumstances.

Note 40

The matter of payment of Performance Related Pay (PRP) of Rs.1,103 lakhs vis-a-vis DPE guidelines w.r.t. computation of profits from core activities and non-observance of "Bell Curve” is continued since the FY 2014-15. The Action Taken Notes (ATNs) furnished by the Ministry of Ports, Shipping and Waterways (MoPSW) has been examined by Committee of Public Undertakings in the sitting held on 05.12.2024. The Company is awaiting the decision / recommendation of the Committee on the subject matter.

Note 41

"Pursuant to the order of Hon’ble ITAT Mumbai in favor of the Company for A.Y. 2010-11, it may be noted that the Corporation has not yet received any intimation of appeal filed by the Income Tax department with the Hon’ble Bombay High Court, however as a matter of prudence, the Company has disclosed the matter under Contingent liability in the financial statements for the year ended 31.03.2024. Notably, the Company has received the Order Giving Effect (OGE) dated 21st February 2025 from the Income Tax department to the ITAT order dated 28.02.2024.

On 11.03.2025, the Hon’ble ITAT Mumbai in the Company’s own case of A.Y. 2018-19 has passed an order in favor of the Company in the matter of Interest income by ruling that the said income would be in the nature of business income i.e. core business activity and not in the nature of ‘Income from Other Sources’.

Based on the precedence in identical matter, the Company has reversed the provision for income tax for the for assessment year 2018-19 to the tune of Rs. 24 crore, consequent to the aforesaid ruling. This adjustment is reflected under ""Tax pertaining to earlier Years"" in the financial statements for the year ended 31.03.2025. However, the Company has disclosed the matter under Contingent liability in the financial statements for the year ended 31.03.2025.

Note 42

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

Note 43

Pursuant to approval of demerger scheme by MCA vide its order dated 22.02.2023, 192 non-core assets were transferred from the Company (Demerged Company) to Shipping Corporation of India Land and Assets Limited (Resulting Company) (hereinafter referred to as SCILAL) w.e.f. 01 April 2021 and lease back of the same to the company has been treated as short term lease, pending execution of final agreement and disinvestment process as detailed in note no. 42 Note 44

a) The Company has the practice of seeking confirmations of balances from all the parties in respect of the Trade Receivables, Trade Payables and Deposits. While the reconciliation is an on-going process, the management does not expect any material difference affecting the financial results due to the same.

b) Reconciliation of agent/vendor/customer balances is an ongoing process. Management is of the view that effect of changes in the balances on account of above reconciliation and subsequent impact of foreign exchange gain / loss will not be material.

Note 45

The Board of Directors of the Company has recommended a dividend of Rs. 6.59 per equity share of face value of Rs. 10/- each. The outgo on this account will be approximately Rs. 30,696 lakhs subject to the approval of members at the ensuing Annual General Meeting.

Note 46

The Company is undertaking a review of all open charges as per MCA records and taking necessary action for filing of satisfaction of charges for which liability has already been discharged.

Note 47

SCI has incorporated wholly owned Subsidiary “SCI Bharat IFSC Limited” on 12.08.2024 with authorized Share Capital of Rs. 15,000 lakhs and Paid up Share capital of Rs. 3,000 lakhs with equity shares of face value of Rs. 10 each. SCI has paid Rs. 3,000 lakhs as long term investment in shares.

Note 50

The figures of previous year have been regrouped or rearranged wherever necessary to conform to current year’s presentation as per Schedule III (Division II) to the Companies Act 2013.