1.  We have audited the attached Balance Sheet of The Shipping
 Corporation of India Ltd. as at 31st March, 2011, and the Profit and
 Loss Account and Cash Flow Statement for the year ended on that date
 annexed thereto. These financial statements are the responsibility of
 the Company''s management. Our responsibility is to express an opinion
 on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003 issued
 by the Government of India in terms of sub-section (4A) of the Section
 227 of the Companies Act, 1956, we annex here to a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4) Further to our comments in the annexure referred to in Para 3 above,
 we report that:
 
 a) We have 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 appears from our examination of those
 books;
 
 c) The Balance Sheet, Profit and Loss account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement comply with the Accounting Standards referred to in Sub
 section (3C) of Section 211 of the Companies Act, 1956;
 
 e) Being a Government company, pursuant to the Notification no.GSR
 829(E) dated 21.10.2003 issued by Government of India, provisions of
 clause (g) of sub-section (1) of section 274 of the Companies Act,
 1956, are not applicable to the Company;
 
 f) Attention is invited on:
 
 Note. No. 1, Schedule-25 Notes on Accounts, regarding various errors
 and omissions have been made by the Company during the process of
 migration / uploading of data post migration in the new accounting
 software ERP-SAP, in respect of accounting of the income and expenses,
 assets and liabilities for which necessary rectification has been
 carried out by the Company.
 
 Further there remain certain items where the company is unable to make
 appropriate adjustment and the effects of errors and adjustments, if
 any, as might have been determined to be necessary in the data migrated
 / uploaded in the accounting software post migration.
 
 It has been further noticed that the Company has:
 
 i) Not accounted the income and expenditure in respect of unfinished
 voyages as per accounting policy No. 2(c), having no impact on the
 profit for the year.
 
 ii) Non accounting of foreign currency transactions at the rates as
 stipulated in Accounting Policy No. 8 (a) for the months of January
 2011 and February 2011 instead the same have been accounted at the
 exchange rates applicable for the month of March 2011.
 
 g) Note No. 17 of Schedule-25 Notes to the Accounts in respect of
 balances of Sundry Creditors, Debtors, Loans & Advances and Deposit
 which are subject to confirmation.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, subject to our comments in para 4 (f) above,
 the said accounts read together with the Significant Accounting
 Policies stated in Schedule 24 and Notes on the Accounts in Schedule
 25, give the information required by the Companies Act, 1956, in the
 manner so required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 ii) in the case of the Profit and Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 iii) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure to the Auditors'''' Report
 
 Statement referred to in Paragraph (3) of our report of even date to
 the members of The Shipping Corporation of India, on the accounts for
 the year ended 31st March 2011:
 
 i) (a) The Company has generally maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The assets have been physically verified by the management during
 the year which in our opinion is reasonable having regard to the size
 of the Company and the nature of its assets. No material discrepancies
 were noticed on such verification.
 
 (c) Substantial part of the fixed assets has not been disposed off
 during the year.
 
 ii) (a) The stock of Fuel oil and stores has been physically verified
 by the management at reasonable intervals.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification of inventories, were not material
 in relation to the operation of the Company and the same have been
 properly dealt with in the books of account.
 
 iii) (a) The Company has not granted any loans secured or unsecured to
 the Company, firms or other parties covered in register maintained
 under Section 301 of the Companies Act, 1956. In view of clause
 (iii)(a) above, the clause (iii)(b), and (iii)(c) and (iii)(d) are not
 applicable.
 
 (b) The Company has not taken any loans, secured or unsecured from
 companies, firm or other parties covered in register maintained under
 section 301 of the Companies Act, 1956. In view of (iii)(e) above, the
 clause (iii)(f) and (iii)(g) are not applicable.
 
 iv) In our opinion and according to the information and explanation
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business for
 purchase of inventory, fixed assets and rendering of services. During
 the course of our audit, we have not observed any continuing failure to
 correct major weaknesses in internal control systems. However weakness
 in design of internal control in respect of migration of the data /
 uploading of the data have been observed in the process of
 implementation of ERP-SAP, although as at the balance sheet date, the
 material errors and omission effecting the results as observed during
 the course of our audit has been rectified by the management.
 
 v) (a) According to the information and explanations given to us,
 during the year under audit there has been no contracts or arrangement
 which need to be entered in the register maintained under Section 301
 of the Companies Act, 1956. In view of clause (v)(a) above, the clause
 (v)(b) is not applicable.
 
 vi) In our opinion and according to the information and explanations
 given to us, the Corporation has not accepted any deposit from the
 public within the meaning of the Section 58A, 58AA or any other
 relevant provisions of the Companies Act, 1956 and the rules framed
 under there. No order has been passed by the Company Law Board, or
 National Company Law Tribunal, or Reserve Bank of India, or any Court,
 or any other Tribunal.
 
 vii) The Company has an internal audit system commensurate with its
 size and nature of business till December 2010.  Post implementation of
 the ERP-Sap, the internal auditor expressed inability to cover many
 areas and report thereon including accounting of income and expenses on
 finished and unfinished voyages etc.
 
 viii) As per the information and explanations given to us, maintenance
 of cost records has not been prescribed by the Central Government under
 Section 209(1) (d) of the Companies Act, 1956.
 
 ix) (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, income tax, wealth tax, value added tax
 Service Tax, custom duty, excise duty, cess and other statutory dues
 have generally been regularly deposited with the appropriate
 authorities within a period of six months from the date they become
 payable which has since been deposited with the appropriate
 authorities.
 
 (c) The disputed statutory dues aggregating to Rs. 8813 lac that have
 not been deposited on account of matters pending before appropriate
 authorities are detailed below :
 
 Sr.  Name of the     Nature of Dues      Forum where         Rs. / lac
 No   Statute                            dispute is pending
 
 1    Income Tax 
      Act, 1961       u/s 195             ITAT                    417
 
 2    Income Tax
      Act, 1961       Tax u/s 143
                     (3) & 147            CIT (A) Mumbai         4939
 
 3    Income Tax 
      Act, 1961       Tax u/s 154 & 
                      143(3)              CIT (A) Mumbai         1861
 
 4    Income Tax
      Act, 1961       Tax u/s 143 (3)     ITAT                   1569
 
 5    Income Tax
      Act, 1961       Tax u/s 154 & 
                      115 WE (3)          CIT (A) Mumbai           27
 
 Total                                                           8813
 
 x) The Company has no accumulated losses and has not incurred cash
 losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, banks or debenture holders.
 
 xii) According to the information and examinations given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 xiii) The Company is not a chit fund or a nidhi / mutual benefit fund /
 society. Therefore, the provisions of clause 4(xiii) of the Companies
 (Auditor''s Report) order, 2003 are not applicable to the Company.
 
 xiv) The Company is not dealing in or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the Company.
 
 xv) In our opinion and information and explanations given to us the
 Company has not given guarantees for loans taken by others from banks
 or financial institutions are not prejudicial to the interest of the
 Company.
 
 xvi) According to the information given to us, the term loans have been
 applied for the purposes for which they were obtained.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we are of
 the opinion that no funds raised on short-term basis have been used for
 long-term investment.
 
 xviii) According to the information and explanations given to us, the
 Company has not made preferential allotment of shares during the year.
 
 xix) The Company has not issued any debentures/ bonds during the year.
 
 xx) According to the information and explanations given to us, the
 Company has raised money by public issue during the year and same have
 been applied for the purpose for which they were obtained.
 
 xxi) On the basis of information and explanations given to us by the
 management, we report that no material fraud on or by the Company has
 been noticed or reported during the year.
 
 
 For P.S.D. & ASSOCIATES           For SARDA & PAREEK
 
 Chartered Accountants             Chartered Accountants
 
 Firm Registration No.: 004501C    Firm Registration No.: 109262W
 
 Manish Agarwal                          Sitaram Pareek
 
 Partner                                     Partner
 
 (Membership No. 406996)              (Membership No. 016617)
 
 Place : Mumbai
 
 Date : 30th May 2011.