We have audited the accompanying Standalone Financial Statements of The Shipping Corporation of India
Limited (“the Company”), which comprise the Balance Sheet as at 31.03.2026, 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
31.03.2026, 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
Auditor's 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 ICAI's 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.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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1
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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)
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)
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Our audit approach consisted testing of the design and
operating effectiveness of the internal controls and
substantive testing as follows:
• Evaluated the design of internal controls relating to
Implementation of the accounting standard for revenue.
• Selected a sample 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 a sample 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
• Sample of revenues disaggregated by type and service
offerings was tested with the performance obligations
specified in the underlying contracts.
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2
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Impairment testing of Fleets in line with the
Ind AS 36
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.
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We have obtained the management's view to gain an
overview of the triggering events, market conditions
(present & future) operational factors and other key
assumptions supporting the impairment assessment.
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
Company's 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 vessel
considered by the management by comparing the same
with the valuations provided by external professional
valuers.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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3
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The direct access of certain overseas
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We assessed the Company's process to evaluate Agents on
timely basis to identify the impact on the revenue and
collection of funds.
• 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 has provided Statement of Account (soa)
obtained from these foreign agents for confirmation of
transactions and closing balance.
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foreign agents to fund collected on account
of freight and other charges.
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 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.
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4
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Evaluation of Dry Docking Cost, Repair
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To assess the recognition of dry docking cost, its useful life &
repair cost, we performed the following procedure:
• Evaluated the design of internal controls relating to the
major cost like repairs & dry-docking which are of two
types i.e. planned dry-dock & emergency dry-dock.
• Selected a 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.
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Expenses and remaining useful life of
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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 asset's 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.
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.
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.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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5
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Provisions for taxes and Contingent
Liabilities
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)
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Our audit procedure in response to this key Audit Matter
inter-alia included:
• 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.
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Emphasis of Matter
We draw attention to the following matters in the notes to the Standalone Financial Statements:
1. Note No. 40 regarding present geopolitical escalation in Middle East and restricted maritime movement
through the Strait of Hormuz and few vessels of the company are awaiting clearance for transit. As stated in the
said note company does not expect any material impact of the same.
2. Note No. 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. a) Note No. 43 (a) regarding the practice of seeking balance confirmations in respect of Trade receivables,
Trade payables and Deposits, the process of reconciliation and the management's assertion that it would not
have any material difference affecting the financial statements.
b) Note No. 43 (b) 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.
c) Note No. 44 regarding reconciliation of tax assets as per books of accounts and corresponding tax returns
and assessment orders. As stated in the said note the impact of the same would not be material.
Our opinion is not modified in respect of above matters.
Other Information
The Company's Board of Directors are responsible for the other information. The other information comprises the
information included in the Director's Report including Annexures to Director's Report, Business Responsibility
Report, Corporate Governance and Shareholder's Information, but does not include the Standalone Financial
Statements, and our auditor's report thereon. The Annual report/Board's report is expected to be made available
to us after the date of this auditor's 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 Company's 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 Company's
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 Company's financial reporting process.
Auditor's 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 auditor's 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)0) 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 management's 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 Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's 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 auditor's 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 auditor's 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 (Auditor's 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 Auditor's 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 Auditor's 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 39 to the standalone financial statements - The dividend declared or paid during the
year by the Company is in compliance with section 123 of the Companies Act, 2013.
vi. Based on our examination which included test checks, except for instances mentioned below the
company has used an accounting software (SAP and other interfacing functional software's such as
DANAOS and Afsys) 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.
• Edit logs are not being generated properly with all details from interfacing functional software
from November 2025 to March 2026.
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 except as stated above.
(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.
For M/s. D.R. Mohnot & Co. For M/s. PSD & Associates
Chartered Accountants Chartered Accountants
FRN: 001388C FRN: 004501C
D.R.Mohnot Priyanka Gupta
Partner Partner
Membership No.070579 Membership No.430629
UDIN: 26070579QDZUAR8971 UDIN: 26430629GJINJL4257
Place: Mumbai
Date: 08.05.2026
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