Shipping Corporation of India Ltd Auditor Reports

To the Members of

The Shipping Corporation of India Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of The Shipping Corporation of India Limited (“the Company”), which comprise the Balance Sheet as at 31.03.2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”), and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31.03.2025, its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current year. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No. Key Audit Matters	Auditors Response
1 Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (revenue accounting standard)	Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
The application of the revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized over a period. Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. In view of these reasons, this matter is identified as a Key Audit Matter. (Refer Note no. 32 to the Standalone Financial Statements)	• Evaluated the design of internal controls relating to Implementation of the accounting standard for revenue.
	• Selected samples of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price.
	• Selected samples of continuing and new contracts and performed the following procedures:
	• Read, analyzed and identified the distinct performance obligations in these contracts.
	• Compared these performance obligations with that identified and recorded by the Company.
	• Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue.
	• In respect of samples relating to fixed price contracts, progress towards satisfaction of performance obligation used to compute recorded revenue was verified
	• Samples of revenues disaggregated by type and service offerings were tested with the performance obligations specified in the underlying contracts.
2 Impairment testina of Fleets in line with the Ind AS 36	We have obtained the managements view to gain an overview of the triggering events, market conditions (present & future) operational factors and other key assumptions supporting the impairment assessment.
The Company at every reporting period, assesses market conditions and other specific risks to determine if there are any triggering events that may be indicators of an impairment of the fleets.
The impairment loss, if any, is recognized in the Statement of Profit and Loss in the period in which impairment takes place. The provision for impairment of fleets is identified as a Key Audit Matter as it involves significant management assumptions and judgment to assess the market conditions and other associated risks in assessment of provisions.	We have performed the following procedures for verification of impairment testing of Fleets:
	• Understanding the process of FMV (Fair Market Value) obtained by management.
	• Understanding the process for collecting the inputs into the valuation models to evaluate the design of the Companys controls over its impairment assessment and challenged the appropriateness of the inputs and significant assumptions, including the cash flow projections, discount rate, costs and expenses.
	• Assessing the reasonableness of fair value of vessels considered by the management by comparing the same with the valuations provided by external professional valuers.
3 The direct access of certain overseas foreign agents to fund collected on account of freight and other charges.	We assessed the Companys process to evaluate Agents on timely basis to identify the impact on the revenue and collection of funds.
Liner division of the Company has been carrying out its vessels operations and container marketing activities at various ports in India and abroad through its agency network. Agents perform various activities such as marketing, booking, clearing of cargo, port calls of vessels & also collection of freight on behalf of the Company.	• The Company has obtained bank guarantee from major agents & also reviewed the same periodically to confirm its validity and completeness with respect to risk exposure on revenue due to direct access to agents.
The Company depends on its agents for operation of Liner segment business. Since all the activities are performed by the agents, there is requirement of funds. Collection of income is done directly by agents and subsequently remitted to the Company. Therefore, it involves a risk on the part of the Company and hence is identified as a Key Audit Matter.	• The Company has provided Statement of Account (SOA) obtained from these foreign agents for confirmation of transactions and closing balance.
4 Evaluation of Drv Docking Cost, Repair Expenses and remaining useful life of Vessels:- As per Ind AS 16 ‘Property, Plant and Equipment, subsequent costs like expenditure on major maintenance refits or repairs including planned dry-dock are included in the assets carrying amount or recognized as a separate asset, as appropriate, when they meet the recognition criteria, i.e., only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.	To assess the recognition of dry docking cost, its useful life & repair cost, we performed the following procedure:
A shipping company on periodic basis is required to bring all ships into dry dock for major inspection and overhaul. Overhaul expenditure might at first sight seem to be a repair to the ships but it is actually a cost incurred in getting the ship back into seaworthy condition.	• Evaluated the design of internal controls relating to the major cost like repairs & dry-docking which are of two types
The dry-docking cost and repairs expenses of vessels are considered as Key Audit Matter as it requires management judgment to assess future economic benefits from the expenditure incurred and the measurement of the cost.	i.e. planned dry-dock & emergency dry-dock.
	• Selected sample to verify the operating effectiveness of the internal control, relating to identification of the distinction between the two cost i.e. repair & dry-dock cost.
	• Tested the relevant information technology systems relating to the dry-dock & Fleet related expenses.
	• Tested the useful life of dry-docking of vessels based on the assessment by management and statutory requirement on dry docking.
5 Provisions for taxes and Continaent Liabilities	Our audit procedure in response to this key Audit Matter inter- alia included:
The Company is involved in various taxes and other disputes for which final outcomes cannot be easily predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions, which require the use of judgment and such judgment relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgment required, the materiality of such litigations and the complexity of the assessment process, this is identified as a Key Audit Matter. (Refer Note no 27 to the Standalone Financial Statements regarding disclosure of contingent liabilities)
	• Assessment of the process and relevant controls implemented to identify legal and tax litigations, and pending administrative proceedings.
	• Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the Company considering the legal precedence and other rulings in similar cases.
	• Inquiry with the legal and tax departments personnel regarding the status of the most significant disputes and perusal of the key relevant documentation.
	• Analysis of opinion obtained by the Company from external experts, wherever available.
	• Review of the adequacy of the disclosures in the notes to the financial statements.
	• We have observed that the provision for tax estimated as above including the deferred tax, has not resulted in material deviation from the applicable rate of tax after considering the exemptions, deductions and disallowances as per the provisions of the Income Tax Act.

Emphasis of Matter

We draw attention to the following matters in the notes to the Standalone Financial Statements:

1. Note 40 on the matter continued since FY 2014-15 regarding payment of Performance Related Pay (PRP) of Rs.1,103 lakhs vis-a-vis DPE guidelines with respect to computation of profits from core activities and non-observance of "Bell Curve”. The Company is pursuing the matter with the Ministry of Ports, Shipping and Waterways for resolution and final decision.

2. Note 42 regarding selection of the Company for Strategic Disinvestment process by the Government of India. The disinvestment process and the procedural aspects in relation to the same are in progress.

3. Note 43 regarding MCAs approval in FY 22-23 for demerger between The Shipping corporation of India Limited (“Demerged Company”), The Shipping corporation of India Land and Assets Limited (“Resulting Company”) and consequent transfer of non-core asset and managements assessment of treating the same as short term lease pending execution of formal agreement.

4. a) Note 44 regarding the practice of seeking balance confirmations in respect of Trade receivables, Trade payables and Deposits, the process of reconciliation and the managements assertion that it would not have any material difference affecting the financial statements.

b) Note 44 regarding reconciliation of agent/vendor/customer balances and its consequential impact on foreign exchange gain/loss including the accuracy of the exchange gain / loss accounted on revaluation of balances. As stated in the referred note by management, the impact of the same would not be material.

Our opinion is not modified in respect of above matters.

Other Information

The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Directors Report including Annexures to Directors Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Standalone Financial Statements, and our auditors report thereon. The Annual report/Boards report is expected to be made available to us after the date of this auditors report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the other information, If we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance and determine the actions under the applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Standalone Financial Statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current year and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of section 143(11) of the Act, we give in “Annexure 1”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(2) As required by section 143(3) of the Act, we report that: a. We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of account; d. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended; e. In our opinion and to the best of our information and according to the explanations given to us, the Company being a Government Company, section 164(2) related to disqualifications for appointment of directors is not applicable to it in accordance with exceptions, modifications and adaptations provided vide Notification No. G.S.R. 463 (E) dated June 5, 2015 issued by Ministry of Corporate Affairs (the “Notification”). f. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure 2”; g. With respect to the other matter to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act: In our opinion and to the best of our information and according to the explanations given to us, the Company being a Government Company, section 197 of the Act related to the managerial remuneration is not applicable to it in accordance with exceptions, modifications and adaptations provided vide the Notification referred earlier under clause (e) above. h. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements Refer Note 27 to the Standalone Financial Statements; ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iii. There were no amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company. iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; (b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and (c) In our opinion and based on the audit procedures, we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement. v. As stated in Note 45 to the standalone financial statements - The dividend declared during the year by the Company is in compliance with section 123 of the Companies Act, 2013. vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is applicable for the financial year ended 31st March, 2025. Based on our examination which included test checks, except for the interfacing functional software (Danos and Afsys) which do not give in some instances full edit log report, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with and the audit trail has been preserved by the company as per the statutory requirements for record retention. (3) Pursuant to the requirement under Section 143(5) of the Act, applicable in case of a Government Company, we give in the “Annexure 3” a statement containing our comments on the matters specified in the directions and additional directions issued by office of the Comptroller and Auditor General of India to be reported in respect of the Company.

ANNEXURE 1 TO INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the members of the company on the Standalone Financial Statements for the year ended 31.03.2025]

Based on the audit procedures performed for the purpose of reporting a true and fair view on the Standalone Financial Statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: (i) (a) As per the information and explanations given to us, (A) the Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of Right of Use assets. (B) the Company has maintained proper records showing full particulars of intangible assets; (b) As per the information and explanations given to us, the Property, Plant and Equipment have been physically verified by the management at reasonable intervals. According to information and explanations given to us, company has a policy to physically verify Property, plant and Equipment except fleets in every three years, basis which the physical verification was due in the previous financial year and same is conducted by independent third party during the financial year 2024-25. (c) According to the information and explanation given to us and on the basis of our examination of records of the Company the title deeds of immovable properties recorded as fixed assets (Right of Use (ROU) Assets) in the books of account of the Company are held in the name of the Company. During FY 2022-23, pursuant to the MCAs approval of the Demerger Scheme on 22.02.2023, non-core assets have been transferred by the Company to The Shipping Corporation of India Land and Assets Limited. These transferred assets inter-alia included certain immovable properties for which title deeds were not available in the name of company as on the date of transfer.

(d) As per the information and explanations given to us, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year. Accordingly reporting under clause 3 (i) (d) of the Order is not applicable to the Company.

(e) As per the information and explanations given to us, no proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly reporting under clause 3 (i) (e) of the Order is not applicable to the Company.

(ii)

(a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable and the coverage and procedure of such verification by the management is adequate. In our opinion, the Company is maintaining proper records and no material discrepancies were noticed on physical verification of inventory during the year. (b) In our opinion and according to the information and explanation given to us, during the year under consideration, the Company has not availed any unsecured working capital limits in excess of five crore rupees from Banks. Therefore, reporting under this clause of the Order is not applicable to the Company.

(iii) The Company has made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties as per details mentioned below:

DETAILS OF GUARANTEE, SECURITY, LOAN AND ADVANCES IN NATURE OF LOANS

(Amount Rs.in lakhs)

Particulars	Guarantees	Security	Loans	Advances in nature of loans
Aggregate amount granted/ provided during the year:
- Subsidiaries	Nil	Nil	107.00	Nil
- Joint Ventures	Nil	Nil	Nil	Nil
- Associates	Nil	Nil	Nil	Nil
- Others	Nil	Nil	589.08	Nil
Balance outstanding as at balance sheet date in respect of above cases:
- Subsidiaries	Nil	Nil	339.38	Nil
- Joint Ventures	6,129.93	Nil	20,554.48	Nil
- Associates	Nil	Nil	Nil	Nil
- Others	Nil	Nil	2,412.43	Nil

b. The investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in nature of loans and guarantees provided are not prejudicial to the companys interest. c. In our opinion and according to the information and explanations given to us, in respect of loans no schedule of repayment of principal and payment of interest has been stipulated as the loans are repayable on demand. According to the information and explanations given to us, there are no advances in the nature of loans, during the year. d. In our opinion and according to the information and explanations given to us, there are no overdue amounts for more than ninety days. e. In our opinion and according to the information and explanation given to us, the Company has not granted any loan or advance in the nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties. f. The Company has granted loans either repayable on demand or without specifying any terms or period of repayments, details for which have been mentioned below:

Particulars	All Parties	Promoters	Related Parties
			Joint Venture	Subsidiary
Aggregate amount of loans/ advances in nature of loans:
- Repayable on demand (A)	Nil	Nil	20,554.48	Nil
- Agreement does not specify any terms or period of repayment (B)	Nil	Nil	Nil	339.38
Total (A+B)	Nil	Nil	20,554.48	339.38
Percentage of loans/ advances in nature of loans to the total loans	Nil	Nil	100	100

(iv) Based on information and explanation given to us, the Company has not advanced loans to the Directors/ to a Company in which the Directors are interested under section 185 of the Act read with proviso 185(1)(a). Further, the provisions of section 186 of the Act are not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has neither accepted any deposits nor any amounts which are deemed to be deposits from the public within the provisions of sections 73 to 76 of the Act and the rules framed there under. Therefore, clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records for any of the business activities carried out by the Company under sub-section (1) of section 148 of the Act and the rules framed there under. Therefore, clause 3(vi) of the Order is not applicable to the Company.

(vii)

(a) According to the information and explanation given to us, the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Goods and Services Tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it. There were no undisputed amounts payable in respect of Goods and Services Tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it, which were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, statutory dues referred to in sub-clause (a) above which have not been deposited at the year-end on account of disputes, are as follows:

Period	Name of the statute	Nature of the dues	Forum where Case is pending	Disputed Tax/Penalty Demand	Amount paid under Protest
AY 2005-06	Income Tax Act, 1961	Tax u/s 143(3)	Bombay High Court	114.73	-
AY 2006-07	Income Tax Act, 1961	Tax u/s 143(3) r.w.s. 147	Bombay High Court	2,101.46	-
AY 2007-08	Income Tax Act, 1961	Tax u/s 143(3)	Bombay High Court	4,957.91	-
AY 2008-09	Income Tax Act, 1961	Tax u/s 143(3)	Bombay High Court	8,956.54	-
AY 2009-10	Income Tax Act, 1961	Tax u/s 143(3)	Bombay High Court	1,564.03	-
AY 2010-11	Income Tax Act, 1961	Penalty u/s 271(1)(c )	CIT(A)	1,358.02	-
AY 2011-12	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	1,079.81	14.00
AY 2012-13	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	522.39	-
AY 2013-14	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	684.76	-
AY 2014-15	Income Tax Act, 1961	Tax u/s 143(3) r.w.s. 144C(13)	Bombay High Court	688.39	-
AY 2015-16	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	3,284.64	851.00
AY 2016-17	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	1,940.06	-
AY 2017-18	Income Tax Act, 1961	Tax u/s 143(3)	CIT(A)	1,304.84	-
FY 2003-04 to 2005-06	Income Tax Act, 1961	Tax u/s 201(1) and 201(1A)	Bombay High Court	9,820.00	-
FY 2010-11	Income Tax Act, 1961	Tax u/s 201(1) and 201(1A)	CIT(A)	2,170.00	109.00
Oct - 09 to June - 17	Finance Act, 1994	Service Tax	CESTAT	2,45,282.43	4,396.46
Apr 09 to Jul 14	Finance Act, 1994	Service Tax	Commissioner	1,553.18 (Appeals)	767.00
1st June 2016 to 30th June 2017	Finance Act, 1994	Service Tax	Commissioner (Appeals)	32.09	0.72
FY 1993-94, FY 1994-95 & Apr 2017 to June 2017	VAT	Sales Tax	Bombay High Court/ Asst Comm (GVAT)*	245.69	95.00
FY 2018-19	CGST / SGST Act	GST	Jt Commissioner (Appeals)	7,619.90	348.58
FY 2019-20	CGST / SGST Act	GST	Jt Commissioner (Appeals)	16,037.36	776.62

*According to the directions received from Bombay High Court in respect of financial year 2017-18, the Company has deposited the amount of Rs. 95 lakhs with the Prothonotary and Senior master of High Court, until the issue is decided by the Honble court.

(viii) According to the information and explanations given to us, there were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). (ix) According to the information and explanations given to us, (a) the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. (b) the Company has not been declared willful defaulter by any bank or financial institution or other lender. (c) the Company has applied the term loans for the purpose for which the loans were obtained.

(d) the Company has not utilised the funds raised on short term basis for long term purposes.

(e) the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary, and joint ventures and hence reporting under clause 3(ix)(e) of the Order is not applicable. (f) the Company has not raised loans on the pledge of securities held in its subsidiaries and joint ventures during the year and hence reporting under clause 3(ix)(f) of the Order is not applicable.

(x) (a) The Company has unutilized proceeds amounting to Rs.13,385 lakhs raised through further public offer (FPO) in the earlier years. During the year, the aforesaid unutilized amount has remained the same and the unutilized proceeds are continued to be kept in fixed deposits. (b) According to the information and explanations given to us, the company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year.

(xi) (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or any fraud on the Company, noticed or reported during the year, nor have we been informed of any such instance by the management. (b) During the year, no report under sub-section (12) of section 143 of the Companies Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) According to the information and explanations given to us, the Company has not received any whistle-blower complaints during the year.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) (a), (b) and (c) of the Order are not applicable to the Company.

(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of Act, where applicable, and the details have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with its current size and nature of its business.

(b) We have considered the internal audit reports for the year under audit, issued to the Company and till date, in determining the nature, timing and extent of our audit procedures.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them during the year and therefore, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) (a) According to the information and explanation given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and therefore, paragraph 3(xvi) (a) of the Order is not applicable to the Company.

(b) According to the information and explanation given to us, there are no Non-Banking Financial or Housing Finance activities and therefore, paragraph 3(xvi) (b) of the Order is not applicable to the Company.

(c) According to the information and explanation given to us, the company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and therefore, paragraph 3(xvi) (c) of the Order is not applicable to the Company.

(d) According to the information and explanation given to us, the Group (the Company and its two subsidiaries and four JVs) does not have any CIC as part of the Group and hence clause 3(xvi)(d) of the Order is not applicable to the Company.

(xvii) On an overall examination of the financial statements and in our opinion, the Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xviii) During the year there has not been any resignation of the statutory auditors and therefore, paragraph 3(xviii) of the Order is not applicable to the Company.

(xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans, we are of the opinion that no material uncertainty exists as on the date of the audit report that the company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We however state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) There are no unspent amounts as on 31.03.2025 that are required to be transferred to a fund specified in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub section 5 of section 135 of the Act. This matter has been disclosed in note no. 25(b) to the financial statements.

(b) According to the information and explanations given to us, any amount remaining unspent under section (5) of section 135 of

Companies Act, pursuant to any ongoing project, has been transferred to special account in compliance with provision of sub section (6) of section 135 of the said Act. However, in two instances for disbursements made in FY 2024-25 relating to FY 2022-23 and FY 2023-24, management has not received utilization certificate from Independent Chartered Accountant and we have relied on CFO Certification. Further, pending receipts of utilization certificate in one case for disbursement made in FY 2023-24, the company has initiated recovery from the implementing agency.

ANNEXURE 2 TO INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section in our Independent Auditors Report of even date to the members of The Shipping Corporation of India Limited on the Standalone Financial Statements for the year ended 31.03.2025] Report on the Internal Financial Controls with reference to Standalone Financial Statements under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls with reference to Standalone Financial Statements of The Shipping Corporation of India Limited (“the Company”) as of 31.03.2025 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness.

Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A companys internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, and to the best of our information and according to explanations given to us, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31.03.2025, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

ANNEXURE 3 TO INDEPENDENT AUDITORS REPORT

Annexure 3(a) - Directions under section 143 (5) of the Companies Act, 2013

On the Accounts of The Shipping Corporation of India Limited for the financial year 2024-25

Sr. No. Directions	Auditors comments including Action taken wherever required to be taken	Impact on the Accounts and financial statements
1 Whether the company has system in place to process all the accounting transactions through IT system? If No, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	The Company has SAP as Accounting System and other major operating softwares such as Danaos, Afsys etc. All these softwares are integrated with each other and there are no transactions, which are accounted outside the IT System.	No Impact
2 Whether there is any restructuring of an existing loan or cases of waiver/write off of debts /loans/interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for?	As observed during the course of audit and explained to us, there is no restructuring of an existing loan or cases of waiver/write off of debts /loans/interest etc. made by a lender to the company due to the companys inability to repay the loan.	No Impact
3 Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central / State Government or its agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation.	As observed during the course of audit and explained to us, the Company has received three subsidies in earlier years, status of the same is as follows: a) Subsidies towards Cargo Shipping Service between India and Maldives: During the financial years 2020-21, 2022-23, and 2023-24 the Company has received subsidy amounting to Rs.2110 lakhs, Rs. 1616 Lakhs and Rs. 200 Lakhs respectively, out of which Rs.4292 lakhs has been utilised as per the terms and conditions specified in various sanction letters issued by the Ministry of Shipping (Now Ministry of Ports, Shipping and Waterways) (‘MoPSW). During the financial year 2024-25, the Company has received subsidy amounting to Rs.3471 lakhs vide various sanction letters issued from MoPSW. Out of the above subsidy management has utilized Rs. 2196 Lakhs as on 31.03.2025. Further, the unutilized amount of Rs.909 lakhs has been disclosed as Liability after adjusting the expenses net of income against the subsidy amount as on 31.03.2025. The balance amount is placed in Fixed Deposit and interest earned against such deposit will be remitted to the consolidated funds of India after finalization of accounts for the year ended March 31, 2025 also same is in compliance with provisions of Ind AS 20 Government Grants. b) Related to Myanmar Service, the Company has accounted and utilised the grant as per its terms and conditions and the amount spent in excess of the grant amounting to Rs.467 lakhs is shown as receivable and being doubtful advances, full provision has been made on the same.	Impact

Annexure 3(b) - Additional directions under Section 143(5) of the Companies Act, 2013 in respect of The Shipping Corporation of India Limited for the financial year 2024-25.

Sr. Additional Directions No.	Auditors comments including Action taken wherever required to be taken	Impact on the Accounts and financial statements
1 State the system for providing Impairment to vessels	To determine Impairment of each vessel, carrying amount of the vessel is compared with its recoverable amount. Where the carrying amount of the vessel exceeds the recoverable amount, an impairment loss for the vessel is recognized. Recoverable amount of the vessel is higher of its Market Value or Value in use as on the balance sheet date. Market value of vessels at Balance Sheet date are based on valuation reports provided by reputed valuation firms. Value in use of vessels is based on projections of Future Cash inflows & Outflows generated from the use of the vessel and its subsequent sale. Cash inflows and outflows used in the calculation are based on market report of research and advisory firms as well as best available management estimates. Cash Inflow on sale of vessels is considered as their Scrap Value at the end of their useful life. The Value in use of Vessels as on the reporting date is arrived at by discounting the Net Cash Inflows by using Weighted Average Cost of Capital (WACC).	No Impact
2 State the system for bifurcating repairs and expense for capitalization and charging to revenue. Whether repairs and expenses which do not add to useful Iife of vessels are capitalized?	As per the companys accounting policy, expenses incurred during the planned dry docking of vessels and other major repair expenses of vessels like replacement of auxiliary engine etc. are capitalised in the assets carrying amount if it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably as per the recognition criteria of Ind AS 16. All other repairs and expenses that do not meet the recognition criteria of Ind AS 16 are charged to revenue. As observed during the course of audit, repairs and other expenses which do not add to useful life of vessels are not capitalised by the Company and the same are charged to revenue.	No Impact
3 Whether Title to all investments /FD actually available with the Company?	Title to all Investments including investments in shares & fixed deposits are available with the company.	No Impact
4 Whether the company is rendering services to other entities without any formal agreement? If yes, whether the company is getting reimbursement of the same in time and whether any interest is claimed / received for delayed payments?	In case of Technical Consultancy Income from Andaman & Nicobar Administration, the Company is accounting income as per new rates and making provision for the differential amount between new rate and old rate as per signed agreement. Yes, reimbursement of the same is delayed, however, no interest is claimed on delayed payments.	Impact

 

For M/s. D.R. Mohnot & Co.	For M/s. PSD & Associates
Chartered Accountants	Chartered Accountants
FRN: 001388C	FRN: 004501C
Sd/-	Sd/-
Saurabh Mohnot	Priyanka Murarka
Partner	Partner
Membership No.412971	Membership No.430629
UDIN : 25412971BMJBQJ6855	UDIN: 25430629BMKTBF5348
Place: Mumbai
Date: 16.05.2025