Auditor Report of Cochin Shipyard Ltd.

Mar 31, 2025

We have audited the accompanying Standalone Financial
Statements of Cochin Shipyard Limited (referred to as the
"Company") which comprises the Balance Sheet as at March
31,2025, the Statement of Profit and Loss (including other
comprehensive income), Statement of Cash Flows and Statement
of Changes in Equity for the year then ended, and notes to the
standalone financial statements, including material accounting
policy information and other explanatory information.

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, 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 Companies Act 2013 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 March 31,2025, the Profit
including other comprehensive income, changes in equity and
its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies

Act, 2013. Our responsibilities under those Standards are further
described in the Auditor''s Responsibilities for the Audit of the
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 together with
the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act,
2013 and the Rules there under, and we have fulfilled our other
ethical responsibilities in accordance with these requirements
and the 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 financial statements.

1. Non-Factoring of Liquidated Damages for 2 Nos 1200
Passenger Ships:

Attention is drawn to Note No. 32.5 to the Standalone Financial
Statements, on shipbuilding contract for construction of 2
Nos 1200 Passenger Ships. The contractual delivery date
(as extended) for both the ships are already expired. At the
request of the customer for reallocation of the ships for other
prospective buyers, the delivery of ship has been abated
with minor progress. The Company has provided for the
liquidated damages for the delay upto 29th April,2023 and
30th Oct,2023 in respect of these ships. Since the Company
has a valid contract, it has not recognized further liquidated
damages in the financials beyond the dates mentioned above.

2. Research and Development Project-Hydrogen Fuel
Cell Electric Vessel & Autonomous Surface Vessel:

Attention is invited to Note No.40 (c) & (d) to the Standalone
Financial Statements, wherein, Ministry of Ports, Shipping and
Waterways (MoPSW) has sanctioned fund of H1,312.50 lakhs
& H 2,000.00 lakhs for Design, Development, Construction
and Demonstration of Fully Indigenous Hydrogen Fuel Cell
Electric Vessel & Autonomous Surface Vessel projects under
R&D (Shipping) Scheme.

As per the terms & conditions of the sanction to respective
projects, company is nominated as ''Implementing Agency''
for the development of said pilot projects and all the assets
acquired from the fund shall be the property of Govt. of India.

Further, the company is bound to comply with provisions
of General Financial Rules (GFR), 2017 as amended from
time to time, while spending the funds released.

As per the GFR 2017, in case of ongoing projects, the
company should not treat as its own assets in the books of
accounts but should disclose about its holding and using such
assets in the Notes to the Financial Statements. The decision
of return, sale or retain by the company will be decided by
the Ministry on completion of respective projects.

As on 31.03.2025, the Hydrogen Fuel Cell Electric Vessel
project is under demonstration phase & Autonomous
Surface Vessel project is under Development/
Construction Phase.

Accordingly, the company has charged of the balance
amount of H966.34 lakhs, incurred/spent by the company to
the Statement of Profit and Loss Account during the year.

Our opinion is not modified in respect of these matters.

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 for the year ended March
31,2025. 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.

1. Recognition of Revenue- Ship Building and Ship Repair
activities:

(Refer Note No.3.10(a),32 and 43 to the Standalone
Financial Statements)

The Company enters into shipbuilding and ship repair
contracts with customers, where revenue is recognised
over time in accordance with the Output Method.

There are significant accounting judgements involved
in estimating contract revenue to be recognised on
shipbuilding and ship repair contracts with customers,
including determination of physical progress of completion
as on the reporting date.

The physical progress of completion is ascertained as per
the in-house procedures developed by the management.
The procedure and the assumptions therein are based
on certain judgements made by the management
based on inputs from the technical departments of the
company. Further, the ascertainment of the actual physical
completion of each sub-activity on reporting date also
involves management estimation.

Significant judgements are involved in determining the
expected losses, when such losses become probable
based on the expected total contract cost. Cost
contingencies are included in these estimates to take
into account specific risks of uncertainties or disputed
claims against the Company, arising within each contract.
These contingencies are reviewed by the Management

on a regular basis throughout the life of the contract and
adjusted where appropriate. The revenue on contracts may
also include variable consideration (variations and claims).
Variable consideration is recognised when the recovery of
such consideration is highly probable.

Due to the nature of the contracts, revenue recognition
involves usage of percentage of completion method (ie.,
physical progress of completion) which is determined
by survey of work performed , which involves technical
expertise, significant judgments, identification of contractual
obligations and the Company''s rights to receive payments
for performance completed till date, changes in scope and
consequential revised contract price and recognition of the
liability for loss making contracts/onerous obligations.

Auditing management''s measurement of revenue
recognised over time involves significant judgements and
estimations made in measuring the physical progress of
completion, we presumed there are inherent audit risks in
the recognition of revenue and therefore determined this
to be a key audit matter.

Our Audit approach and procedures included but were
not limited to:

• Obtained an understanding of the policies and
procedures that the company applies in recognising
revenue from contract with customers, using the
output method and the underlying assumptions and
estimates thereon.

• Evaluated the appropriateness of the Company''s
revenue recognition policies, including those related
to variable considerations by comparing with the Ind
AS 115-Revenue from Contract with Customers.

• Tested the effectiveness of controls relating to
the evaluation of performance obligations and
identification of those that are distinct; estimation
of costs to complete each of the performance
obligations including the contingencies in respect
thereof, as work progresses and the impact thereon
as a consequence of change orders; the impact of
change orders on the transaction price of the related
contracts; and evaluation of the impact of variable
consideration on the transaction price.

• Selected of sample of contracts with customers and
performed the following procedures:

• Obtained and read contract documents for each
selection, change orders and other documents
that were part of the agreement/arrangement.

• Identified significant terms and deliverables in
the contract to assess management''s conclusions
regarding the (i) identification of distinct
performance obligations; (ii) changes to costs to
complete as work progresses and as a consequence
of change orders; (iii) the impact of change orders
on the transaction price; and (iv) the evaluation of
the adjustment to the transaction price on account
of variable consideration.

• Compared costs incurred with Company''s

estimates of costs incurred to date to identify
significant variations and evaluated whether
those variations have been considered

appropriately in estimating the remaining costs
to complete the contract.

• Tested the estimate for consistency with the
status of delivery of milestones and customer
acceptance to identify possible delays in
achieving milestones, which require changes
in estimated costs or efforts to complete the
remaining performance obligation.

• Performed analytical audit procedures for

reasonableness of revenues disclosed by type and
nature of service.

• Substantial reliance was placed on the technical and
activity-based assessment made by the management
in determination of percentage of physical progress
completion and assessed the reasonableness of
management''s assumptions and estimates.

• Assessed appropriateness of the relevant disclosures
made by the company in accordance with Ind AS 115.

We concluded that based on the procedures performed
above, we did not find any material exceptions with
regards to compliance of Ind AS 115 and timing of
revenue recognition.

2. Capitalisation of Projects as Property, Plant and
Equipment (PPE)

(Refer Note No.3.1,3.5 & 4(m) to the Standalone
Financial Statements)

The Company has substantial ongoing infrastructure
and development projects which, upon completion
and readiness for intended use, are transferred from
Capital Work-in-Progress (CWIP) to Property, Plant and
Equipment (PPE).

During the year ended 31st March,2025, the Company
has capitalised projects amounting to H2,11,283.18 lakhs
on account of commercialisation/ operationalisation of
International Ship Repair Facility (ISRF) & New Dry Dock.

The process of capitalisation requires management to
exercise significant judgment in determining the date
when an asset is ready for its intended use, assessing
whether all directly attributable costs are appropriately
included, categorising the assets under appropriate
classes of PPE, determining the useful life and residual
value based on technical evaluation.

Given the magnitude of the capitalised amounts and
the management judgments involved, we considered
the capitalisation of projects from CWIP to PPE as a
Key Audit Matter.

Our audit procedures included, among others:

• Evaluated the Company''s accounting policy for
capitalisation in line with Ind AS 16 - Property,
Plant and Equipment.

• Tested the design and implementation of key controls
over the capitalisation process.

• Reviewed the project completion certificates, internal

commissioning documents, and management

approvals to ascertain the readiness of assets
for intended use.

• Verified a sample of expenditures capitalised
to ensure they are directly attributable to the
construction or acquisition of the specific asset.

• Examined technical assessments by the engineering
team for the determination of useful life and residual
values of the assets.

• Assessed the categorisation of assets into
appropriate PPE classes.

• Reviewed subsequent costs to ensure they are not
incorrectly capitalised post commercialisation.

• Evaluated the appropriateness of disclosures in the
financial statements relating to capitalised projects.

Based on the above procedures, we found the
management''s judgement relating to capitalisation to be
reasonable and the related disclosures to be adequate.

Information Other than the Standalone Financial
Statements and Auditor''s Report Thereon:

The Company''s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Directors'' Report and Management Discussion
and Analysis, but does not include the consolidated financial
statements, standalone financial statements and our auditor''s
report thereon.

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 during the course of our audit or
otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance.

As on the date of this report, the other information was not
made available to us by the management. Accordingly, we are
unable to comment on this matter.

Responsibility of Management for the Standalone
Financial Statements:

The Company''s Board of Directors is responsible for the matters
stated in section 134(5) of the Companies Act, 2013 ("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, cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted
in India, including the Indian Accounting Standards specified
under section 133 of the Act. 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
implementation and maintenance of 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 financial
statement that give a true and fair view and are free from
material misstatements, 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 Responsibility 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 misstatements, 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
these standalone financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:

a. Identify and assess the risks of material misstatements 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;

b. 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 Companies Act, 2013, we are also responsible
for expressing our opinion on whether company has
adequate internal financial controls system in place and
the operating effectiveness of such controls;

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

d. 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;

e. 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 period 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.

For the year ended 31st March,2025, the company has initiated
the obtaining of balance confirmations. We have received only
a few confirmations of balances from Trade receivables, Trade
Payables and Bank balances. Wherever confirmations not
received by us, we have performed alternative audit procedures
by verifying the contract documents, invoices raised and
communications made for follow up action etc.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory
Requirements:

1. As required under the directions and sub-directions issued
by the Comptroller and Auditor General of India in terms of
Sub-section (5) of Section 143 of the Companies Act 2013,
we are enclosing our report in "Annexure A”.

2. As required by the Companies (Auditor''s Report) Order,
2020 ("the Order") as amended, issued by the Central
Government of India in terms of sub-section (11) of section
143 of the Companies Act, 2013, we give in the Annexure
a statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable our report thereon
is enclosed as "Annexure B”.

3. Non-Compliance of Composition of Board- Companies
Act,2013 & SEBI Listing Obligation and Disclosure
Requirements (LODR) Regulations, 2015:

During the year, all the 6 Non-Official (Independent)
Directors on the Board vacated their office, leading to non¬
existence all the committees of board as required.

As on the date, there were no Independent Directors on
the Board due to a casual vacancy. As a result, the Company
continues to be non-complaint with the constitution
of Audit Committee, Nomination and Remuneration
Committee, and other committees mandated as per the
provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, as amended from time to time.

It was informed that the Company being a CPSE, the power
to appoint the Directors vests with the Government of India
and appropriate requests for appointing sufficient number
of independent directors including a woman independent
director have been forwarded to the Government of India.

This Standalone Financial Statements for the year

ended 31st March,2025, were not reviewed by the Audit

Committee in accordance with the provisions of Sec.177

of the Companies Act,2013 and Regulation No.18(3) of the

SEBI (LODR) Regulations, 2015.

4. 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 and
proper adequate returns have been received from all
the regional offices of the company;

c. The Company''s Balance Sheet, the Statement of
Profit and Loss (incl. Other Comprehensive income),
the Statement of Cash Flows and the Statement of
Changes in Equity dealt with by this report are in
agreement with the books of accounts;

d. In our opinion, the aforesaid standalone financial
statements comply with the Indian Accounting
Standards specified under Section 133 of the
Act, read with The Companies (Indian Accounting
Standards) Rules, 2015, as amended thereon.

e. The provisions of Section 164(2) of the Act in respect
of disqualification of directors are not applicable
to the Company, being a Government Company in
terms of notification no. G.S.R.463 (E) dated 5th
June, 2015 issued by Ministry of Corporate Affairs,
Government of India;

f. With respect to the adequacy of the internal financial
controls over financial reporting of the company and
the operating effectiveness of such controls, refer
to our separate Report in "Annexure C". Our report
expresses unmodified opinion on the adequacy and
operating effectiveness of the Company''s internal
financial controls over financial reporting;

g. With respect to the other matters to be included in the
Auditors'' Report in accordance with the requirements
of section 197(16) of the Act, as amended:

The provisions of Section 197 read with Schedule V
of the Act, relating to managerial remuneration are
not applicable to the Company, being a Government
Company, in terms of Ministry of Corporate Affairs
Notification no. G.S.R. 463 (E) dated 5th June, 2015;

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, 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
No.46 to the Standalone Financial Statements;

ii. The company has made provision, as required
under 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 it''s knowledge and belief,
other than as disclosed in the notes
to the accounts, 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(s)
or entity(ies), including foreign entities
("Intermediaries"), with the understanding,
whether recorded in writing or otherwise,
that the Intermediary shall,

• 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 it''s knowledge and
belief, other than as disclosed in the
notes to the accounts, no funds have
been received by the company from
any person(s) or entity(ies), including
foreign entities ("Funding Parties"),
with the understanding, whether
recorded in writing or otherwise, that
the company shall,

• directly or indirectly, lend or invest in
other persons or entities identified in
any manner whatsoever by or

database tables to log data changes for the
accounting software used for maintaining
the books of account. However, any direct
data change to SAP database tables are
not being carried out;

Security audit log was enabled in the
ERP from 2022 onwards. The feature of
recording audit trail (edit log) facility of
the accounting software was enabled
on March, 2024;

Further, for the periods where audit
trail (edit log) facility was enabled and
operated, we did not come across any
instance of audit trail feature being
tampered with during the course of
our audit. Additionally, the audit trail
has been preserved by the company
as per the statutory requirements for
record retention.

Our examination of the audit trail was in the
context of an audit of financial statements
carried out in accordance with the Standard
of Auditing and only to the extent required
by Rule 11(g) of the Companies (Audit and
Auditors) Rules,2014. We have not carried
out any audit or examination of the audit
trail beyond the matters required by the
aforesaid Rule 11(g) nor have we carried
out any standalone audit or examination of
the audit trail.

• on behalf of the Funding Party
("Ultimate Beneficiaries") or
provide any guarantee, security or
the like on behalf of the Ultimate
Beneficiaries; and

c. Based on such audit procedures as
considered reasonable and appropriate
in these circumstances, nothing has
come to our notice that has caused
us to believe that the representations
under sub-clause (i) and (ii) contain any
material mis-statement.

v. The dividend declared/paid by the Company
during the year is in compliance with section
123 of the Companies Act, 2013;

vi. Based on our examination carried out in
accordance with the Implementation Guidance
on Reporting on Audit Trail under Rule 11(g) of
the Companies (Audit and Auditors) Rules,2014

(Revised 2024 Edition) issued by the Institute of
Chartered Accountants of India, which included
test checks, except the instances mentioned
below, we report that the company has used
an accounting software ie.,SAP S/4HANA, for
maintaining its books of accounts, which has a
feature of security audit log and recording audit
trail (edit log) facility for all relevant transactions
recorded in the software:

a. The feature of recording audit trail (edit
log) facility were enabled for identified

For Anand and Ponnappan

Chartered Accountants
FRN000111S

C. Krishnan Menon

Place: Kochi Partner

Date: 15.05.2025 Membership No :074736

UDIN: 25074736BMIYNV9785

---

Mar 31, 2024

We have audited the accompanying Standalone Financial Statements of Cochin Shipyard Limited (referred to as the "Company") which comprises the Balance Sheet as at March 31,2024, the Statement of Profit and Loss (including other comprehensive income), Statement of Cash Flows and Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.

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, 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 Companies Act 2013 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 March 31,2024, the Profit including other comprehensive income, changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies

Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 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 financial statements.

Emphasis of Matters:

1. Research and Development Project-Hydrogen Fuel Cell Electric Vessel:

Attention is drawn to Note No. 13 to the Standalone Financial Statements, wherein, the Company has

constructed a Hydrogen Fuel Cell Electric Vessel during the year amounting to H1,399.74 lakhs out of the Total estimated cost including demonstration and operation & maintenance cost for two years of H1,750.00 lakhs.

Research Committee of Ministry of Ports, Shipping and Waterways (MoPSW) has provided H1,015.88 lakhs as grant out of sanctioned grant of H1,312.50 lakhs.

Subsequently, company has entered into a Memorandum of Understanding with Inland Waterways Authority of India (IWAI) for Develop, Design, Construct and Supply of 1 No'' Hydrogen Fuel Cell Vessel. The Company intends to transfer the tittle and ownership of the said vessel through a separate contract, which is currently under advanced stage of discussion.

The Company has classified the said developed vessel under "Other Non-Current Assets" by reducing the amount received ie., "Amount payable to Ministry/GoI" on account of the intended transfer of asset to IWAI.

2. Non-Factoring of Liquidated Damages for 2 Nos 1200 Passenger Ships:

Attention is drawn to Note No. 34.4 to the Standalone Financial Statements, on shipbuilding contract for construction of 2 Nos 1200 Passenger Ships. The contractual delivery date (as extended) for both the ships are already expired. At the request of the customer for reallocation of the ships for other prospective buyers, the delivery of ship has been abated with minor progress. The Company has provided for the liquidated damages for the delay upto 29th April,2023 and 30th Oct,2023 in respect of these ships. Since the Company has a valid contract, it has not recognized further liquidated damages in the financials beyond the dates mentioned above.

3. Change in Accounting Policy on Measurement of Inventories:

Attention is drawn to Note No. 2.6.B to the Standalone Financial Statements, wherein the Company has changed its accounting policy with regard to measurement of Raw Materials and Components classified under "Note No.14 -Inventories" to the Standalone Financial Statements.

The said change in measurement is treated as "Change in Accounting Policy" of the Company as per Ind AS 8 and does not have any impact in the Standalone Financial Statements.

Necessary disclosures as required under Ind AS 8 to the extent practicable, were duly made in the Note No. 2.6.B & 14 to the Standalone Financial Statements.

Our opinion is not modified in respect of these matters.

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 for the year ended March 31,2024. 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.

1. Recognition of Revenue- Ship Building and Ship Repair activities:

(Refer Note No.3.10(a),34 and 45 to the Standalone Financial Statements)

The Company enters into shipbuilding and ship repair contracts with customers, where revenue is recognised over time in accordance with the Output Method.

There are significant accounting judgements involved in estimating contract revenue to be recognised on shipbuilding and ship repair contracts with customers, including determination of physical progress of completion as on the reporting date.

The physical progress of completion is ascertained as per the in-house procedures developed by the management. The procedure and the assumptions therein are based on certain judgements made by the management based on inputs from the technical departments of the company. Further, the ascertainment of the actual physical completion of each sub-activity on reporting date also involves management estimation.

Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and

adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable.

During the year, the company has updated its measurement of progress in applying the Output Method for recognition of revenue in respect of Shipbuilding Contracts in order to have a more faithful depiction in the company''s performance towards satisfaction of the performance obligations in the said segment, based on the change in circumstances and characteristics of the contracts entered thereon.

Due to the nature of the contracts, revenue recognition involves usage of percentage of completion method (ie., physical progress of completion) which is determined by survey of work performed , which involves technical expertise, significant judgments, identification of contractual obligations and the Company''s rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/onerous obligations.

Auditing management''s measurement of revenue recognised over time involves significant judgements and estimations made in measuring the physical progress of completion, we presumed there are inherent audit risks in the recognition of revenue and therefore determined this to be a key audit matter.

Our Audit approach and procedures included but were not limited to:

• Obtained an understanding of the policies and procedures that the company applies in recognising revenue from contract with customers, using the output method and the underlying assumptions and estimates thereon.

• Evaluated the appropriateness of the Company''s revenue recognition policies, including those related to variable considerations by comparing with the Ind AS 115-Revenue from Contract with Customers.

• Tested the effectiveness of controls relating to the evaluation of performance obligations and identification of those that are distinct; estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; the impact of change orders on the transaction price of the related contracts; and evaluation of the impact of variable consideration on the transaction price.

• Selected of sample of contracts with customers and performed the following procedures:

• Obtained and read contract documents for each selection, change orders and other documents that were part of the agreement/arrangement.

• Identified significant terms and deliverables in the contract to assess management''s conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration.

• Compared costs incurred with Company''s estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract.

• Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation

• Performed analytical audit procedures for reasonableness of revenues disclosed by type and nature of service.

• Substantial reliance was placed on the technical and activity-based assessment made by the management in determination of percentage of physical progress completion and assessed the reasonableness of management''s assumptions and estimates

• Assessed appropriateness of the relevant disclosures made by the company in accordance with IND AS 115.

We concluded that based on the procedures performed above, we did not find any material exceptions with regards to adoption of IND AS 115 and timing of revenue recognition.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon:

The Company''s Board of Directors is responsible for the other information. The other information comprises the information

included in the Directors'' Report and Management Discussion and Analysis, but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.

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 during the course of our audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

As on the date of this report, the other information was not made available to us by the management. Accordingly, we are unable to comment on this matter.

Responsibility of Management for the Standalone Financial Statements:

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("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, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. 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 implementation and maintenance of 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 financial statement that give a true and fair view and are free from material misstatements, 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 Responsibility 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 misstatements, 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 these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatements 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;

b. 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether company has adequate internal financial controls system in place and the operating effectiveness of such controls;

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

d. 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;

e. 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 period 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.

Other Matters:

For the year ended 31st March,2024, the company has initiated the obtaining of balance confirmations, whereas we have received few confirmations of balances from Trade receivables, Trade Payables and Bank balances. Wherever confirmations not received by us, we have performed alternative audit procedures by verifying the contract documents, invoices raised and communications made for follow up action etc.,

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

1. As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of Sub-section (5) of Section 143 of the Companies Act 2013, we are enclosing our report in "Annexure A”.

2. As required by the Companies (Auditor''s Report) Order,

2020 ("the Order") as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable our report thereon is enclosed as "Annexure B”.

3. 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 and proper adequate returns have been received from all the regional offices of the company;

c. The Company''s Balance Sheet, the Statement of Profit and Loss (incl. Other Comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this report are in agreement with the books of accounts;

d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with The Companies (Indian Accounting Standards) Rules, 2015, as amended thereon.

e. The provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the Company, being a Government Company in terms of notification no. G.S.R.463 (E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India;

f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C”. Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting;

g. With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of section 197(16) of the Act, as amended:

The provisions of Section 197 read with Schedule V of the Act, relating to managerial remuneration are not applicable to the Company, being a Government Company, in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463 (E) dated 5th June, 2015;

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, 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 No.48 to the Standalone Financial Statements;

ii. The company has made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any on longterm 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 it''s knowledge and belief, other than as disclosed in the notes to the accounts, 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall,

• 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 it''s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall,

• 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. Based on such audit procedures as considered reasonable and appropriate in these circumstances, nothing has come to our notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v. The dividend declared/paid by the Company during the year is in compliance with section 123 of the Companies Act, 2013;

vi. Based on our examination carried out in accordance with the Implementation Guidance on Reporting on Audit Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules,2014

(Revised 2024 Edition) issued by the Institute of Chartered Accountants of India, which included

test checks, except the instances mentioned below, we report that the company has used an accounting software ie.,SAP S/4HANA, for maintaining its books of accounts, which has a feature of security audit log and recording audit trail (edit log) facility for all relevant transactions recorded in the software:

a. The feature of recording audit trail (edit log) facility were enabled for identified database tables to log data changes for the accounting software used for maintaining the books of account. However, any direct data change to SAP database tables are not being carried out;

b. Security audit log was enabled in the ERP from 2022 onwards. The feature of recording audit trail (edit log) facility of the accounting software was enabled on March, 2024;

Further, for the periods where audit trail (edit log) facility was enabled and operated, we did not come across any instance of audit trail feature being tampered with during the course of our audit.

Our examination of the audit trail was in the context of an audit of financial statements carried out in accordance with the Standard of Auditing and only to the extent required by Rule 11(g) of the Companies (Audit and Auditors) Rules,2014. We have not carried out any audit or examination of the audit trail beyond the matters required by the aforesaid Rule 11(g) nor have we carried out any standalone audit or examination of the audit trail.

For Anand and Ponnappan

Chartered Accountants FRN000111S

Y. Banuteja

Partner

Place: Kochi Membership No :250129

Date: 24.05.2024

UDIN: 24250129BKKRRB1141

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Mar 31, 2023

Cochin Shipyard Limited

Report on Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Cochin Shipyard Limited (referred to as the "Company") which comprises the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including other comprehensive income), Statement of Cash Flows and Statement of changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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, 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 Companies Act 2013 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 March 31, 2023, the Profit including other comprehensive income, changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies

Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 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 financial statements.

Emphasis of Matters:

1. Capitalization of Cost for International Ship Repair Facility (ISRF):

Attention is drawn to Note No. 42 to the Standalone Financial Statements, wherein, the cost directly attributable to construction/development of project is capitalized in the books with effect from commencement of the project.

The land and water area on which the International Ship Repair Facility (ISRF) project is in progress, is taken on lease from Cochin Port Trust. The company has commenced development of the new ship repair facility with effect from 09th Jan 2018. The lease period of 30 years commences from date of Environmental Clearance. The company has not considered capitalization of said cost amounting to H8,288.21 lakhs from the commencement of project construction/development. As the amount is less than the materiality level arrived by the company, the management rectified/corrected the prior periods error amounting to H6,181.35 lakhs during the year, which was duly classified as ''Exceptional items'' in the Statement of Profit and Loss Account.

2. Non-Factoring of Liquidated Damages for 2 Nos 1200 Passenger Vessels:

Attention is drawn to Note No.33.5 to the Standalone Financial Statements, on shipbuilding contract with Andaman & Nicobar Administration for construction of 2 Nos 1200 Passenger Vessels. The contractual delivery date (as extended) for SH.0023 is already expired and another vessel SH.0024 is nearing expiry. The Company has provided for the liquidated damages for the delay upto 29th April,2023 and 30th Oct,2023 in respect of SH.0023 & SH.0024 respectively. Meanwhile, at the request of the A&N administration for reallocation of vessel to other prospective buyers, the delivery of ship has been abated, with minor progress. Since the Company has a valid contract with Andaman & Nicobar Administration for construction and delivery of 2 Nos 1200 Pax Vessels, the company has not recognized further liquidated damages in the financials beyond the dates mentioned above.

Our opinion is not modified in respect of these matters.

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 for the year ended March 31, 2023. 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.

1. Recognition of Revenue- Ship Building and Ship Repair activities:

(Refer Note No.3.15(a),33 and 44 to the Standalone Financial Statements)

There are significant accounting judgements involved in estimating contract revenue to be recognised on shipbuilding and ship repair contracts with customers, including determination of physical progress of completion as on the reporting date.

The physical progress of completion is ascertained as per the in-house procedures developed by the management of the company. The procedure and the assumptions therein are based on certain judgements made by the management based on inputs from the technical departments of the company. Further, the ascertainment of the actual physical completion of each sub-activity on reporting date also involves management estimation.

Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable.

Due to the nature of the contracts, revenue recognition involves usage of percentage of completion method (ie., physical progress of completion) which is determined by survey of work performed , which involves technical expertise, significant judgments, identification of contractual obligations and the Company''s rights to receive payments for performance completed till date, changes in scope and consequential revised contract price

and recognition of the liability for loss making contracts/ onerous obligations.

As revenue recognition involves aforesaid significant judgement and estimation, we therefore determined this to be a key audit matter.

Our principal audit procedures included but were not limited to:

• We assessed the appropriateness of the Company''s revenue recognition policies, including those related to variable considerations by comparing with applicable accounting standards;

• We tested the effectiveness of controls relating to the evaluation of performance obligations and identification of those that are distinct; estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; the impact of change orders on the transaction price of the related contracts; and evaluation of the impact of variable consideration on the transaction price.

• We selected a sample of contracts with customers and performed the following procedures:

• Obtained and read contract documents for each selection, change orders and other documents that were part of the agreement/arrangement.

• Identified significant terms and deliverables in the contract to assess management''s conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration.

• Compared costs incurred with Company''s estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract.

• Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation.

• Performed analytical audit procedures for reasonableness of revenues disclosed by type and nature of service.

• Substantial reliance was placed on the technical and activity-based assessment made by the management in determination ofpercentage ofphysical progress completion.

• Assessed appropriateness of the relevant disclosures made by the company in accordance with IND AS 115.

We concluded that based on the procedures performed above, we did not find any material exceptions with regards to adoption of IND AS 115 and timing of revenue recognition.

2. Recognition and measurement of Shipbuilding Financial Assistance (SBFA)-Government Grant:

( Refer Note No.3.15(b),33 and 33.6 to the Standalone Financial Statements)

Shipbuilding Financial Assistance is a monetary incentive granted by the government to the shipyards for construction of vessels eligible shipbuilding contracts, which is to be claimed on after the delivery of the vessels with in the time stipulated under the SBFA policy.

The company has a policy of recognising the assistance over the period of the time in proportionate to the expenses incurred.

During the current year ended March 31,2023, the company has recognised income of H1,193.43 lakhs (PY- H3,486.17 lakhs), which is essential for the eligible shipbuilding projects. The recognition and realisation of assistance income are based on the applicable rate to the period for which approval is issued by Director General (Shipping).

Considering prominence of the assistance to industry, revenue and profit may undergo a change in such judgements and estimates, we consider this to be area of significance.

Our principal audit procedures in relation to assistance income recognition include:

• We read the relevant notifications issued by the Govt. of India and discussed with the management, to understand the underlying matters and basis for management judgement and estimates including necessary changes made in estimates to address variations noted in past. Also ascertained the prevailing trade practice in the shipbuilding industry;

• We assessed the appropriateness of the company''s policy on the recognition of the assistance income by comparing with applicable accounting standards;

• We have correlated the in-principle approval made by the company for eligibility of the vessels coming under assistance policy and verified the claims made by the company on delivery of vessels and subsequent realisation.

• Further, we reviewed and tested the accuracy of the assistance recognised by the management in accordance with SBFA policy, in-principal approval, and expenses incurred;

• We have enquired from the Management and discussed with those charged with governance, the appropriateness in recognising the assistance income;

• We assessed the disclosures in the standalone financial statements in this regard;

Based on the above procedures performed, the recognition of shipbuilding assistance Income is in accordance with applicable financial reporting framework and relevant notifications issued by the Ministry of Ports, Shipping and Waterways, Govt. of India and fairly presented in the standalone financial statements.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon:

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Directors'' Report and Management Discussion and Analysis, but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.

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 during the course of our audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

As on the date of this report, the other information was not made available to us by the management. Accordingly, we are unable to comment on this matter.

Responsibility of Management for the Standalone Financial Statements:

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("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, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. 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 implementation and maintenance of 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 financial statement that give a true and fair view and are free from material misstatements, 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 Responsibility 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 misstatements, 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 these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatements 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;

b. 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether company has adequate internal financial controls system in place and the operating effectiveness of such controls;

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

d. 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;

e. 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 period 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.

Other Matters:

1. The comparative financial information of the company for the year ended 31st March, 2022 included in these Standalone financial statements, are audited by the predecessor auditors of the company and their report dated 20th May,2022, wherein an unmodified opinion is expressed by them.

2. For the year ended 31st March, 2023, the company has initiated the obtaining of balance confirmations, whereas we have received few confirmations of balances from Trade receivables, Trade Payables and Bank balances. Wherever confirmations not received by us, we have performed alternative audit procedures by verifying the contract documents, invoices raised and communications made for follow up action etc.,

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements:

1. As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of Sub-section (5) of Section 143 of the Companies Act 2013, we are enclosing our report in "Annexure A".

2. As required by the Companies (Auditor''s Report) Order,

2020 ("the Order") as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a

statement on the matters specified in paragraphs 3 and 4

of the Order, to the extent applicable our report thereon is

enclosed as "Annexure B".

3. 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 and proper adequate returns have been received from all the regional offices of the company;

c. The Company''s Balance Sheet, the Statement of Profit and Loss (incl. Other Comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this report are in agreement with the books of accounts;

d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with The Companies (Indian Accounting Standards) Rules, 2015, as amended thereon.

e. The provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the Company, being a Government Company in terms of notification no. G.S.R.463 (E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India;

f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C". Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting;

g. With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of section 197(16) of the Act, as amended:

The provisions of Section 197 read with Schedule V of the Act, relating to managerial remuneration are not applicable to the Company, being a Government Company, in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463 (E) dated 5th June, 2015;

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, 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 No.47 to the Standalone Financial Statements;

ii. The company has made provision, as required under 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 it''s knowledge and belief, other than as disclosed in the notes to the accounts, 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall,

• 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 it''s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall,

• 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. Based on such audit procedures as considered reasonable and appropriate in these circumstances, nothing has come to our notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v. The dividend declared/paid by the Company during the year is in compliance with section 123 of the Companies Act, 2013.

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Mar 31, 2022

Cochin Shipyard Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Cochin Shipyard Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), and the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

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 Ind AS prescribed under section 133 of the Act read with the Companies (Ind AS) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and 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 in accordance with the 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 Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 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 judgement, were of most significance in our audit of the standalone financial statements of the current period. 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.

1. Measurement of Physical Completion of Ship Building and Ship Repair activities.

The company recognises revenue from ship building and ship repair activities based on percentage of completion method. The percentage of completion is arrived at based on estimated percentage of physical completion as assessed by the management of the company which involves exercise of significant judgements. [Refer Note 2.4 (Critical Accounting Estimates & Judgements) & 2.19(a) (Revenue from operations) to the Standalone Financial Statements]. The physical completion is ascertained as per an in-house procedure developed by the management of the company. The procedure and the assumptions therein are based on certain judgements made by the management based on inputs received from the planning, design and technical departments of the company. Further, the ascertainment of the actual physical completion of each sub-activity on reporting date also involves management estimation. Our audit approach consisted of understanding the basis and assumptions made in adopting such procedure, understanding the system for capturing data and monitoring the progress of completion of various works for internal reporting to the management, evaluating the internal controls in such system, selecting samples and performing substantive checking and analytical procedures. However, we have placed substantial reliance on the technical and activity-based assessment made by the management for the purpose of recognition of income.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the Director''s Report, Management Discussion and Analysis, Business

Responsibility Report, Report on Corporate Governance, but does not include the standalone financial statements and our auditor''s report thereon. The annual 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 identified above when it becomes available 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 matter to those charged with governance and take necessary actions as per applicable laws and regulations.

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

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("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 accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act. 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, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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.

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 period 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 sub-section (11) of section 143 of the Companies Act, 2013, we give in "Annexure A", a statement on the matters specified in paragraph 3 and 4 of the Order to the extent applicable.

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, as disclosed in the Note 48 to the accounts, 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 entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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.

2. Based on the verification of records of the Company and based on information a nd explanati on gi ven to us, we give in "Annexure B", a report on the Directions and SubDirections issued by the Comptroller and Auditor General of India in terms of sub-section (5) of Section 143 of the Companies Act, 2013.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all 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 Standalone Balance Sheet, the standalone Statement of Profit and Loss (including Other Comprehensive

Income), the standalone Statement of Changes in Equity and standalone 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 Indian Accounting Standards specified under Section 133 of the Act.

(e) In view of the exemption given vide notification no. G.S.R 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of Directors, are not applicable to the Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of Section 197(16) of the Act, we offer no comments as the Company is exempted from the provisions of Section 197 vide notification no. G.S.R. 463(E) dated June 5, 2015.

(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 Nos. 44,45,46 of the Standalone Financial Statements).

(b) The Management has represented that, to the best of its knowledge and belief, as disclosed in the Note 48

to the accounts, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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.

(c) Based on the audit procedures performed that have been 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) above contain any material misstatement.

v. The dividend declared/paid by the Company during the year is in compliance with section 123 of the Companies Act, 2013.

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Mar 31, 2021

To

The Members of Cochin Shipyard Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Cochin Shipyard Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), and the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

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 Ind AS prescribed under section 133 of the Act read with the Companies (Ind AS) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, and 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 in accordance with the 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 Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 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 judgement, were of most significance in our audit of the standalone financial statements of the current period. 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.

1. Measurement of Physical Completion of Ship Building and Ship Repair activities.

The company recognises revenue from ship building and ship repair activities based on percentage of completion method. The percentage of completion is arrived at based on estimated percentage of physical completion as assessed by the management of the company which involves exercise of significant judgements. Refer Note 2.4 (Critical Accounting Estimates & Judgements) & 2.19 (a) (Revenue Recognition) to the Standalone Financial Statements. The physical completion is ascertained as per an in-house procedure developed by the management of the company. The procedure and the assumptions therein are based on certain judgements made by the management based on inputs received from the planning, design and technical departments of the company. Further, the ascertainment of the actual physical completion of each sub-activity on reporting date also involves management estimation. Our audit approach consisted of understanding the basis and assumptions made in adopting such procedure, understanding the system for capturing data and monitoring the progress of completion of various works for internal reporting to the management, evaluating the internal controls in such system, selecting samples and performing substantive checking and analytical procedures. However, we have placed substantial reliance on the technical and activity-based assessment made by the management for the purpose of recognition of income.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the Director''s Report, Management Discussion and Analysis, Business

Responsibility Report, Report on Corporate Governance, but does not include the standalone financial statements and our auditor''s report thereon. The annual 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 identified above when it becomes available 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 matter to those charged with governance and take necessary actions as per applicable laws and regulations.

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

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("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 accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act. 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, the Board of

Directors is responsible for assessing the Company''s ability to continue as going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to

liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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

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 requirementsregarding 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 period 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, 2016 ("the Order"), issued by the Central Government

of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure A" a statement on the matters specified in paragraph 3 and 4 of the Order to the extent applicable.

2. Based on the verification of records of the Company and based on information and explanation given to us, we

give in "Annexure B" report on the Directions and SubDirections issued by the Comptroller and Auditor General of India in terms of sub-section (5) of Section 143 of the Companies Act, 2013

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all 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 standalone Balance Sheet, the standalone Statement of Profit and Loss (including Other Comprehensive Income), the standalone Statement of Changes in Equity and standalone Cash Flow Statement 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 Indian Accounting Standards specified under Section 133 of the Act.

(e) In view of the exemption given vide notification no. G.S.R 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of Directors, are not

applicable to the Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to

our separate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of Section 197(16) of the Act, we offer no comments as the Company is exempted from the provisions of Section 197 vide notification no. G.S.R. 463(E) dated June 5, 2015.

(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 no 42,44,45,46)

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm 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.

For Elias George & Co.

Chartered Accountants Firm Regn. No. 000801S

Chirag J Shah

Partner

Kochi Membership No. 214798

11 June, 2021 UDIN: 21214798AAAABW6356

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of Cochin Shipyard Limited (‘the Company’), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘Ind AS financial statements’).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the Standalone Ind As financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following:-

i) Note No.29 to the Standalone Ind AS financial statements regarding the basis on which the Company has recognized revenue from ship building/ ship repair activities based on the Company’s own assessment of physical completion and further, reliance is placed on the technical assessment and activity based cost estimates defined by the Management for the purpose of recognition of income;

ii) Note No.41.a to the Standalone Ind As financial statements regarding environmental Clearance for the International Ship Repair Facility (‘ISRF’) project from the National Board for Wildlife (‘NBWL’) which has recommended environmental clearance for the ISRF project along with the conditions imposed by State Chief Wild Life Warden (‘CWLW’) and subsequent utilization of the Initial Public Offer proceeds relating to the ISRF project based on the management contention that the conditions imposed by the CWLW are to be complied with during the implementation of the ISRF project.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government in terms of sub-section (11) of section 143 of the Act, we give in “ Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. Based on the verification of records of the Company and based on information and explanations given to us, we give in “Annexure B” reports on the Directions issued by the Comptroller and Auditor General of India in terms of Sec 143(5) of the Companies Act, 2013.

3. 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 Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act;

e. In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015, issued by Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualification of Directors, are not applicable to the Company;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure C”.

g. 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, 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 Ind AS financial statements - Refer Notes 40, 42, 43 and 44 to the Standalone Ind AS 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. Further the Company did not have any long-term derivative contracts for which there were any material foreseeable losses. - Refer Note 53 to the Standalone Ind AS financial statements;

iii. There were no amounts, which were required to be transferred, to the Investor Education and Protection Fund by the Company; and

iv. The disclosures regarding details of specified bank notes held and transacted during November 8, 2016 to December 30, 2016 has not been made since the requirement does not pertain to financial year ended March 31, 2018.

With reference to the Annexure A referred to in the Independent Auditor’s Report to the members of the Company on the Standalone Ind As financial statements for the year ended March 31, 2018, we report the following:

i) In respect of the Company’s fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the Management during the year and there is a regular programme of physical verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii) As explained to us, the inventories (excluding goods in transit) were physically verified during the year in accordance with the inventory verification procedure adopted by the Management. In our opinion, the frequency of such physical verification needs to be increased. The discrepancies noticed on such physical verification between the physical stock and the book records were not material.

iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act, with respect to loans, investments, guarantees and securities.

v) According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and the rules framed there under and we are of the opinion that prima-facie, the prescribed books of account and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

vii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in respect of statutory dues:

(a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2018, for a period of more than six months from the date they became payable.

(b) There are no dues of Income tax, Sales tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise and Value added tax which have not been deposited with the appropriate authorities on account of disputes, except as given in “Annexure D”.

viii) According to the information and explanations given to us, the Company does not have any loans or borrowings from any financial institution, banks or government during the year. In respect of bonds issued, the Company has not defaulted in payment of any dues.

ix) In our opinion and according to the information and explanations given to us, money raised by way of initial public offer have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds. The Company has not raised any term loans during the year.

x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not applicable to the Company. Accordingly, paragraph 3(xi) of the Order is not applicable to the Company.

xii) In our opinion and according to the information given to us, the Company is not a Nidhi company as prescribed under Section 406 of the Act. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.

xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

With reference to the Annexure B referred to in the Independent Auditor’s Report to the members of the Company on the Standalone Ind As financial statements for the year ended March 31, 2018, we report the following:

A. Directions

1. Whether the company has clear title / lease deeds for freehold and leasehold land respectivelyRs. If not, please state the area of freehold and leasehold land for which title / lease deeds are not available.

Based on our examination of the records of the Company and according to the information and explanations given to us and the confirmation from Bond Trustees in respect of title deeds deposited with them and based on the details of land and buildings furnished to us by the Company, the title / lease deeds for freehold and lease hold land respectively are held in the name of the Company.

2. Whether there are any cases of waiver/write off debts/loans/interest etc., if yes, the reasons therefore and the amount involved.

Based on our examination of the records of the Company and according to the information and explanations given to us, during the year, the Company has not waived or written off any debts/loans/interest. As per the policy followed by the company, liquidated damages, where the levies depend on decisions regarding force majeure condition of contract, are accounted for on completion of contract and/or when final decision is taken. Based on our examination of the records of the Company and according to the information and explanations given to us, Liquidated damages accounted for has not been waived /written off during the year. Based on the explanation given to us, the Company does not have the practice of claiming interest on delayed payment from customers though certain contracts provide for the same.

3. Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Government or other authorities.

Based on our examination of the records as we considered appropriate and further based on the information and explanations given to us, the Company is maintaining proper records of inventory sent out during the year and lying with third parties. The Company has not received any assets as gift or grant(s) from Government or other authorities.

(Referred to in paragraph 3(f) under ‘Report on Other Legal and Regulatory Requirements’ section of the Independent Auditor’s Report to the members of the Company on the Standalone Ind As financial statements for the year ended March 31, 2018.)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls over financial reporting of Cochin Shipyard Limited (‘the Company’) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 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 Company’s 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note’) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by 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 over financial reporting 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting 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 company’s internal financial control over financial reporting 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2018 , based on the internal control over financial reporting 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 issued by the ICAI.

For Krishnamoorthy & Krishnamoorthy

Chartered Accountants

Firm’s registration number: 001488S

C.R Rema

Partner

Membership number: 029182

Cochin-16

May 24, 2018

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Mar 31, 2011

1. we have audited the attached balance sheet of M/s COCHIN SHIPYARD LIMITED KOCHI-682 015 as at 31st march 2011 the profit and loss Account and the cash Flow statement for the year ended on that date annexed thereto . these financial statement are the responsibility of the company’s management .Our responsibility is to express an opinion on these financial based on our audit.

2. we conducted our audit in according with the auditing standards generally an India those standard requirements 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 amount and disclosure in the financial statements an audit also includes assessing the accounting principles uses and significant estimates made overall financial statement presenting .We believe that audit provides a reasonable basis for our opinion.

3. As required by the companies (Auditors report) order 2003 as amended by the companies (Audit s report) Order 2004 issued by the Government of India in terms of sub section (4A) of section 227 company Act 1956 we enclose in the annexure a statement on the matters specified paragraphs and 4 and 5 of the said order

4.future to our comments on the Annexure referred to above and part 3 above we report that

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit

ii) In our opinion proper books of account as required by law have been keept by the company so far as appears from out examination of those books ;

iii)The balance sheet profit and loss Account and cash flow statements dealt with by this report are in agreement with books of account

iv) In our opinion the Balance sheet profit and loss Account and Cash flow statement dealt with this report comply with Accounting standards referred to in sub-section (3 C) of section 211 of the companies act 1956

v) Vide Notification No GSR 829(E) dated 21 day of October 2003 of the Ministry of finance Government of India it has been notified that cause (g) of sub clause (I) section 274 of the companies Act 1956 is not applicable to a government company.

vi) In our opinion and to the best of our information and according to the explanation given to us the said financial statements read together with the accounting policies and notes on account s there on give the information required by the companies act 1956 in the manner so required and subject to:

a) According to liabilities towards unsettled and incomplete subcontract work at the end of the year on an estimated basis.

b) Effect of using estimated for arriving at the total contract cost for the purpose of recognition of income from ship building contracts under percentage completion method recognition of anticipated loss on ship building contracts and for recognition of income form shiprepair activities under proportionate completion method and reduction from invoice value for arriving at shiprepair turnover and the consequent impact of any on the profitability and current assets as on the balance sheet date not ascertainable.

give a true and fair view in conformity with accounting principle generally accepted in India.

a) In the case of the balance sheet of the state of affairs of the company as on 31st March 2011.

b) In the case of the profit and loss account of the profit of the company for the year ended on that date and .

c) in the case of the cash flow statement of the cash flow for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

Annexure referred to in paragraph 3 of our report of even date on the accounts of M/s cochin shipyard Ltd for the year ended 31 st march 2011

i) a) The company has maintained proper records showing full particulars including quantitative details situation of fixed assets.

b) All the assets have been physically verified by the management during the year and there is a regular programme of physical verification which in out opinion is reasonable having regard to the size of the company and the nature of its assets no material discrepancies between the books records and the physical investors has been noticed on such verification.

c) No substantial part of fixed assets has been disposed of during the year.

ii) a) physical verification of inventory has been conducted on a selective basis at reasonable intervals by the management.

b) The procedures of physical verification of inventory following 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 discrepancies noticed on such physical verification between physical stock and the records have been properly dealt with in the books of account.

iii) a) The company has not granted any loans secured or unsecured to companies firms or other parties covered in the register maintained under section 301 of the companies Act 1956 accordingly paragraph 4 (iii) (b) (c) and (d) of the order are not applicable.

b) The company has not taken any loan secure or unsecured from companies firms or other parties covered in the register maintained under section 301 of the companies act 1956 accordingly pargraph 4 (iii) (f) and (g) of the order are not applicable.

iv) In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory fixed assets and for the sale of goods and services During the course of our audit we have not observed any continuing failure to correct major weaknesses in internal controls.

v) According to the information and explanation given to us there are no contracts or arrangements referred to section 301 companies act 1956 that need be entered in the register required to be maintained under that section accordingly commenting on transaction made in pursuance of such contract or arrangements dose not arise.

vi) According to the information and explanations given to us the company has not accepted deposit from the public and hence the directives issues by reserve bank of India and the provisions of section 58 A , 58 AA or any other relevant provisions of the companies Act 1956 and therefore the provisions of sub clause (vi) are not applicable to the company.

Vii) In our opinion the company has an internal audit system which commensurate with its sixes and nature of business.

vii) As explained to us, the Central Government has not prescribed the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 for the products and services of the company.

(ix)(a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the company is regular in depositing with appropriate authorities, undisputed statutory dues including provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty, Cess and other material statutory dues as applicable with the appropriate authorities. There are no arrears of undisputed statutory dues outstanding at the last day of the financial year, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us details of dues of Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute are detailed below:

Sl Name of Nature of Amount Period to which Forum where the No statute Liability (Rs in Lakhs) the amount relates dispute is pending

1. Income Tax Income Tax 63.28 2000-01 Case remanded by Act, 1961 ITAT pending before Assessing Officer

18.87 2004-05 Commissioner of Income Tax (Appeals)

8.54 2002-03 & 2003-04 Income Tax Appellate Tribunal

27.88 2005-06 & 2008-09 Commissioner of Income Tax (Appeals)

2. Kerala Value Penalty 2546.82 2008-09 Appellate Tribunal Added Tax Act, 2005

Kerala General Sales Tax 73.44 2001-02 Deputy Commissioner Sales Tax Act 1963 196.37 2004-05 Appeals

3. Finance Act, Service Tax 322.90 2003-04 Customs, Excise 1994 2004-05, 2005-06, and service Tax 2006-07 & 2007-08 Appellate Tribunal 1647.47 2004-05 Commissioner (Central Excise)

(x) The company has no accumulated losses as on 31 March 2011 and it has not incurred cash losses during the financial year ended on that date and in the immediately proceeding financial year.

(xi) In our opinion and according to information and explanation given to us, the company has not defaulted in the repayment of dues to any financial institution, bank or debenture holders as at the balance sheet date.

(xii) 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 the clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from the bank / financial institution.

(xvi) According to the information and explanations given to us, the company has not availed any Term Loan during the year other than short Term Loans raised for working capital requirement.

(xvii) According to the information and explanations give to us, we report that no funds raised on short-term basis have been used for long term investment.

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The company has not issued any debentures during the year.

(xx) The company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under audit.

For MENON & AYYAR

Chartered Accountants

Firm Registration No 002058S

Sd/-

MOHANNAN KUTTICKAT

ERNAKULAM Partner

21 June 2010 Membership No 015842

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. COCHIN SHIPYARD LIMITED, KOCHI-682 015, as at 31'' March, 2010, the Profit and Loss Account and also the cash flow statement for the year ended on that date, both 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 the 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 the 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 die Companies (Auditor''s Report) Order 2003 as amended by the Companies (Auditor''s Report) Order 2004 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 Mid 5 of the said order.

4. Further to our comments on the Annexure referred to above and Para 4 above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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;

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt within this report comply with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v) Vide Notification No. GSR 829(E) dated 21 day of October, 2003 of the Ministry of Finance, Government of India, it has been notified that Clause (g) of sub- clause (1) of section 274 of the Companies Act, 1956 is not applicable to a Government Company.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the Accounting Policies and Notes on accounts thereon, give the information required by the Companies Act, 1956 in the manner so required and subject to:

a) Accounting of liabilities towards unsettled and incomplete subcontract work, at the end of the year, on an estimated basis.

b) Effect of using estimates for arriving at, the total contract cost for the purpose of recognition of income from ship building contracts under percentage completion method, recognition of anticipated loss on ship building contracts and for recognition of income from ship repair activities under proportionate completion method and reduction from invoice value for arriving at ship repair turnover and the consequent impact, if any, on the profitability and current assets as on the Balance Sheet date is not ascertainable. give a true and fair view in conformity with accounting principles generally accepted in India.

a) in the case of the Balance Sheet, of the state of affairs of the company as on 31st March, 2010;

b) in the case of the Profit and Loss Account, of the profit of the company for the year ended on that date and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

Annexure referred to in paragraph 3 of our report of even date on the accounts of M/s. Cochin Shipyard Ltd. for the year ended 31st March. 2010

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have been physically verified by the Management during the year and there is a regular programme of physical verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies between the books records and the physical inventory has been noticed on such verification.

(c) No substantial part of fixed assets has been disposed of during the year.

(ii) (a) Physical verification of inventory has been conducted on a selective basis at reasonable intervals by the management,

(b) The procedures of physical verification of inventory 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. Discrepancies noticed on such physical verification between physical stock and the book records have been properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The company has not taken am loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate- internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory.

fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need be entered in the register required to be maintained under that section. Accordingly commenting on transaction made in pursuance of such contract or arrangements does not arise.

(vi) According to the information and explanations given to us, the company has not accepted deposits from the public and hence the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and therefore the provisions of sub-clause (vi) are not applicable to the Company.

(vii) In our opinion the Company has an internal audit system which commensurate with its size and nature of business.

(viii) As explained to us, the Central Government has not presented the maintenance of cost records under Section 209 (l)(d) of the Companies Act, 1956 for the products and services of the company.

(ix) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the company is regular in depositing with appropriate authorities, undisputed statutory dues including Provident pund, Employees Slate Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty . Excise duty. Cess and other material statutory dues as applicable with the appropriate authorities. There are no arrears of undisputed statutory dues outstanding, at the last day of the financial year, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us details of dues of Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute are detailed below:

SI Name of Nature of Amount Period to which Forum where the No. statute Liability (Rs. In lakhs) the amount relates dispute is pending

1 Income Tax Income Tax 63.28 2000-01 Case remanded by Act, 1961 ITAT pending before Assessing Officer

18.87 2004-05 Commissioner of Income Tax (Appeals)

362.66 1999-00, 2002-03 Income Tax & 2003-04 Appellate Tribunal

2 Kerala Value Penalty 2546.82 2008-09 Deputy Added Tax Act, Commissioner 2005 (Appeals)

3 Finance Act, Service Tax 322.90 2003-04, Customs, Excise 1994 2004-05, 2005-06, and Service Tax 2006-07 & 2007-08 Appellate Tribunal 1647.47 2004-05 Commissioner (Central Excise)

(x) The company has no accumulated losses as on 31.03.2010 and it has not incurred cash losses during the financial year ended on that date and in the immediately preceding financial year.

(xi) In our opinion and according to information and explanation given to us, the company has not defaulted in the repayment of dues to any financial institution, bank or debenture holders as at the balance sheet date.

(xii) 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 the clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from the bank/ financial institution.

(xvi) According to the information and explanations given to us, the Company has not availed any Term Loan during the year other than Short Term Loans raised for working capital requirement.

(xvii) According to the information and explanations given to us, we report that no funds raised on short-term basis have been used for long-term investment

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The company has not issued any debentures during the year.

(xx) The company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under audit.

For MENON & AYYAR

Chartered Accountants

Firm Registration No. 002058S

Sd/-

MOHANAN KUTTICKAT

ERNAKULAM Partner

21 July 2010 Membership No. 015842