Notes to Accounts of Cochin Shipyard Ltd.

Mar 31, 2025

3.9 Provisions , Contingent Liabilities and Contingent assets

a) Provisions

A provision is recognized if, as a result of a past event,
the Company has a present legal obligation that can be
estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation.

Provisions (excluding retirement benefits and
compensated leave) are not discounted to its present value
and are determined by the best estimate of the outflow of
economic benefits required to settle the obligation at the
reporting date. These are reviewed at each reporting date
adjusted to reflect the current best estimates.

Warranty obligations included in this type of provisions are
not treated as a separate performance obligation, unless
the customer has the option of contracting the warranty
separately, therefore they are recognized in accordance
with Ind AS 37. These provisions are classified as current
liabilities since they relate to the operating construction
projects cycle, in line with Ind AS 1.

Provision towards guarantee claims in respect of ships
delivered wherever provided/ maintained is based on
technical estimation. For the ships delivered, guarantee
claims are covered by way of insurance policies covering the
guarantee period on case-to-case basis, wherever required

Provisions for anticipated losses are recognized when it
becomes apparent that the total costs expected to fulfi
a contract exceed expected contract revenues. For the
purpose of determining, where appropriate, the amount
of the provision, budgeted contract revenue will include
the forecast revenue that is considered probable, in line
with Ind AS 37 as well as incremental costs. General costs
are not directly attributable to a contract and are therefore
excluded from the Budgeted cost unless they are explicitly
passed on to the counterparty in accordance with the
contract, in line with paragraph 68 of Ind AS 37.

b) Contingent Liabilities and Contingent Assets

In the normal course of business, contingent liabilities may
arise from litigations and other claims against the Company.
Where the potential liabilities have a low probability of
crystallizing or are very difficult to quantify reliably, the
Company treats them as contingent liabilities. Such liabilities
are disclosed in the notes but are not provided for in the
financial statements. Although there can be no assurance
regarding the final outcome of the legal proceedings
Company does not expect them to have a materially
adverse impact on the financial position or profitability
The Company does not recognize a contingent liability but
discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain

future events not wholly within the control of the entity.
The Company does not recognize a contingent asset but
discloses its existence in the financial statements where an
inflow of economic benefits is probable.

3.10 Revenue Recognition

a) Revenue from Operations

Revenue from contracts with customers are measured
based on the consideration specified in a contract with a
customer (ie., transaction price, which is the fair value of
consideration received or receivable)

At the first instance, revenue recognition process involves
identifying the relevant contracts and technical evaluation
of the performance obligations, contained therein.

A single performance obligation is identified in

shipbuilding and/or ship repair segments for each vessel,
due to the high degree of integration and customization of
the various goods and services forming a combined output
that is transferred to the customer over time.

The company choses the appropriate method of measuring
the progress of the completion at the contract inception
for recognizing revenue over time, and are applied
consistently to similar performance obligations under the
respective segments and/or activities carried out thereon.

Recognition of Revenue for a performance obligation
satisfied over time is made only if the company can
reasonably measure its progress towards complete
satisfaction of the performance obligation.

The performance obligations for the shipbuilding and
Ship repair activities carried out by the company are
satisfied over time rather than at a point in time since
the Company''s performance does not create an asset
with an alternative use to the Company ie contractual
restrictions and practical limitations to readily direct that
asset for another use (Even in some cases it will be able to
do so, it can only be done after significant changes and at
significant cost) and it has an enforceable right to payment
for performance completed to date.

Revenue is recognized when the company satisfies
performance obligations by transferring promised goods
and services to the customer over a period of time using
output method based on measurement of physical
performance completed to date in respect of contracts
with customers for ship building and ship repair other than
Indigenous Aircraft Carrier (IAC).

In respect of contract with Indian Navy for construction
of Indigenous Aircraft Carrier, which is partly ''fixed price
basis'' and partly ''cost plus basis'', the revenue:

• from fixed price portion is recognized using
output method .

• by way of mark up from cost plus part of the contract
for procuring and supply of materials and design
outsourcing is recognized when performance
obligations as per the terms of the contract are
fulfilled upon making payments to the suppliers.

• The cost of materials, value of design outsourcing
and other expenses incurred for the vessel which are
recoverable separately from Navy are charged off
to the statement of Profit and Loss when materials
are consumed/activities are performed/expenses are
incurred and are simultaneously grossed up with the
value of work done and recognized as revenue.

In the case of ship repair contracts involving continuous
multiple years maintenance support/ recurring and routine
services, the company opted for time-elapsed output
method, i.e, measuring the progress based on time elapsed
to reporting date, which is representative of the satisfaction
of performance obligation subject to entitlement of
consideration in exchange of goods and/or services.

Based on the technical assessment considering the latest
available information to the company, measuring the
progress towards complete satisfaction of a performance
obligation in the method adopted will be revised/updated
on an ongoing basis.

During the initial stages of a contract, where the company
may not be able to reasonably measure the outcome of
a performance obligation and the company expects to
recover the costs incurred in satisfying the performance
obligation, revenue will be recognized only to the extent
of the costs incurred until such time that it can reasonably
measure the outcome of the performance obligation.

Contract modifications are accounted when additions,
deletions or changes are approved either to the contract
scope or contract price. The accounting for modifications
of contracts involves assessing whether the services added
to an existing contract are distinct and whether the pricing
is at the stand alone selling price. Where the goods or
services added are not distinct, adjustment to revenue is
made on a cumulative catch up basis. Where the goods or

services added are distinct, and such additional goods or
services are priced at standalone selling prices, the contract
modification is accounted for as a separate contract;
whereas if the modification is not priced at standalone
selling price, the same is accounted as a termination of the
existing contract and creation of a new contract.

The Company generally does not recognize any revenue
from additional work until it has been approved by the
customer. When the scope of work has been approved but
the impact on revenue is yet to be valued, the "variable
consideration" requirement (as explained below) will
apply. This entails recognizing revenue in an amount that
is unlikely to be reversed.

If the consideration promised in a contract includes variable
amounts like discounts, rebates, refunds, credits, price
concessions, liquidated damages or other similar items, the
Company estimates the net amount of consideration to which
the Company is entitled in exchange for transferring the
promised goods or services to a customer and accounts for the
same. The payment terms are based on milestones specified
in the respective contracts with customers. On achieving the
specified milestones these payments are released.

Revenue from Supply of Base & Depot Spares is recognized
based on the satisfaction of performance obligation at a
point in time on proof of receipt of goods from customer.

Unlike revenue recognition, amounts billed to the
customer are based on the various milestones reached
under the contract and on acknowledgement thereof by
the customer by means of a contractual document referred
to as a progress billing certificate. Therefore, the amounts
recognized as revenue for a given year do not necessarily
match those billed to or certified by the customer. For
contracts in which the revenue recognized exceeds the
amount billed or certified, the difference is recognized in
as "Contract Asset" under "Other Current Assets", while for
contracts in which the revenue recognized is lower than
the amount billed or certified, the difference is recognized
as "Contract Liability" under "Other Current Liabilities".

Other Operating Revenue with respect to sale of stock
items ,scrap and consultancy income is recognized at a
point in time when the company satisfies performance
obligations and right to receive the income is established
as per terms of the contract by transferring promised
goods and services to the customer.

Management fee is also recognized over a period of time.

b) Government Grants

Government grants are recognized when there is
reasonable assurance that the Company will comply with
the conditions attaching to them and that the grants
will be received.

Government grants are recognized in Statement of Profit
and Loss on a systematic basis over the periods in which
the Company recognizes as expenses, the related costs for
which the grants are intended to compensate. Where the
Grant relates to an asset value, it is recognized as deferred
income, and amortized over the expected useful life of
the asset. Other grants are recognized in the statement
of Profit & Loss concurrent to the expenses to which such
grants relate/ are intended to cover.

Ship Building Financial Assistance (SBFA) is recognized

over a period of time in proportion to the expenses / cost
incurred and classified under "other operating revenue".

Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Company with
no future related costs are recognized in statement of
profit & loss in the period in which they become receivable.

c) Other income

i) Liquidated damages and interest on advances

No income is recognized on (a) interest on advances
given and (b) liquidated damages, where the levies
depend on decisions regarding force majeure
condition of contract. These are accounted for
on completion of contracts and / or when final
decisions are taken.

In the case of contracts entered into for execution of
capital works having long gestation period, where the
extant commercial terms of the contract provides for
provision of extending interest bearing mobilisation
advance to the service provider for mobilising various
resources for timely execution, mobilisation advances
are paid and interest is accounted on accrual basis.

ii) Accounting for insurance claims

(i) Warranty/Builder Risk claims

In the case of guarantee defects covered under
warranty insurance policies or claims under
Insurance Policies taken for ship building and

ship repair works, the insurance claims lodged
are recognized in the financial statements in the
year in which the survey is completed and the
probable amount of settlement is intimated by
the insurance Company.

(ii) Other Insurance Policies

In the case of other Insurance Policies like Asset
Insurance, Transit Insurance, Marine Insurance,
Cash Insurance etc., the claims are recognized
in the the financial statements on settlement of
the claims by way of receipt of the amount from
the Insurance Company.

In the case of Medical insurance, claims are
recognized on due basis, based on the claims
submitted with the insurance company.

Other items of income are accounted as and
when the right to receive such income arises
and it is probable that the economic benefits
will flow to the company and the amount of
income can be measured reliably.

11 Employee benefits

Employee benefits consist of salaries and wages,
contribution to provident fund, superannuation fund,
gratuity fund, towards medical assistance, which are short
term in nature and contribution towards compensated
absences, which is long term in nature.

Post-employment benefit plans
i) Defined Contribution plans

Defined contribution to Employees Pension scheme
for eligible employees is made to National Pension
Scheme (NPS) and are charged as expense as they
fall due. Such benefits are classified as Defined
Contribution Schemes as the Company does not
carry any further obligations, apart from the
contributions made.

The Company makes contributions to the Cochin
Shipyard Employees Mutual Public Welfare Trust
and Employees Medical Assistance Trusts, which
are charged as expense, as and when they fall due.
Such benefits are classified as Defined Contribution
Schemes as the Company does not carry any further
obligations, apart from the contributions made.

Gratuity

The Company provides for gratuity, a defined benefit
retirement plan covering eligible employees. The
fund is managed by the trustees of the Cochin
Shipyard Ltd Group Gratuity Trust .The liability or
asset recognized in the balance sheet in respect
of its defined benefit plan is the present value of
the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The
defined benefit obligation is calculated periodically
by actuaries using the projected unit credit method.

The present value of the said obligation is determined
by discounting the estimated future cash outflows,
using market yields of government bonds that have
terms approximating the terms of the related liability.

The interest income / (expense) are calculated
by applying the discount rate to the net defined
benefit liability or asset. The net interest income /
(expense) on the net defined benefit liability or asset
is recognised in the Statement of Profit and loss.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They
are included in retained earnings in the Statement of
Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined
benefit obligation resulting from plan amendments
or curtailments are recognised immediately in
Statement of profit and loss as past service cost.

Provident Fund and Pension Scheme

The Company also makes contribution towards
provident fund. The provident fund is administered
by the Trustees of the Cochin Shipyard Limited
Employees Contributory Provident Fund Trust. The
rules of the Company''s provident fund administered
by the Trust, require that if the Board of Trustees
are unable to pay interest at the rate declared by
the Government under para 60 of the Employees''
Provident Fund Scheme, 1952, then the deficiency
shall be made good by the Company. The deficiency,
if any assessed by the Company based on actuarial
valuation will be provided for in the accounts.

Other employee benefits
Compensated absences

The Company has a policy on compensated absence
which are both accumulating and non-accumulating
in nature. The expected cost of accumulating
compensated absence is determined by Actuarial
valuation performed by an independent actuary at
each Balance Sheet date using projected unit credit
method on the additional amount expected to be
paid/availed as a result of unused entitlement that
has accumulated at the Balance Sheet date. Expense
on non-accumulating compensated absence is
recognised in the period in which the absences occur.

3.12 Taxes on Income

a) Income tax

Income tax expense comprises current tax expense
and the net change in the deferred tax asset or liability
during the year.

Current and deferred taxes are recognized in Statement of
Profit and Loss, except when they relate to items that are
recognized in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also
recognized in other comprehensive income or directly in
equity, respectively.

The Company has determined that interest and
penalties related to income taxes, including uncertain
tax treatments, do not meet the definition of income
taxes, and therefore accounted for them under Ind AS 37
Provisions, Contingent Liabilities and Contingent Assets.

b) Current tax

Current tax is measured at the amount of tax expected
to be payable or receivable on the taxable income or
loss for the year and any adjustment to the tax payable
or receivable in respect of previous years as determined
in accordance with the provisions of the Income Tax Act,
1961. The amount of current tax payable or receivable is
the best estimate of the tax amount expected to be paid
or received that reflects uncertainty related to income
taxes, if any. It is measured using the tax rates enacted or
substantively enacted at the reporting date.

Current tax assets and current tax liabilities are offset,
when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the
asset and the liability on a net basis.

Deferred tax is recognized using the Balance Sheet
approach. Deferred tax assets and liabilities are recognised
for deductible and taxable temporary differences arising
between the tax base of assets and liabilities and their
carrying amount, except when the deferred tax arises
from the initial recognition of an asset or liability in a
transaction that is not a business combination and affects
neither accounting nor taxable profit or loss at the time of
the transaction.

Deferred tax assets are recognised only to the extent that
it is probable that either future taxable profits or reversal
of deferred tax liabilities will be available, against which the
deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses can be utilised.

The carrying amount of a deferred tax asset shall be
reviewed at the end of each reporting date and reduced
to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised. Unrecognized
deferred tax assets are re-assessed at each reporting
date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred
tax assets to be recovered.

Deferred tax relating to items recognized outside profit
or loss is recognized outside profit or loss (either in other
comprehensive income or in equity).

Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period
and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.

Deferred tax assets and liabilities are off set when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority.

3.13 Operating Segments

Operating segments are defined as components of an
enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating
decision maker, in deciding how to allocate resources and
assessing performance. The Company''s chief operating
decision maker is the Chairman & Managing Director.

The Company has identified business segments (industry
practice) as reportable segments. The business segments
comprise: 1) Ship Building and 2) Ship Repair.

Segment revenue, segment expenses, segment assets and
segment liabilities have been identified to segments on the
basis of their relationship to the operating activities of the
segment. Revenue, expenses, assets and liabilities which
relate to the Company as a whole and are not allocable to
segments on a reasonable basis have been included under
"unallocated revenue / expenses / assets / liabilities".

3.14 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. During the year ended March 31, 2025,
MCA has notified Ind AS 117 - Insurance Contracts and
amendments to Ind As 116 - Leases , relating to sale and
lease back transactions, applicable from April 1, 2024. The
Company has assessed that there is no significant impact
on its financial statements.

On May 9, 2025, MCA notifies the amendments to Ind AS
21- Effects of Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance on assessing
currency exchangeability and estimating exchange
rates when currencies are not readily exchangeable. The
amendments are effective for annual periods beginning
on or after April 1, 2025. The Company is currently
assessing the probable impact of these amendments on its
financial statements.

a) Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian
Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Kochin Air Products (0.30 hectare) and (b) land
leased to Kerala State Electricity Board (0.47 hectare).

b) Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value
is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

c) Freehold land includes landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy
No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2,
8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk,
Ernakulam Dist, Kerala provided as security for issue of Tax free bonds.

d) The company has bearer plants in its premises and other sites which generates nominal income .Cost of such bearer plants
cannot be reliably measured and hence these plants were not capitalized.

e) Title deeds of all immovable properties (ie freehold land) are held in the name of the Company.

f) In the case of following properties where the Company is the lessee, lease agreements are duly executed in favour of the lessee
with the following exceptions:

1. The Company has taken 8.12 HA of land (re-measured as 8.1164HA) and 15 HA of water body on lease from Cochin Port
Authority ( CoPA) on 12 April 2013 (1st phase) .CSL has also taken 8.134 HA of additional land area on lease from CoPA on
16 Nov 2017 (2nd phase).Two lease agreements (ie 1st phase allotment of land/waterbody and 2nd phase allotment of
land) were entered between CSL & CoPA and both lease deeds have not been registered.

2. The company has executed concessionaire agreements with the Mumbai Port Trust(MBPT) and Syama Prasad Mukherjee
Port (SMPT) to Upgrade,Operate and Manage Ship Repair facility at Hughes Dry Dock and specified berths at Indira Dock
of MBPT and two dry docks and Berth No.6 of Netaji Subash Dock of SMPT respectively.

The project site at MBPT is taken on license for 29 years. The license agreement is yet to be registered, as a request
submitted for waiver of the stamp duty to the Government of Maharashtra is under consideration.

The project site at Syama Prasad Mukherjee Port is taken on license for 30 years .As license agreement does not attract
stamp duty and registration charges in West Bengal ,Concession Agreement with SMPT has not been registered .

g) The Right to use of land and ship repair facility represents the upfront fee paid to Cochin Port Trust towards setting up of
International Ship Repair Facility (ISRF) project, to be amortised over the period of lease which was further extended based on
the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09, 2018,
the lease period of 30 years effectively starts from this date.

h) Staff quarters at Kolkata held in the name of Syama Prasad Mookerjee Port Authority has been allotted to CSL. Lease agreement
is yet to be executed.

i) Registration is pending in case of following leasehold properties:

j) As at 31 March 2025, plant and equipment with a carrying amount of H403.40 lakhs (previous year H465.55 lakhs) were
temporarily idle, but the company plans to operate the assets in FY 2025-26.

k) The Gross carrying value of assets of H17918.81 lakhs (previous year H1 2,938.36 Lakhs) have been fully depreciated, but
still are in use.

l) Additions on Plant & Equipments includes capital expenditure on Research & development relating to R&D centre amounting
to H2.83 lakhs (previous year H25.95 lakhs relating to welding technology)

m) During the financial year the Company has capitalised major Projects "International Ship Repair Facility " and "New Dry Dock" for
an amount of H79344.26 lakhs and H131938.92 lakhs respectively.

Depreciation on these assets has been calculated considering the useful lives as determined by the management based on
technical estimates made. The adopted useful lives are detailed in the table below;

lerms & Rights attached to Equity shares: Ihe Company has only one class or equity shares having a face value of per share which
is fully paid up. Equity shareholders are eligible for one vote per share held, and are entitled to dividends as and when declared
by the Company. Interim dividend is paid as and when declared by the Board. Final dividend proposed by the Board of Directors
is subject to approval/regularisation by the share holders in the Annual General meeting. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion
to their shareholding.

Sub-division & Other information:

On 10 Jan 2024, the Company sub-divided every 1 (one) Equity Share of the nominal/face value of H10/- each into 2 (Two) Equity Share
of the nominal/face value of H5/- each.

In October 2024, the Government of India sold 1,30,15,689 (4.95%) equity shares out of its 19,16,86,928 (72.86%) equity shares
held in Cochin Shipyard Limited (CSL) by way of Offer for Sale (OFS) through the Stock Exchange mechanism in accordance with
the applicable SEBI guidelines. Consequently, the Government of India''s shareholding in Company stands at 17,86,71,239 (67.91%)
equity shares as on March 31, 2025.

Movement or eacn item in utner Equity is detailed in Statement or Changes in Equity

Capital Reserve: Capital reserve includes H263.56 lakhs being restoration charges received from M/s. Indian Oil Corporation Ltd for
laying pipe line through the Company''s land.

Capital Redemption Reserve: Capital Redemption Reserve of W 12353.76 lakhs includes W 11914.20 lakhs being reserves created
on redemption of preference shares and W 439.56 lakhs being a sum equal to the nominal value of the shares bought back, which will
be utilised for the purpose defined under the Companies Act 2013.

Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The company had completed
the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of H10 each at premium ( H93929.76 lakhs).
Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting H777.93 lakhs has been debited in
Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.

General Reserve: General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act,
2013. This is a free reserve and can be utilised for any general purpose like issue of bonus shares, payment of dividend, buy back of
shares etc. The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in
certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the Companies
Act 2013, the requirements to transfer profits to General reserve is not mandatory.

Cash flow Hedge Reserve: Cash flow hedge reserve represents the effective portion of change in the fair value of designated
hedging instruments recognised in the Other Comprehensive Income. (Refer Note No. 45)

Interim dividend : During the year, the Company paid interim dividends of H4.00 per equity share of face value of H5 and H3.5 per equity
share of face value of H5, as recommended at the board meetings held on November 7, 2024 and February 06, 2025 respectively.

Proposed dividend : The Board of Directors of the Company have recommended a final dividend of H2.25 per equity share of face
value of H5 for the financial year ended March 31, 2025 at the Board meeting held on May 15, 2025. This is subject to approval/
regularisation by the share holders in the Annual General meeting.

Tax Free Infrastructure Bond Series 2013-14

a) Tranche 1: 1000 bonds of face value of ?10 lakhs totalling ?10000 lakhs with interest rate of 8.51% payable annually , redeemable
at par, redeemed on 02nd December 2023.

b) Tranche 2: 230 bonds of face value of ?10 lakhs totalling ? 2300 lakhs with interest rate of 8.72% payable annually, redeemable
at par, due for redemption on 28th March 2029 .

These bonds are secured against the landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30
ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2,
8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk,
Ernakulam Dist, Kerala.

Utilisation : Out of the issue proceeds of ?12300 lakhs received, the Company has fully utilised/adjusted funds towards various
expenditure incurred on International Ship Repair Facility (ISRF) project.

Difference between carrying amounts and fair values of financial liabilities of borrowings is not significant in each of the year presented.

1. Revenue is recognized when the company satisfies performance obligations by transferring promised goods and services to
the customer over a period of time using output method based on measurement of physical performance completed to date.
Output method faithfully depicts the Company''s performance towards complete satisfaction of the performance obligation and
gives a clear picture of Company''s efforts and hence the same is being adopted to depict the performance completed to date

2. Refer Note No 43 on Ind AS 115 "Revenue from Contract with Customers".

3. Out of the Revenue from Operations, H 53,436.82 lakhs (H 23140.03 lakhs in previous year) pertain to revenue from export orders.

4. The Company has considered the lock down period due to COVID 19 & Gol circular dated May 13, 2020, which ever is applicable
to the projects and Kerala Flood natural calamity 2018 as Force Majeure period for computation of Liquidated Damages while
calculating Revenue from operations.

5. The Company is executing shipbuilding contracts with the Andaman & Nicobar (A&N) Administration for the construction of two
1200-passenger vessels (yard nos. SH.0023 and SH.0024). The contractual delivery dates, as extended, have expired for both
vessels as on 29 April 2023 for vessel SH.0023, and 30 October 2023 for vessel SH.0024.

The two vessels are customized and designed for specific operations between Andaman Islands and Main Land. Subsequently
based on a request from the A&N Administration, the Company has abated delivery activity, as the Administration has sought
reallocation of the vessels to other prospective buyers. However, such reallocation would necessitate significant technical
modifications and cost, and the vessels, in their current state, are considered to have no alternative use.

Given that the Company continues to have a valid and enforceable contract with the A&N Administration, and there is no current
mutual termination or novation of the contract, no additional provision for LD has been recognized beyond 29 April 2023 and 30
October 2023, respectively, for SH.0023 and SH.0024 for reason of abated delivery at the request of the buyer. In accordance
with the terms of the contract and based on prudent estimates, the Company has recognized provision for liquidated damages
(LD) up to the aforementioned dates.

The Company continues to monitor developments related to this contract and will review its accounting estimates and
provisioning requirements in subsequent periods as more information becomes available.

The cumulative percentage of completion for the two vessels as on 31.03.2025 is 54.84 percent for SH.0023 and 55.19 percent
for SH.0024. The total liquidated damages for SH.0023 is H. 11814.08 lakhs and for SH.0024 is H. 9756.34 lakhs up to the financial
year 2024-25. The Company has recognized revenue to the tune of H. 16943.66 lakhs towards SH.0023 and H. 17156.89 lakhs
towards SH.0024 upto 31.03.2025 after considering the liquidated damages.

6. The Government of India provides Ship Building Financial Assistance (SBFA) to promote domestic shipbuilding. This scheme is

aimed at compensating the cost incurred in the construction of vessels and not for any operational losses.

In accordance with the SBFA policy guidelines, financial assistance is available only for vessels that are constructed and delivered
within the stipulated period and are covered under an in-principle approval obtained from the Directorate General of Shipping.
The Company recognizes SBFA income over the construction period of the eligible vessels, in proportion to the cost incurred,
provided the conditions under the policy are met or are reasonably expected to be met.

Where there is uncertainty regarding compliance with any of the policy conditions, such as delays in construction or delivery
timelines resulting in non-fulfilment of eligibility criteria, the Company either does not recognize the SBFA income or
derecognizes the income previously recognized, as appropriate. Such contingencies are assessed regularly, and necessary
accounting adjustments are made to reflect the revised expectations.

During the current financial year based on the amendment by MoPSW granting additional time for delivery of vessels affected
by the Covid pandemic, the Company has re-recognised the financial assistance amounting to H.822.29 Lakhs in respect of
delivered vessels as income for the current year. Out of claim made to the Government of the re-recognised of H. 822.29 lakhs,
the Company has realized H.404.03 Lakhs and the balance amount of H. 418.26 lakhs is yet to be realised.

With regard to vessels under construction, the Company has recognized financial assistance income of H.10,309.45 lakhs towards
Ship Building Financial Assistance from Govt. of India, in order to compensate the cost incurred by the company in building the
vessels. Further, the Company has reversed H. 890.01 lakhs due to revision in expected delivery dates of the vessels which
resulted in non-fulfilment of the stipulated conditions under the SBFA policy. As on the reporting date, the cumulative income
accrued amounting to H. 13546.03 lakhs account of financial assistance is subject to the fulfilment of conditions stipulated in
the Guidelines for Shipbuilding Financial Assistance Policy (SBFAP), as amended from time to time.

7. Cochin Shipyard Ltd (CSL) has entered into an Agreement with the Andaman and Nicobar Administration to commence its
operations at Marine Dockyard, at Port Blair, a facility that is currently being operated directly by the A&N Administration.
Management fee on pro rata basis is accounted based on this agreement. In addition to Management fee, Consultancy fee for
technical assistance in preparation of DPR relating to Augmentation & Modernisation plan for Marine Dockyard is also accounted
as per the agreement with A&N Administration. Under the ambit of this Agreement signed on 28 Nov 2019, CSL shall assist the
Administration to set up a Ship repair ecosystem at A&N islands. CSL shall also focus efforts towards Skill Development in the
Islands in consultation with the Administration and Technical Institutions located in the Islands.

8. Disclosure pursuant to CAG audit observation

The company reassesses the measurement progress of its performance obligation under the output method as mandated
by Ind AS 115 at every reporting date. During the year, the company noticed that on application of Ind AS 21, the existing
measurement resulted in variations in faithful representation of revenue in the case of export contracts denominated in foreign
currency. In order to address the same, the Company refined its quantification approach for the said contracts. Revenue is
recognised by applying the physical completion percentage on the total transaction price, which the company is entitled to,
without bifurcating between material and service portions. The effect of change in the quantification measure in the current
year has resulted in increase in revenue from operations of about Rs. 11808.65 lakhs. The Company intends to consistently
adopt this measurement technique in recognising revenue for contracts involving similar performance obligations.

Contribution to Provident Fund and Family Pension Fund includes provident fund inspection and administration charges W 28.07 lakhs
(previous year W 27.92 lakhs).

Salaries, Wages, bonus/exgratia and allowances includes provision for encashment of half pay compensated absences for workmen
amounting to W 103.82 lakhs (previous year W 65.87 lakhs).

The employee benefits accruing to the employees on deputation from Cochin Port Trust and Mumbai Port Trust are being accounted
based on demands received from Cochin Port Trust & Mumbai Port Trust as per tripartite agreement between the Company, Cochin
Port Trust & Mumbai Port Trust and the recognised Trade unions of the Port and not based on actuarial valuation except for gratuity
which is actuarially valued.

Post-employment obligations
Provident fund

Provident Fund for eligible employees is managed by the Company through a trust in line with the Provident Fund and Miscellaneous
Provision Act,1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the
employees and employer @12% of basic salary (including Dearness Allowance) together with the interest accumulated thereon are
payable to employees at the time of separation from the Company or retirement whichever is earlier.

The benefits vests immediately on rendering of the services by the employee. The contribution is charged to Statement of Profit and
Loss of the year when the contributions to the respective funds are due in accordance with relevant statute. Employer''s contribution
to Provident Fund & Pension fund is H.2076.29 Lakhs for the year 2024-25 (H.1693.55 Lakhs for the year 2023-24). The minimum
interest rate payable by the trust to the beneficiaries every year is notified by the Government. The Company has an obligation to
make good the shortfall, if any, between the return from the investments of the trust (including investment risk fall) and the notified
interest rate, which is determined on the basis of actuarial valuation.

The Company has obtained report on the determination and disclosure of interest rate Guarantee, valuation of Assets & Liabilities as
per Ind AS 19 of Employees Benefits relating to Exempt Provident Fund for the period ended 31st March 2025.

a) USHUS is a start-up support program of CSL in association with Indian Institute of Management Kozhikode (IIM K) & Indian
Institutes of Technology Madras (IIT) to augment the Government of India''s initiatives to encourage and develop an ecosystem
in India to support Maritime Start-ups. As part of this program maritime start-ups will receive seed funds from CSL as grants/
investments. IIMK LIVE & IIT Madras will review and recommend the proposals received under this scheme for investment by
CSL. Fee for their services amounts to H.26.50 lakhs current year (Previous Year - H 7.00 lakhs). H.105.00 Lakhs has been disbursed
to 9 start ups identified by IIM K under seed funding scheme during the F.Y 2024-25.

b) M/s Boston Consulting group was entrusted with preparation of detailed report for Setting up of Ship repair cluster in Kochi
(Phase-II) with MoPSW''s Maritime India Vision-2030 for an amount of H 343.00 lakhs. M/s Boston Consulting group is also
entrusted for preparation of detailed report for Setting up of Ship repair business in Vadinar, Gujrat in India for an amount of
H 343.00 lakhs. H 686.00 lakhs has been charged to Profit and loss account during current year.

c) Design, development, Construction activities of Fully Indigenous Autonomous Surface Vessel (ASV) Pilot Project under the
Aatma Nirbhar Bharat procurement model. The project is being executed with a total estimated project cost of ?4000.00 lakhs.
The Ministry of Ports, Shipping and Waterways (MoPSW) has sanctioned a grant-in-aid of ?2000.00 lakhs towards the design and
development of this project under R&D (Shipping) Scheme.

Company has received grant of H 925.07 lakhs during the year, out of which H 314.28 lakhs was utilized towards ASV project
and balance H 610.78 lakhs is lying under Central Nodal Account maintained by the Sagarmala Development Corporation
Limited(SDCL). In addition to the grant amount utilised H 314.28 lakhs, Company has also incurred overhead and other
expenditure of H 41.20 lakhs towards the project .Hence the cumulative cost incurred towards ASV project for the year is
H 355.48 lakhs and same has been charged as Research & development expenditure in the Statement of Profit and Loss for the
year ended 31 March 2025.

d) The Company is engaged in a pilot Research and Development project for construction of a Hydrogen Fuel Cell Electric
Vessel (HFCEV), pursuant to approval by the Research Committee of the Ministry of Ports, Shipping and Waterways (MoPSW),
Government of India. A work order was issued to the Company wherein 75% of the project cost being funded by the MoPSW,
under the ambit of the National Hydrogen Mission and Atmanirbhar Bharat initiative. All the assets acquired from the grant will
be the property of the Government of India and the funds released for such projects or schemes in one or more installments are
not treated as Grants-in-aid in the books of the implementing agency.

In the parallel, the Company also entered into a Memorandum of Understanding (MoU) with the Inland Waterways Authority
of India (IWAI) to develop, design, construct, and supply the vessel, with an intention to transfer title and ownership through a
separate agreement.

During the previous financial year (FY 2023-24), based on management''s expectations of an near-term sale to IWAI, the cost
incurred (net of grant received) was presented under Non-Current Assets. However, as of 31 March 2025, no further progress
has been made in formalizing the sale arrangement, and the vessel continues to remain under demonstration phase. Given
the absence of reasonable certainty regarding the timing and realisation of the proceeds from IWAI , the management has
reassessed the accounting treatment.

Accordingly, in compliance with the principles of prudence the Company has recognized the net cost incurred H 925.14 lakhs (ie.
cost incurred less grant received) as Research and Development (R&D) expenditure in the Statement of Profit and Loss for the
year ended 31 March 2025.Cost incurred during 2024-25 is H 837.78 lakhs.

Financial Risk Management Objective and Policies:

The Company''s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables
and advances from customers. The Company''s principal financial assets include Investment, loans and advances, trade and other
receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk
and liquidity risk. The Company''s senior management oversees the management of these risks. The Board provides written principles
for overall risk management as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, the
use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity. The Company
does not enter into or trade financial instruments, including derivatives for speculative purposes.

Market Risk

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices.
Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, being mainly commodity price
risk. Financial Assets affected by market risk include loans and advances, deposits and derivative financial instruments.

A. Interest rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company''s exposure to the risk of changes in market interest rates is minimal since the exposure
relates primarily to the Company''s long-term debt obligations of redeemable non-convertible bonds with fixed interest rates as
disclosed in Note 23 . With the current profile of fixed rate borrowing, the company is not sensitive to interest rate fluctuations.

B. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s
operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the
board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis. The company
manages the net foreign currency risk mainly by entering into forward contracts with the bank as the counter party. The
disclosures of outstanding forward contract as on reporting date is given in Note 45.

Note 63. The Company has entered agreement with Andaman & Nicobar Administration on a long term license basis for a period of
30 years from November 2019 onwards for developing, designing, constructing, modernising, operating, maintaining and managing
the existing shiprepair facility which is named as CSL-AN Ship Repair Unit (CANSRU).

Note 64. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

Note 65. 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. 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.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide
any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

Note 66. The company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence disclosures
relating to it are not applicable.

Note 67. In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at
the close of the year, liability is estimated and provided based on the work done.

Note 68. The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long
term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

Note 69. Fig ures in brackets denote negative figures.

Note 70. Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year presentation.

The accompanying notes are an integral part of these financial statements
As per our report attached

For M/s Anand & Ponnapan For and on behalf of Board of Directors

Chartered Accountants
(Firm Registration No.000111S)

SYAMKAMAL N BEJOY BHASKER

Company Secretary Director (Technical)

(Membership Number: A25337 ) DIN - 08103825

C. Krishnan Menon JOSE V J MADHU S NAIR

Partner Director (Finance) & Chief Financial Officer Chairman and Managing Director

(Membership Number: 074736) DIN - 08444440 DIN - 07376798

Kochi dated May 15, 2025 Kochi dated May 15, 2025

---

Mar 31, 2024

3.9 Provisions , Contingent Liabilities and Contingent

assets

a) Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions (excluding retirement benefits and compensated leave) are not discounted to its present value and are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. These are reviewed at each reporting date adjusted to reflect the current best estimates.

Warranty obligations included in this type of provisions are not treated as a separate performance obligation, unless the customer has the option of contracting the warranty separately, therefore they are recognized in accordance with Ind AS 37. These provisions are classified as current liabilities since they relate to the operating construction projects cycle, in line with Ind AS 1.

Provision towards guarantee claims in respect of ships delivered wherever provided/ maintained is based on technical estimation. For the ships delivered, guarantee claims are covered by way of insurance policies covering the guarantee period on case-to-case basis, wherever required.

Provisions for anticipated losses are recognized when it becomes apparent that the total costs expected to fulfil a contract exceed expected contract revenues. For the purpose of determining, where appropriate, the amount of the provision, budgeted contract revenue will include the forecast revenue that is considered probable, in line with Ind AS 37 as well as incremental costs. General costs are not directly attributable to a contract and are therefore excluded

from the Budgeted cost unless they are explicitly passed on to the counterparty in accordance with the contract, in line with paragraph 68 of Ind AS 37.

b) Contingent Liabilities and Contingent Assets

In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, the Company treats them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, Company does not expect them to have a materially adverse impact on the financial position or profitability. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The Company does not recognize a contingent asset but discloses its existence in the financial statements where an inflow of economic benefits is probable.

3.10 Revenue Recognition

a) Revenue from Operations

Revenue from contracts with customers are measured based on the consideration specified in a contract with a customer (ie., transaction price, which is the fair value of consideration received or receivable)

At the first instance, revenue recognition process involves identifying the relevant contracts and technical evaluation of the performance obligations, contained therein.

A single performance obligation is identified in shipbuilding and/or ship repair segments for each vessel, due to the high degree of integration and customization of the various goods and services forming a combined output that is transferred to the customer over time.

The company choses the appropriate method of measuring the progress of the completion at the contract inception for recognizing revenue over time,

and are applied consistently to similar performance obligations under the respective segments and/or activities carried out thereon.

Recognition of Revenue for a performance obligation satisfied over time is made only if the company can reasonably measure its progress towards complete satisfaction of the performance obligation.

The performance obligations for the shipbuilding and Ship repair activities carried out by the company are satisfied over time rather than at a point in time since the Company''s performance does not create an asset with an alternative use to the Company ie contractual restrictions and practical limitations to readily direct that asset for another use (Even in some cases it will be able to do so, it can only be done after significant changes and at significant cost) and it has an enforceable right to payment for performance completed to date.

Revenue is recognized when the company satisfies performance obligations by transferring promised goods and services to the customer over a period of time using output method based on measurement of physical performance completed to date in respect of contracts with customers for ship building and ship repair other than Indigenous Aircraft Carrier (IAC).

In respect of contract with Indian Navy for construction of Indigenous Aircraft Carrier, which is partly ''fixed price basis'' and partly ''cost plus basis'', the revenue.

• From fixed price portion is recognized using

output method .

• By way of mark up from cost plus part of the contract for procuring and supply of materials and design outsourcing is recognized when performance obligations as per the terms of the contract are fulfilled upon making payments to the suppliers.

• The cost of materials, value of design outsourcing and other expenses incurred for the vessel which are recoverable separately from Navy are charged off to the statement of Profit and Loss when materials are consumed/ activities are performed/expenses are incurred and are simultaneously grossed up with the value of work done and recognized as revenue.

In the case of ship repair contracts involving continuous multiple years maintenance support/ recurring and routine services, the company opted for time-elapsed output method, i.e, measuring the progress based on time elapsed to reporting date, which is representative of the satisfaction of performance obligation subject to entitlement of consideration in exchange of goods and/or services.

Based on the technical assessment considering the latest available information to the company, measuring the progress towards complete satisfaction of a performance obligation in the method adopted will be revised/updated on an ongoing basis.

During the initial stages of a contract, where the company may not be able to reasonably measure the outcome of a performance obligation and the company expects to recover the costs incurred in satisfying the performance obligation, revenue will be recognized only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Contract modifications are accounted when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the stand alone selling price. Where the goods or services added are not distinct, adjustment to revenue is made on a cumulative catch up basis. Where the goods or services added are distinct, and such additional goods or services are priced at standalone selling prices, the contract modification is accounted for as a separate contract; whereas if the modification is not priced at standalone selling price, the same is accounted as a termination of the existing contract and creation of a new contract.

The Company generally does not recognize any revenue from additional work until it has been approved by the customer. When the scope of work has been approved but the impact on revenue is yet to be valued, the "variable consideration" requirement (as explained below) will apply. This entails recognizing revenue in an amount that is unlikely to be reversed.

If the consideration promised in a contract includes variable amounts like discounts, rebates, refunds, credits, price concessions, liquidated damages or other similar items, the Company estimates the net amount of consideration to which the Company is entitled in exchange for transferring the promised goods or services to a customer and accounts for the same. The payment terms are based on milestones specified in the respective contracts with customers. On achieving the specified milestones these payments are released.

Revenue from Supply of Base & Depot Spares is recognized based on the satisfaction of performance obligation at a point in time on proof of receipt of goods from customer.

Unlike revenue recognition, amounts billed to the customer are based on the various milestones reached under the contract and on acknowledgement thereof by the customer by means of a contractual document referred to as a progress billing certificate. Therefore, the amounts recognized as revenue for a given year do not necessarily match those billed to or certified by the customer. For contracts in which the revenue recognized exceeds the amount billed or certified, the difference is recognized in as "Contract Asset" under "Other Current Assets", while for contracts in which the revenue recognized is lower than the amount billed or certified, the difference is recognized as "Contract Liability" under "Other Current Liabilities".

Other Operating Revenue with respect to sale of stock items and scrap is recognized at a point in time when the company satisfies performance obligations and right to receive the income is established as per terms of the contract by transferring promised goods and services to the customer.

Management fee is also recognized over a period of time.

b) Government Grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in Statement of Profit and Loss on a systematic basis over the periods

in which the Company recognizes as expenses, the related costs for which the grants are intended to compensate. Where the Grant relates to an asset value, it is recognized as deferred income, and amortized over the expected useful life of the asset. Other grants are recognized in the statement of Profit & Loss concurrent to the expenses to which such grants relate/ are intended to cover.

Ship Building Financial Assistance (SBFA) is

recognized over a period of time in proportion to the expenses / cost incurred and classified under "other operating revenue".

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in statement of profit & loss in the period in which they become receivable.

c) Other income

i) Liquidated damages and interest on advances

No income is recognized on (a) interest on advances given and (b) liquidated damages, where the levies depend on decisions regarding force majeure condition of contract. These are accounted for on completion of contracts and / or when final decisions are taken.

In the case of contracts entered into for execution of capital works having long gestation period, where the extant commercial terms of the contract provides for provision of extending interest bearing mobilisation advance to the service provider for mobilising various resources for timely execution, mobilisation advances are paid and interest is accounted on accrual basis.

ii) Accounting for insurance claims

(i) Warranty/Builder Risk claims

In the case of guarantee defects covered under warranty insurance policies or claims under Insurance Policies taken for ship building and ship repair works, the insurance claims lodged are recognized in the financial statements in the year in which the survey is completed and the probable amount of settlement is intimated by the insurance Company.

(ii) Other Insurance Policies

In the case of other Insurance Policies like Asset Insurance, Transit Insurance, Marine Insurance, Cash Insurance etc., the claims are recognized in the the financial statements on settlement of the claims by way of receipt of the amount from the Insurance Company.

In the case of Medical insurance, claims are recognized on due basis, based on the claims submitted with the insurance company.

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.

3.11 Employee benefits

Employee benefits consist of salaries and wages, contribution to provident fund, superannuation fund, gratuity fund, towards medical assistance, which are short term in nature and contribution towards compensated absences, which is long term in nature.

Post-employment benefit plans

i) Defined Contribution plans

Defined contribution to Employees Pension scheme for eligible employees is made to National Pension Scheme (NPS) and are charged as expense as they fall due. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made.

The Company makes contributions to the Cochin Shipyard Employees Mutual Public Welfare Trust and Employees Medical Assistance Trusts, which are charged as expense, as and when they fall due. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made.

ii) Defined benefit plans

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The fund is managed by the trustees of the Cochin Shipyard Ltd Group Gratuity Trust .The liability or

asset recognized in the balance sheet in respect of its defined benefit plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated periodically by actuaries using the projected unit credit method.

The present value of the said obligation is determined by discounting the estimated future cash outflows, using market yields of government bonds that have terms approximating the terms of the related liability.

The interest income / (expense) are calculated by applying the discount rate to the net defined benefit liability or asset. The net interest income / (expense) on the net defined benefit liability or asset is recognised in the Statement of Profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in Statement of profit and loss as past service cost.

Provident Fund and Pension Scheme

The Company also makes contribution towards provident fund. The provident fund is administered by the Trustees of the Cochin Shipyard Limited Employees Contributory Provident Fund Trust. The rules of the Company''s provident fund administered by the Trust, require that if the Board of Trustees are unable to pay interest at the rate declared by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952, then the deficiency shall be made good by the Company. The deficiency, if any assessed by the Company based on actuarial valuation will be provided for in the accounts.

Other employee benefits Compensated absences

The Company has a policy on compensated absence which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absence is determined by Actuarial valuation performed by an independent actuary at

each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absence is recognised in the period in which the absences occur.

3.12 Taxes on Income

a) Income tax

Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.

Current and deferred taxes are recognized in Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

b) Current tax

Current tax is measured at the amount of tax expected to be payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years as determined in accordance with the provisions of the Income Tax Act, 1961. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using the tax rates enacted or substantively enacted at the reporting date.

Current tax assets and current tax liabilities are offset, when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.

c) Deferred tax

Deferred tax is recognized using the Balance Sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and

liabilities and their carrying amount, except when the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

Deferred tax assets are recognised only to the extent that it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets and liabilities are set off when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

3.13 Operating Segments

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Company''s chief operating decision maker is the Chairman & Managing Director.

The Company has identified business segments (industry practice) as reportable segments. The business segments comprise: 1) Ship Building and 2) Ship Repair.

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on a reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

3.14 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

a) Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Kochin Air Products (0.30

hectare) and (b) land leased to Kerala State Electricity Board (0.47 hectare).

b) Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

c) Freehold land includes landed properties of the Company

admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12

ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12

ares in Sy No. 714/2, 8.90 ares in Sy No. 714/4 and 10.93

ares in Sy No. 714/5 of land all are lying contiguously in

Elamkulam village, Kanayannur taluk, Ernakulam Dist, Kerala provided as security for issue of Tax free bonds.

d) The company has bearer plants in its premises and other sites which generates nominal income .Cost of such bearer plants cannot be reliably measured and hence these plants were not capitalized.

e) Title deeds of all immovable properties(ie freehold land) are held in the name of the Company.

f) In the case of following properties where the Company is the lessee, lease agreements are duly executed in favour of the lessee with the following exceptions:

1. The Company has taken 8.12 HA of land (re-measured as 8.1164HA) and 15 HA of water body on lease from Cochin Port Authority ( CoPA) on 12 April 2013 (1st phase) .CSL has also taken 8.134 HA of additional land area on lease from CoPA on 16 Nov 2017 (2nd phase).Two lease agreements (ie 1st phase allotment of land/waterbody and 2nd phase allotment of land)

were entered between CSL & CoPA and both lease deeds have not been registered.

2. The company has executed concessionaire agreements with the Mumbai Port Trust(MBPT) and Syama Prasad Mukherjee Port (SMPT) to Upgrade,Operate and Manage Ship Repair facility at Hughes Dry Dock and specified berths at Indira Dock of MbPT and two dry docks and Berth No.6 of Netaji Subash Dock of KoPT respectively.

The project site at MbPT is taken on license for 29 years. The license agreement is yet to be registered, as a request submitted for waiver of the stamp duty to the Government of Maharashtra is under consideration.

The project site at Syama Prasad Mukherjee Port is taken on license for 30 years .As license agreement does not attract stamp duty and registration charges in West Bengal , Concession Agreement with SMPT has not been registered .

g) The Right to use of land and ship repair facility represents the upfront fee paid to Cochin Port Trust towards setting up of International Ship Repair Facility (ISRF) project, to be amortised over the period of lease which was further extended based on the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09, 2018, the lease period of 30 years effectively starts from this date.

h) As at 31 March 2024, plant and equipment with a carrying amount of H465.55 lakhs were temporarily idle, but the company plans to operate the assets in FY 2024-25.

i) The Gross carrying value of assets of H12938.36 Lakhs have been fully depreciated, but still are in use.

j) Plant & Equipments includes capital expenditure on Research & development relating to equipments for welding technology amounting to H25.95 lakhs.

Capital Reserve: Capital reserve includes H263.56 lakhs being restoration charges received from Ms Indian Oil Corporation Ltd for laying pipe line through the Company''s land.

Capital Redemption Reserve: Capital Redemption Reserve of H12353.76 lakhs includes H11914.20 lakhs being reserves created on redemption of preference shares and H439.56 lakhs being a sum equal to the nominal value of the shares bought back, which will be utilised for the purpose defined under the Companies Act 2013.

Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The company had completed the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of H10 each at premium ( H93929.76 lakhs). Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting H777.93 lakhs has been debited in Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.

Debenture Redemption Reserve: The Company was hitherto creating Debenture Redemption Reserve at 25% of the value of bonds issued by the company over the maturity period of such debentures in accordance with Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 and as per SEBI (Issue and Listing of Debt Securities) Regulations, 2008. As per the amendment made to the Companies (Share Capital and Debentures) Rules, 2014 notified vide Notification No. G.S.R. 574(E) by the Ministry of Corporate Affairs, the company is not required to create Debenture Redemption Reserves in respect of the bonds issued by it. However, the Debenture Redemption Reserve already created up to 30.09.2019, H1668.44 Lakhs, was retained in the books till the time of redemption of the Tax Free Infrastructure Bond Series 2013-14 (Tranche I) on 2nd December 2023. After this, entire balance was transferred to retained earnings.

General Reserve: General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act, 2013. This is a free reserve and can be utilised for any general purpose like issue of bonus shares, payment of dividend, buy back of shares etc. The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory.

Cash flow Hedge Reserve: Cash flow hedge reserve represents the effective portion of change in the fair value of designated hedging instruments recognised in the Other Comprehensive Income. (Refer Note No. 47)

Interim dividend: During the year, the Company paid interim dividends of H8 per equity share of face value of H10 (Pre sub-division) and H3.5 per equity share of face value of H5 (Post sub- division), as recommended at the board meetings held on Nov 7, 2023 and Jan 30, 2024 respectively.

Proposed dividend: The Board of Directors of the Company have recommended a final dividend of H2.25 per equity share of face value of H5 for the financial year ended March 31, 2024 at the Board meeting held on May 24, 2024. This is subject to approval/ regularisation by the share holders in the Annual General meeting.

*R&D and New initiatives includes the following:

• National Centre of Excellence for Green Port & Shipping (NCoEGPS) is a major initiative by the Ministry of Ports, Shipping and Waterways (MoPSW) towards providing greener solutions. The Energy and Resources Institute (TERI) is the knowledge and implementation partner for this project. The centre aims to develop a regulatory framework and alternate technology adoption road map for Green Shipping to foster carbon neutrality and circular economy (CE) in shipping sector in India. MoPSW , Deendayal Port Authority Kandal, Paradip Port Authority Paradip, V O Chidambaranar Port authority Thoothukudi & Cochin Shipyard Ltd have partnered to develop NCoEGPS by providing funding support for infrastructure development and supporting research and capacity-building activities/initiatives for 5 years. During FY 22-23, CSL has paid H475.00 lakhs to TERI which has been reported as R&D expenses .

• USHUS is a start-up support program of CSL in association with Indian Institute of Management Kozhikode (IIM K) & Indian Institutes of Technology Madras (IIT) to augment the Government of India''s initiatives to encourage and develop an ecosystem in India to support Maritime Start-ups. As part of this program maritime start-ups will receive seed funds from CSL as grants/ investments. IIMK LIVE & IIT Madras will review and recommend the proposals received under this scheme for investment by CSL. Fee for their services amounts to H7.00 lakhs(Previous Year - H18.50 lakhs). H90 Lakhs has been disbursed to five start ups identified by IIM K under seed funding scheme during the F.Y 2023-24.

• M/s Boston Consulting group was entrusted with preparation of detailed report for Setting up of Ship repair cluster (Mumbai & Kochi) in India in line with MoPSW''s Maritime India Vision-2030 for an amount of H686.00 lakhs out of which H343.00 lakhs has been charged to Profit and loss account during current year. M/s Boston Consulting group is also entrusted for preparation of detailed report for Setting up of Ship repair business in Vadinar, Gujrat in India for an amount of H137.00 lakhs.

C. Details of transaction price allocated to unsatisfied/ partially satisfied performance obligations:

Aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period amounts to H15,50,362.12 lakhs (excluding Cost Plus Part of IAC contract).The amount of transaction price relating to unsatisfied performance obligation that are part of a contract that has an original expected duration of one year or less has not been included in the above disclosure as permitted under Ind AS 115. Further the estimate of the transaction price as above would not include any estimated amounts of variable consideration that are constrained. Management expects that 25.21 % of transaction price allocated to unsatisfied/ partially satisfied contracts as of 31.03.2024, as stated above, will be recognised as revenue during FY 2024-25 and the remaining thereafter.

During the year ended March 31,2024 the Company recognised revenue of H1,17,991.94 lakhs arising from opening Contract Liability as of April 01,2023.

54. FINANCIAL INSTRUMENTS

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level II inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level III inputs are unobservable inputs for the asset or liability.

The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis

55. Financial Risk Management Policy

Financial Risk Management Objective and Policies:

The Company''s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables and advances from customers. The Company''s principal financial assets include Investment, loans and advances, trade and other receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board provides written principles for overall risk management as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.

Market Risk

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, being mainly commodity price risk. Financial Assets affected by market risk include loans and advances, deposits and derivative financial instruments.

A. Interest rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates is minimal since the exposure relates primarily to the Company''s long-term debt obligations of redeemable non-convertible bonds with fixed interest rates as disclosed in Notes 23 and 28. With the current profile of fixed rate borrowing, the company is not sensitive to interest rate fluctuations.

B. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis. The company manages the net foreign currency risk mainly by entering into forward contracts with the bank as the counter party. The disclosures of outstanding forward contract as on reporting date is given in Note 47.

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel, major machineries, equipments etc. The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of steel, being the primary raw material inputs. The Company aims to sell the finished products based on firm contract which is negotiated after due consideration of the expected raw material prices. Therefore, the Company plans its purchases closely to optimise the price. Further since the products are of a specific nature which does not entail competition and is heterogeneous in nature due to its specification, the company''s exposure to commodity risk is minimal.

The following table details the Company''s sensitivity to a 5% movement in the input price of steel. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant.

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to sell a financial asset quickly at a rate close to its fair value.

The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents provides liquidity in the short-term and long- term and manages the liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities as depicted below.

Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its exposure to other financial assets, including deposits with banks and financial institutions, derivative instruments, and other financial instruments. The company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating in order to manage the credit risk. Trade receivables mainly comprise of government entities and the cash and cash equivalents and derivative instruments are maintained with banks and recognised financial institutions with high credit rating.

For trade receivables, as a practical expedient the company computes credit loss allowance based on a provision matrix which considers historically observed default rates over expected life of trade receivables, adjusted for forward looking estimates. The movement in expected credit loss allowance is disclosed in Note 15.

The Company''s maximum exposure to the credit risk for the components of Balance Sheet as 31st March 2024 and 31st March 2023 is the carrying amounts mentioned in Note no 15 and as stated in Note 53, around 93.05%(approx) of company''s turnover and 94.12% (approx.) of trade receivables and customer advance is with respect to Government and Govt. regulated entities. The maximum exposure relating to financial derivative instruments and financial guarantees is disclosed in Note 47 and Note 48 respectively.

58. Capital Management

The company''s objective when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The company is not subject to any externally imposed capital requirements.

To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings (including bonds).

59. The Company have used the ERP, SAP S/4HANA as the accounting software for maintaining its books of account, which have a feature of Security audit log and recording audit trail (edit log) facility throughout the year for all relevant transactions recorded in the respective softwares except for the instances mentioned below.

i. 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.

ii. 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 no instance of audit trail feature being tampererd with was noted in respect of the accounting software.

60. Consumption of imported goods/services for the year amounts to H78495.68 lakhs (H74122.85 lakhs in previous year)

61. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder,

62. The Company has no borrowings from banks or financial institutions on the basis of security of current assets. The company has been sanctioned aggregate Non -Fund based limits in excess of H5 Crores by the multiple banks, which are availed as and when required . It has also been sanctioned aggregate fund based limits in excess of H5 Crores by multiple banks which has not been availed by the company . The company is not required to file any quarterly returns or statements with the banks .

63. The company is not declared wilful defaulter by any bank or financial Institution or other lender,

64. The company has no transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

65. The Company has entered agreement with Andaman & Nicobar Administration on a long term license basis for a period of 30 years from November 2019 onwards for developing, designing, constructing, modernising, operating, maintaining and managing the existing shiprepair facility which is named as CSL-AN Ship Repair Unit (CANSRU).

66. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

67. 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. 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.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

68. The company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence disclosures relating to it are not applicable.

69. I n the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided based on the work done.

70 .The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

71. Figures in brackets denote negative figures.

72. Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year presentation.

As per our report attached

For M/s Anand & Ponnappan For and on behalf of Board of Directors

Chartered Accountants

(Firm Registration No. 000111S) SYAMKAMAL N BEJOY BHASKER

Company Secretary Director (Technical)

Membership Number - A25337 DIN - 08103825

Y BANUTEJA JOSE V J MADHU S NAIR

Partner Director (Finance) & Chief Financial Officer Chairman and Managing Director

(Membership Number 250129) DIN - 08444440 DIN - 07376798

Kochi, dated May 24, 2024 Kochi, dated May 24, 2024

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Mar 31, 2023

Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Cochin Air Products (0.30 hectare) and (b) land leased to Kerala State Electricity Board (0.47 hectare).

Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

Freehold land includes landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2, 8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk, Ernakulam Dist, Kerala provided as security for issue of Tax free bonds.

The company has bearer plants in its premises and other sites which generates nominal income .Cost of such bearer plants cannot be reliably measured and hence these plants were not capitalized.

Title deeds of all immovable properties are held in the name of the Company. In the case of following properties where the Company is the lessee, lease agreements are duly executed in favour of the lessee with the following exceptions:

* CSL has taken 8.12 Ha of land and 15 HA of water body on lease from COPT on 12 April 2013. A lease agreement was entered with COPT in this connection however the same has not yet been registered.

* CSL has also taken 8.134 HA of additional land area on lease from COPT on 16 Nov 2017 - Lease deed is yet to be executed and registered.

The company has executed concessionaire agreements with the Mumbai Port Trust and Kolkata port Trust to Upgrade, Operate and Manage Ship Repair facility at Hughes Dry Dock and specified berths at Indira Dock of MbPT and two dry docks and Berth No.6 of Netaji Subash Dock of KoPT respectively.

The project site at MbPT is taken on license for 29 years. The license agreement is yet to be registered, as a request submitted for waiver of the stamp duty to the Government of Maharashtra is under consideration.

The project site at Syama Prasad Mukherjee Port is taken on license for 30 years . As license agreement does not attract stamp duty and registration charges in West Bengal , Concession Agreement with KoPT has not been registered .

The Right to use of land and ship repair facility represents the upfront fee paid to Cochin Port Trust towards setting up of International Ship Repair Facility (ISRF) project, to be amortised over the period of lease which was further extended based on the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09, 2018, the lease period of 30 years effectively starts from this date.

Considering the indicators of the value of an investment such as investee''s assets, results etc. a decline, other than temporary, in the value of investment in Cochin Waste to Energy (P) Ltd is noticed and accordingly fair value is considered as Nil .Similarly, increase in value of investment in Kerala Enviro Infrastructure Limited is noticed and accordingly investment is fair valued.

The Company''s Investment in Cochin Shipyard Employees Consumer Co-operative Society Limited are non-participative shares and normally does not carry any voting rights. Hence, the company has carried this investment at its transaction value considering to be its fair value.

At the beginning of the current year, the Company had invested in the equity share capital of Hooghly Cochin Shipyard Limited (HCSL), a sum of H4935.34 lakhs, comprising of 5,00,00,000 shares of H10 each, during the period from 2017 to 2021. Out of the above 2,80,00,000 shares of H10 each were acquired through rights share.

During the year the Company has made further investment of H4600.00 lakhs comprising 4,60,00,000 of H10 each again on a rights basis, and the total investment in HCSL at the end of the year is H9535.34 lakhs.

The Company had acquired Temba Shipyard Limited, now renamed as Udupi Cochin Shipyard Limited, by an Order of NCLT by investing H6500.00 lakhs comprising of 6,50,00,000 shares of H10 each. During the year the company has made further investment of H25,00,00,000 comprising 2,50,00,000 of H10 each again on a rights basis, and the total investment in UCSL at the end of the year is H9000 lakhs.

The equity shares issued on rights basis shall rank pari passu with the existing equity shares of the Company in all respects, The above investment are accounted at cost in accordance with IND AS 27-Separate Financial Statement.

Terms & Rights attached to Equity shares: The Company has only one class of equity shares having a face value of ?10 per share which is fully paid up. Equity shareholders are eligible for one vote per share held, and are entitled to dividends as and when declared by the Company. Interim dividend is paid as and when declared by the Board. Final dividend proposed by the Board of Directors is subject to approval/regularisation by the share holders in the Annual General meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Movement of each item in Other Equity is detailed in Statement of Changes in Equity.

Capital Reserve: Capital reserve includes H263.56 lakhs being restoration charges received from Ms Indian Oil Corporation Ltd for laying pipe line through the Company''s land.

Capital Redemption Reserve: Capital Redemption Reserve of ?12353.76 includes ?11914.20 lakhs being reserves created on redemption of preference shares and ?439.56 lakhs being a sum equal to the nominal value of the shares bought back, which will be utilised for the purpose defined under the Companies Act 2013.

Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The company had completed the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of H10 each at premium ( H93929.76 lakhs). Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting H777.93 lakhs has been debited in Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.

Debenture Redemption Reserve: The Company was hitherto creating Debenture Redemption Reserve at 25% of the value of bonds issued by the company over the maturity period of such debentures in accordance with Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 and as per SEBI (Issue and Listing of Debt Securities) Regulations, 2008. As per the amendment made to the Companies (Share Capital and Debentures) Rules, 2014 notified vide Notification No. G.S.R. 574(E) by the Ministry of Corporate Affairs, the company is not required to create Debenture Redemption Reserves in respect of the bonds issued by it. However, the Debenture Redemption Reserve already created up to 30.09.2019, H1668.44 lakhs, shall be retained in the books till the time of redemption of the bonds.

General Reserve: General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act, 2013. This is a free reserve and can be utilised for any general purpose like issue of bonus shares, payment of dividend, buy back of shares etc. The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory.

Cash flow Hedge Reserve: Cash flow hedge reserve represents the effective portion of change in the fair value of designated hedging instruments recognised in the Other Comprehensive Income. (Refer Note No. 46)

Interim dividend : During the year, the Company paid interim dividends of H7 per equity share of face value of H10 and H7 per equity share of face value of H10, as recommended at the board meetings held on Nov 10, 2022 and Feb 10, 2023 respectively.

Proposed dividend :The Board of Directors of the Company have recommended a final dividend of H3.00 per equity share of face value of H10 for the financial year ended March 31, 2023 at the Board meeting held on May 19, 2023. This is subject to approval/ regularisation by the share holders in the Annual General meeting.

a) Tranche 1: 1000 bonds of face value of ?10 lakhs totalling ?10000 lakhs with interest rate of 8.51% payable annually , redeemable at par, due for redemption on 02nd December 2023.

b) Tranche 2: 230 bonds of face value of ?10 lakhs totalling ? 2300 lakhs with interest rate of 8.72% payable annually, redeemable at par, due for redemption on 28th March 2029 .

These bonds are secured against the landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2, 8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk, Ernakulam Dist, Kerala.

Utilisation: Out of the issue proceeds of ?12300 lakhs received, the Company has fully utilised/adjusted funds towards various expenditure incurred on International Ship Repair Facility (ISRF) project.

Difference between carrying amounts and fair values of financial liabilities of borrowings is not significant in each of the year presented.

IAC Trade Payables include H1,774.84 lakhs payable to MSME vendors which are not due as on 31 March 2023.

The company has incurred H37,377.15 lakhs till 31 March 2023 (H34,808.21 lakhs till 31st March 2022) towards augmentation of infrastructure facility out of funds received from Indian Navy. The ownership of the assets created out of the said funds vests with Indian Navy.

Stock of raw materials and bought out components procured under "Cost Plus" part of the IAC contract amounting to ?6966.24 lakhs (previous year ?8977.28 lakhs) held on behalf of Indian Navy lying with the Company is adjusted against Advances from Indian Navy for Indigenous Aircraft Carrier.

During the Financial Year 2022-23, the Company has handed over the Indigenous Aircraft Carrier (IAC P-71) to Indian Navy in accordance with the contract for the construction of IAC P-71. The Company has raised Invoice for H1915000 lakhs on achievement of the delivery milestone of the contract. The balance scope of work will be completed subsequently within 2 years as per the construction contract.

1. Revenue is recognized when the company satisfies performance obligations by transferring promised goods and services to the customer over a period of time using output method based on measurement of physical performance completed to date. Output method faithfully depicts the Company''s performance towards complete satisfaction of the performance obligation and gives clear picture of Company''s efforts and hence the same is being adopted to depict the performance completed to date.

2. Refer Note No 44 on Ind AS 115 "Revenue from Contract with Customers".

3. Out of the Revenue from Operations, H6905.65 lakhs (H9503.19 lakhs in previous year) pertain to revenue from export orders.

4. The Company has considered the lock down period due to COVID 19 & Gol circular dated May 13, 2020, which ever is applicable to the projects and Kerala Flood natural calamity 2018 as Force Majeure period for computation of Liquidated Damages while calculating Revenue from operations.

5. With regard to the Shipbuilding contract with Andaman & Nicobar (''A&N'') Administration for construction of 2 Nos 1200 Passenger Vessels, the contractual delivery dates (as extended) for SH.0023 is already expired and other vessel SH.0024 is nearing expiry. The Company has provided for LD for the delay upto 29 Apr 2023 and 30 Oct 2023 in respect of SH.0023 & SH.0024 respectively. At the request of the A&N administration for reallocation of the vessel for other prospective buyers, the delivery of ships has been abated, with minor progress. Since the Company has a valid contract with A&N Administration, the company has not recognized further liquidated damages in the financials beyond the dates mentioned above.

6. Ship Building Financial Assistance (''SBFA'') provided by Govt. of India is to compensate the cost incurred by the company in building the vessels and it is not for the losses already incurred. Prior to 2016, SBFA was named as "Shipbuilding Subsidy", with an intention to subsidize the cost/compensating the cost of construction of vessel. Subsequently the term has been reworded as "Ship Building Financial Assistance", without any change in the intention of the Government, modality, principles and procedure of the policy. During FY 2022-23 ,SBFA is recognised over a period of time in proportion to the expenses / cost incurred as against ''recognition based on physical performance'' which was followed in previous years. The impact of the same H85.21 lakhs is charged to P&L account.

7. Cochin Shipyard Ltd (CSL) has entered into an Agreement with the Andaman and Nicobar Administration to commence its operations at Marine Dockyard, at Port Blair, a facility that is currently being operated directly by the A&N Administration. Management fee on pro rata basis is accounted based on this agreement. Under the ambit of this Agreement signed on 28 Nov 2019, CSL shall assist the Administration to set up a Ship repair ecosystem at A&N islands.CSL shall also associate in Augmentation and Modernisation of the facility and also focus efforts towards Skill Development in the Islands in consultation with the Administration and Technical Institutions located in the Islands.

Contribution to Provident Fund and Family Pension Fund includes provident fund inspection and administration charges H43.62 lakhs (previous year ?20.46 lakhs )

Salaries, Wages, bonus/exgratia and allowances includes provision for encashment of half pay compensated absences for workmen amounting to ?13.26 lakhs (previous year ?47.67 lakhs)

The employee benefits accruing to the employees on deputation from Cochin Port Trust and Mumbai Port Trust are being accounted based on demands received from Cochin Port Trust & Mumbai Port Trust as per tripartite agreement between the Company, Cochin Port Trust & Mumbai Port Trust and the recognised Trade unions of the Port and not based on actuarial valuation except for gratuity which is actuarially valued.

Post-employment obligations

Provident fund

Provident Fund for eligible employees is managed by the Company through a trust in line with the Provident Fund and Miscellaneous Provision Act,1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employees and employer @12% of basic salary (including Dearness Allowance) together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement whichever is earlier The benefits vests immediately on rendering of the services by the employee. The contribution is charged to Statement of Profit and Loss of the year when the contributions to the respective funds are due in accordance with relevant statute. Employer''s contribution to Provident Fund & Family Pension fund is H2028.84 lakhs for the year 2022-23 (H1353.43 lakhs for the year 2021-22). The minimum interest rate payable by the trust to the beneficiaries every year is notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust (including investment risk fall) and the notified interest rate, which is determined on the basis of actuarial valuation.

The Company has obtained report on the determination and disclosure of interest rate Guarantee, valuation of Assets & Liabilities as per Ind AS 19 of Employees Benefits relating to Exempt Provident Fund for the period ended 31st March 2023.

• National Centre of Excellence for Green Port & Shipping (NCoEGPS) is a major initiative by the Ministry of Ports, Shipping and Waterways (MoPSW) towards providing greener solutions. The Energy and Resources Institute (TERI) is the knowledge and implementation partner for this project. The centre aims to develop a regulatory framework and alternate technology adoption road map for Green Shipping to foster carbon neutrality and circular economy (CE) in shipping sector in India. MoPSW, Deenadayal Port Authority Kandal, Paradip Port Authority Paradip, V O Chidambaranar Port authority Thoothukudi & Cochin Shipyard Ltd have partnered to develop NCoEGPS by providing funding support for infrastructure development and supporting research and capacitybuilding activities for 5 years. During FY 22-23, CSL has paid H475.00 lakhs to TERI which has been reported as R&D expenses.

• Ushus is a startup support program of CSL in association with IIMK LIVE & IIT Madras to augment the Government of India''s initiatives to encourage and develop an ecosystem in India to support Maritime Startups. As part of this program maritime startups will receive seed funds from CSL as grants/investments. IIMK LIVE & IIT Madras will review and recommend the proposals received under this scheme for investment by CSL. Fee for their services amounts to H18.50 lakhs.

• M/s Boston Consulting group was entrusted for preparation of detailed report for Setting up of Ship repair cluster (Mumbai & Kochi) in India in line with MoPSW''s Maritime India Vision-2030 for an amount of H343.00 lakhs

The land and water area on which the International Ship Repair Facility (ISRF) project 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 H8288.21 lakhs from the commencement of project construction/development till 31 Mar 2023. As the amount is less than the materiality level arrived by the Company, the management rectified/corrected the prior periods error amounting to H6181.35 lakhs during the year, which was duly classified as ''Exceptional items''.

Details of transaction price allocated to unsatisfied/ partially satisfied performance obligations:

Aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period amounts to H1693669.58 lakhs (excluding Cost Plus Part of IAC contract).The amount of transaction price relating to unsatisfied performance obligation that are part of a contract that has an original expected duration of one year or less has not been included in the above disclosure as permitted under Ind AS 115. Further the estimate of the transaction price as above would not include any estimated amounts of variable consideration that are constrained. Management expects that 19.63 % of transaction price allocated to unsatisfied/ partially satisfied contracts as of 31.03.2023, as stated above, will be recognised as revenue during FY 2023-24 and the remaining thereafter.

Note 45: Additional Disclosures under Ind AS 116-"Leases"

Rent and Hire charges Expense includes expense incurred for the year ended 31.03.2023 relating to Short term leases and leases of low value assets amounting to H130.23 lakhs (Previous year H83.83 lakhs).

Total Cash outflow for leases for the year ended March 31, 2023 including outflow for short term and low value leases is H2548.22 lakhs (Previous year H2560.62 lakhs).

The Company has lease term extension options that are not reflected in the measurement of lease liabilities.

Note 46: Additional Disclosures for Hedge Accounting

The company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts denominated in currencies other than Indian Rupee. The counter party to the company''s foreign currency forward contracts is generally a bank.

Note 47: CONTINGENTLIABILITIES AND COMMITMENTS
Particulars	As at Mar 31, 2023 (W in lakhs)	As at BrieF Description oF the nature and obligation Mar 31, 2022 (W in lakhs)
A CONTINGENT LIABILITY (To the extent not provided for)	19,635.79 80,096.23 69.06
a Guarantees
i Letters of Credit		11,664.67 Represents Letter of Credit opened by the Company in various banks for procurement of materiais/assets.
ii Bank Guarantees		39,139.27 Bank guarantees (including continuity guarantees) represent guarantees issued by various banks on behalf of the Company to its customers and other beneficiaries. Value of advance Bank Guarantee/Indemnity Bond outstanding as on Balance sheet date is inclued in Note 48.
b Other money for which the company is contingently liable
i Greater Cochin Development Authority (GCDA)		69.06 Claim raised by GCDA for the land acquired for the Company is settled. However 8 land acquisition revision petition cases (Valued at H69.06 lakhs) filed by evictees is pending with the Hon''bie Supreme Court and High Court.
ii Customs duties	6,485.78	16,796.84 Customs duty for materials under Bond and indigenous vessels delivered. Includes an amount of H69.83 lakhs being Customs duty refund granted by CESTAT, Bangalore, against which an appeal was filed by the Department before the Hon''ble High Court of Kerala. The Hon''ble High Court of Kerala has since disposed off the appeal with a direction to the Department to prefer the appeal before the Hon''ble Supreme Court of India. In absence of any further information on the departmental appeal, the same has been retained as Contingent Liability. This also includes H5982.16 lakhs paid under protest.
iii Income Tax	2,236.53 1,647.47 376.67	2,069.97 Demand relating to Assessment Years:
		AY 2010-11 - H126.26 lakhs
		AY 2014-15 - H911.07 lakhs
		AY 2017-18 - H331.77 lakhs
		AY 2018-19 - H20.76 lakhs
		AY 2020-21 - H819.51 lakhs
		AY 2021-22 - H27.16 lakhs
		Detailed notes in Note no. 47.1 (I)
iv Service Tax		1,647.47 Demand of Service Tax on IAC (Design Consultancy) as per Show Cause Notice issued. Appeal filed to CESTAT.
		376.67 Refund claim of Service Tax on IAC granted by Commissioner (Appeal). However Department filed Appeal before CESTAT against the order of Commissioner(Appeals). Also issued Show Cause Notice on CSL.

Particulars	As at Mar 31, 2023 (W in lakhs)	As at BrieF Description oF the nature and obligation Mar 31, 2022 (W in lakhs)
	323.04	323.04 Demand of Service Tax on IAC (Management Fee/Handling Charges) as per Show Cause Notice issued. Appeal filed to CESTAT.
	2,339.64	2,339.64 Show Cause Notice issued for levy of service tax on ship repair without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit. Proceedings under the show cause has been dropped vide order no. COC-EXCUS-000-COM-18-17-18 dt 19.03.2018. Department filed appeal to CESTAT.
	1,885.49	1,885.49 Show Cause Notice issued for levy of Service Tax on the repair of vessels owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 20-6-2012 available for the repair of vessels owned by Govt. Departments. Proceedings under the show cause has been dropped vide order no. COC-EXCUS-000-COM-11-17-18 dt 07.03.2018. Department filed appeal to CESTAT.
Service Tax	513.71	513.71 Show Cause Notice issued for levy of Service Tax on the repair of vessels during FY 2015-16 owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 206-2012 available for the repair of vessels owned by Govt. Departments.
	734.93	734.93 Show Cause Notice issued for levy of Service Tax on the repair of vessels during FY 2016-17 owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 206-2012 available for the repair of vessels owned by Govt. Departments.
	150.57	150.57 Show Cause Notice issued for levy of service tax on ship repair during the period 2015-16 without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit. Joint Commissioner vide OIO No.48/2020-ST(JC) dt 31.12.2020 confirmed demand. Appeal filed to Commissioner (Appeals) againt OIO.
	286.85	286.85 Show Cause Notice issued for levy of service tax on ship repair during the period 2016-17 without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit.
	279.46	279.46 Show Cause Notice issued for non payment of service tax on availing services of persons in non-taxable territory for meeting contractual warranty obligations and on cost of security provided to the transportation of Barge from Cochin to Abu Dhabi. Appeal filed to CESTAT.
v Keraia Value Added Tax (KVAT)	787.32	0.00 Demand for FY 2015-16. Assessing office made additions to taxable turnover against the order of Joint Commissioner (Appeals) and raised demand.

Particulars	As at Mar 31, 2023 (W in lakhs)	As at BrieF Description oF the nature and obligation Mar 31, 2022 (W in lakhs)
vi Aiekton Engineering Industries Pvt Ltd	240.74	195.09 The petitioner (claimant) approached MSME Council for recovery of Liquidated damages (LD) along with interest in respect of LD deducted by CSL for delay in submission of drawings and supply of goods . MSME Council , Chennai has referred the case to Madras High Court Arbitration Centre for arbitration. Madras High Court Arbitration Centre has appointed Mr. Suhrith Parthsarrathy as the sole arbitrator. Claim petition filed by the petitioner. Examination of witness is in progress.
vii Employee State Insurance Corporation	54.66	54.66 ESI Corporation raised a demand notice for H62.28 lakhs towards contribution for advance trainees for the period Apr 2008- Mar 2012. Company has paid contribution of H26.46 lakhs for the period Jun 2010- Mar 2012 and H25.95 lakhs for the period Apr 2012- Jul 2013 belatedly. Later on, ESI Department has raised a demand notice of H19.84 lakhs towards interest on delayed payments and damages for the period Jun 2010- Jul 2013. The Company is contesting the demands made before Honourable Insurance Court, Alappuzha. In the meantime, the court has granted a stay by depositing H1 lakh.
viii M/s. Vigil Marine Services	1861.59	0.00 M/s. Vigil Marine Services in 2004 raised claims towards Agency Commission payable for winning orders for ATCO Tugs. The arbitration proceedings commenced on 10 Oct 2004. Examination and cross examination of witnesses completed and posted the matter for arguments on 01 and 02 Feb 2014. The Arbitrator completed the proceedings and passed his award directing the Company to pay commission to M/s Vigil Marine Services at the rate of 5% of the ATCO contract value of U S Dollar 18.25 Million with interest @ 8% per annum. Aggrieved on this CSL filed Original Suit No 187/2016 before Sub Court, Ernakulam and obtained an interim order staying execution of the award. Bank guarantee for the award amount along with interest from the date of receipt of the amount till the date of award (H 1305 lakhs) has been deposited as security to Hon''ble High Court and and the same is included in Note 48.

Particulars	As at Mar 31, 2023 (W in lakhs)	As at BrieF Description oF the nature and obligation Mar 31, 2022 (W in lakhs)
ix Building Tax	27.54	0.00 CSL has challenged demand notice B1/14569/2019 No 112/19-20 dated 10.8.2019 under S. 10 of the Kerala Building Tax Act 1975 demanding an amount of H27,54,000/- towards building tax for the building owned by CSL at Girinagar (METI) by filing WP No. 14999/2023 before the Hon''ble High Court of Kerala The Hon''ble Court vide its order dated 02 May 2023 has granted interim stay of the operation of the demand notice and orders passed by the State Government till 30 May 2023.
x Property Tax	68.24	0.00 CSL challenged arrear demand notices issued by Kochi Municipal corporation for the period from 2013-14 to 202223 towards revised property tax for 14 old buildings of CSL by filing W.P (C) No. 12758/2023 before the Hon''ble High Court Kerala. The Hon''ble High Court Kerala vide its order dated 10 April 2023 granted interim stay of demand notices until further orders.
xi Indemnity Bond to Customs Authorities	22054.15 30415.00 863.83 65,249.69	15347.87 Bond under Customs (Imports of Goods at Concessional Rate of Duty) rules 2017.
xii Indemnity Bond to Govt of India		30415.00 Represent Indemnity Bonds given by Company to GoI towards performance of obligations under the IAC contract. Value of advance Bank Guarantee/Indemnity Bond outstanding as on Balance sheet date is inclued in Note 48
xiii Paint contamination claims		0.00 Claims raised against the Company for paint contamination spots observed on cars - Ghamadia & 128 yard at Mumbai Port.
B COMMITMENTS (To the extent not provided for)
a Estimated amount of contracts remaining to be executed on capital account and not provided for:		57,686.00 Estimated amount of contracts remaining to be executed on capital account and not provided for

47.1. CONTINGENCIES AND COMMITMENTS

The Income Tax Assessment of the company has been completed up to AY 2020-21.

Demands raised as per the assessment orders totaling ?2,236.53 lakhs for the Assessment Years 2010-11, 2014-15, 2018-19,201718, 2020-21, and 2021-22 are shown under Contingent Liability pending disposal of the appeals filed before the Commissioner of Income Tax (Appeals). The demands are mainly due to the disallowance of certain genuine claims. However, the above demands have been adjusted against the refund due for the subsequent years.

48. Value of advance Bank Guarantee/Indemnity Bond outstanding as on reporting date is H690720.85 lakhs ( Previous year H514684.76 lakhs)

49. Litigations :

The Company is subject to legal proceedings and claims, in the ordinary course of business. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the Company''s results of operation.

Nature of transaction - Transaction with other related parties

As CSL is a Government company under the control of Ministry of Shipping, Ports and Waterways (MoPSW), the Company has availed exemption from detailed disclosures prepared under Ind AS 24 with respect to related party transactions with Government and Government related entities.

However, as required under Ind AS 24, following are the individually significant transactions:

CSL''s ERP system, ''SAP S/4HANA'' has been implemented both in UCSL & HCSL with the entire SAP implementation cost and licenses charges for the financial year 2022-23, aggregating to H77.88 lakhs, being borne by the Company on behalf of its subsidiaries, given that the Subsidiaries operations are in a nascent stage and the cash outgo would have a negative impact on their financial position. Since the costs have been borne by CSL, it is considered to be a related party transaction not at arm''s length basis and Board approval has been granted under the provisions of Section 188 of the Companies Act, 2013.

In addition to the above, around 94.44 % (approx) of the companies turnover and 96.74% (approx) of trade receivables and customer advance is with respect to Government and Government related entities.

52. FINANCIAL INSTRUMENTS

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level I Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level II Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level III Inputs are unobservable inputs for the asset or liability.

1. The investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. The Company has chosen to designate these investments in equity instruments of Subsidiary at cost (as per Ind AS 27 ) and other equity instruments at FVTOCI (as per Ind AS 109), as the directors believe that this provides a more meaningful presentation of medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss. The investments in debt instruments are not held for trading. Upon the application of Ind AS 109, the Company has chosen to designate these investments at Amortised Cost.

Investments included in level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

There were no transfers between Level 1 and 2 in the period.

2. Loans, Borrowings are at the market rates and therefore the carrying value is the fair value.

3. The carrying amount of trade receivables, trade and other payables and short term loans are considered to be the same as their fair value due to their short term nature.

Difference between carrying amounts and fair values of bank deposits, other financial assets,other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented

53. Financial Risk Management Policy

Financial Risk Management Objective and Policies:

The Company''s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables and advances from customers. The Company''s principal financial assets include Investment, loans and advances, trade and other receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board provides written principles for overall risk management as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.

Market Risk

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, being mainly commodity price risk. Financial Assets affected by market risk include loans and advances, deposits and derivative financial instruments.

A. Interest rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates is minimal since the exposure relates primarily to the Company''s long-term debt obligations of redeemable non-convertible bonds with fixed interest rates as disclosed in Notes 22 and 27. With the current profile of fixed rate borrowing, the company is not sensitive to interest rate fluctuations.

B. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis. The company manages the net foreign currency risk mainly by entering into forward contracts with the bank as the counter party. The disclosures of outstanding forward contract as on reporting date is given in Note 46.

C. Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel, major machineries, equipments etc. The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of steel, being the primary raw material inputs. The Company aims to sell the finished products based on firm contract which is negotiated after due consideration of the expected raw material prices. Therefore, the Company plans its purchases closely to optimise the price. Further since the products are of a specific nature which does not entail competition and is heterogeneous in nature due to its specification, the company''s exposure to commodity risk is minimal.

Liquidity Risk

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to sell a financial asset quickly at a rate close to its fair value.

Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its exposure to other financial assets, including deposits with banks and financial institutions, derivative instruments, and other financial instruments. The company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating in order to manage the credit risk. Trade receivables mainly comprise of government entities and the cash and cash equivalents and derivative instruments are maintained with banks and recognised financial institutions with high credit rating.

For trade receivables, as a practical expedient the company computes credit loss allowance based on a provision matrix which considers historically observed default rates over expected life of trade receivables, adjusted for forward looking estimates. The movement in expected credit loss allowance is disclosed in Note 14.

The Company''s maximum exposure to the credit risk for the components of Balance Sheet as 31st March 2023 and 31st March 2022 is the carrying amounts mentioned in Note no 14 and as stated in Note 53, around 94.44%(approx) of company''s turnover and 96.74% (approx.) of trade receivables and customer advance it with respect to Government and Govt. regulated entities. The maximum exposure relating to financial derivative instruments and financial guarantees is disclosed in Note 46 and Note 47 respectively.

The Company has two major business segments -"Ship Building" and "Ship Repair". Revenue under Ship building includes H155800.89 lakhs (Previous year: H204473.56 lakhs) from one customer (Previous year: one customer) having more than 10% revenue of the total revenue, and for Ship repair includes H193571.56 lakhs (Previous year: H40786.31 lakhs) from two customers ( Previous year: two customers) having more than 10% revenue of the total revenue.

56. Capital Management

The company''s objective when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The company is not subject to any externally imposed capital requirements.

To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings (including bonds).

57. Consumption of imported goods/services for the year amounts to H74122.85 lakhs (H92189.67 lakhs in previous year)

58. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

59. The Company has no borrowings from banks or financial institutions on the basis of security of current assets. The company has been sanctioned aggregate Non -Fund based limits in excess of H5 Crores by the multiple banks, which are availed as and when required . It has also been sanctioned aggregate fund based limits in excess of H5 Crores by multiple banks which has not been availed by the company. The company is not required to file any quarterly returns or statements with the banks.

60. The company is not declared wilful defaulter by any bank or financial Institution or other lender.

61. The company has no transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

62. The Company has entered agreement with Andaman & Nicobar Administration on a long term license basis for a period of 30 years from November 2019 onwards for developing, designing, constructing, modernising, operating, maintaining and managing the existing shiprepair facility which is named as CSL-AN Ship Repair Unit (CANSRU)

63. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period

64. 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. 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.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

65. The company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence disclosures relating to it are not applicable.

66. In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided based on the work done.

67. The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

68. Figures in brackets denote negative figures.

69. Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation.

Corporate overview and Significant Accounting Policies 1-2

Notes to the Standalone Financial Statements 3-69

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Mar 31, 2022

Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Cochin Air Products (0.30 hectare) and (b) land leased to Kerala State Electricity Board (0.47 hectare).

Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

Assets taken over from Cochin Port Trust (CoPT) (? 1291.52 lakhs) have been valued and life assessed by technical experts. This life has been taken as a base for arriving at the remaining useful life for providing depreciation for these assets.These assets together with assets constructed/installed on land taken on lease from CoPT, Mumbai Port Trust (MbPT) and Kolkata Port Trust (KoPT) have been disclosed separately as assets on leased premises in the note no 3 to Property, Plant & Equipments.

The Company has created mortgage for ? 12300 Lakhs on the landed properties of the Company as security for the tax free bonds issued by the Company during the year 2013-14.

The Right to use of [and and ship repair facility shown under Intangible Assets represents the upfront fee paid to Cochin Port Trust towards setting up of International Ship Repair Facility (ISRF) project, to be amortised over the period of lease which was further extended based on the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09, 2018, the lease period of 30 years effectively starts from this date.

M/s Hooghiy Cochin Shipyard Limited (HCSL) a subsidiary of Cochin Shipyard Ltd, was incorporated on October 23, 2017 as an arrangement between M/s Cochin Shipyard Ltd (CSL) and M/s Hooghiy Dock & Port Engineers Limited (HDPEL) wherein CSL had invested in 16280000 equity shares of face value of ?10 each for cash (74%) and Hooghiy Dock & Port Engineers Limited had invested in 5720000 equity shares of face value of ? 10 each for consideration other than cash (26%). During 2019-20, the Company acquired 57,20,000 (26%) equity shares of Hooghiy Cochin Shipyard Limited (HCSL) heid by HDPEL, for an amount of Rs 506.08 iakhs and HCSL has become a whoiiy owned (100%) subsidiary of CSL. The paid up equity share capitai of HCSL is Rs. 50,00,00,000 divided into 5,00,00,000 equity shares of Rs. 10 each. During 2020-21, the Company aiso invested on rights basis in 2,80,00,000 equity shares of face vaiue of Rs. 10/- each fuiiy paid up of M/s Hooghiy Cochin Shipyard Limited (HCSL) aggregating to Rs. 28,00,00,000/.The said equity shares shall rank pari passu with the existing equity shares of the Company in all respects, including dividend. Investments in equity shares of HCSL are accounted at cost as per Ind AS 27- Separate Financiai Statements.

The Nationai Company Law Tribunai (NCLT), Chennai on March 04, 2020, approved the Resoiution Pian submitted by CSL for acquisition of Tebma Shipyards Limited (TSL) which was undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). In compiiance with the NCLT Order, Cochin Shipyard Limited (CSL) paid the bid amount for takeover of TSL on September 15, 2020 with effect from which UCSL (formeriy TSL) has become a whoiiy owned subsidiary of CSL.The paid up equity share capitai of UCSL (formeriy TSL) is Rs. 65,00,00,000 divided into 6,50,00,000 equity shares of Rs. 10 each.and this investment in UCSL (formeriy TSL) is accounted at cost as per Ind AS 27- Separate Financiai Statements with effect from September 30, 2020.

Terms & Rights attached to Equity shares: The Company has only one class of equity shares having a face value of ?10 per share which is fully paid up. Equity shareholders are eligible for one vote per share held, and are entitled to dividends as and when declared by the Company. Interim dividend is paid as and when declared by the Board. Final dividend proposed by the Board of Directors is subject to approval/regularisation by the share holders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Movement of each item in Other Equity is detailed in Statement of Changes in Equity

Capital Reserve: Capital reserve includes Rs 263.56 lakhs being restoration charges received from M/s Indian Oil Corporation Ltd for laying pipe line through the Company''s land.

Capital Redemption Reserve: Capital Redemption Reserve of ? 12353.76 includes ? 11914.20 lakhs being reserves created on redemption of preference shares and ? 439.56 lakhs being a sum equal to the nominal value of the shares bought back, which will be utilised for the purpose defined under the Companies Act 2013.

Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The company had completed the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of Rs 10 each at premium ( Rs 93929.76 lakhs). Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting Rs 777.93 lakhs has been debited in Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.

Debenture Redemption Reserve: The Company was hitherto creating Debenture Redemption Reserve at 25% of the value of bonds issued by the company over the maturity period of such debentures in accordance with Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 and as per SEBI (Issue and Listing of Debt Securities) Regulations, 2008. As per the amendment made to the Companies (Share Capital and Debentures) Rules, 2014 notified vide Notification No. G.S.R. 574(E) by the Ministry of Corporate Affairs, the company is not required to create Debenture Redemption Reserves in respect of the bonds issued by it. However, the Debenture Redemption Reserve already created up to 30.09.2019, Rs. 1668.44 Lakhs, shall be retained in the books till the time of redemption of the bonds.

General Reserve: General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act, 2013. This is a free reserve and can be utilised for any general purpose like issue of bonus shares, payment of dividend, buy back of shares etc. The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory.

Cash flow Hedge Reserve: Cash flow hedge reserve represents the effective portion of change in the fair value of designated hedging instruments recognised in the Other Comprehensive Income. (Refer Note No. 43)

Interim dividend: During the year, the Company paid interim dividends of Rs 6 per equity share of face value of Rs.10 and Rs 7 per equity share of face value of Rs 10, as recommended at the board meetings held on Nov 11, 2021 and Feb 10, 2022 respectively

Proposed dividend: The Board of Directors of the Company have recommended a final dividend of Rs 3.75 per equity share of face value of Rs 10 for the financial year ended March 31, 2022 at the Board meeting held on May 20, 2022. This is subject to approval/ regularisation by the share holders in the Annual General Meeting.

Tax Free Infrastructure Bond Series 2013-14

a) Tranche 1: 1000 bonds of face value of ?10 lakhs totalling ?10000 lakhs with interest rate of 8.51% payable annually , redeemable at par, due for redemption on 02nd December 2023

b) Tranche 2: 230 bonds of face value of ?10 lakhs totalling ? 2300 lakhs with interest rate of 8.72% payable annually, redeemable at par, due for redemption on 28th March 2029 .

These bonds are secured against the landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy No. 713/11,23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2, 8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk, Ernakulam Dist, Kerala.

Utilisation : Out of the issue proceeds of ?12300 lakhs received, the Company has fully utilised/adjusted funds towards various expenditure incurred on International Ship Repair Facility (ISRF) project.

Difference between carrying amounts and fair values of financial liabilities of borrowings is not significant in each of the year presented.

Out of the Revenue from Opeartions, Rs 9503.19 lakhs (Rs 2567.77 lakhs in previous year) pertain to revenue from export orders.

The Company has considered the lock down period due to COVID 19 & GoI circular dated May 13, 2020, which ever is applicable to the projects and Kerala Flood natural calamity 2018 as Force Majeure period for computation of Liquidated Damages while calculating Revenue from operations.

Govt. of India approved a Financial Assistance Policy for Indian Shipyards on 9th December 2015 for grant of financial assistance to Indian Shipyards for shipbuilding contracts signed between April 1, 2016 to March 31, 2026. Recognition of revenue for this Assistance is based on measurement of percentage of completion of the vessel under subsidy, completed to date.

Cochin Shipyard Ltd (CSL) has entered into an Agreement with the Andaman and Nicobar Administration to commence its operations at Marine Dockyard, at Port Blair, a facility that is currently being operated directly by the A&N Administration.Management fee on pro rata basis is accounted based on this agreement. Under the ambit of this Agreement signed on 28 Nov 2019, CSL shall assist the Administration to set up a Ship repair ecosystem at A&N islands.CSL shall also associate in Augmentation and Modernisation of the facility and also focus efforts towards Skill Development in the Islands in consultation with the Administration and Technical Institutions located in the Islands.

Contribution to Provident Fund and Family Pension Fund includes provident fund inspection and administration charges W 20.46 lakhs (previous year W 19.23 lakhs )

Salaries, Wages, bonus/exgratia and allowances includes provision for encashment of half pay compensated absences for workmen amounting to W 47.67 lakhs (previous year W 72.62 lakhs)

Employee benefit expenses of previous year includes W 6.15 Lakhs being secondment to subsidiary (Hooghly Cochin Shipyard Ltd)

Employee benefit expenses of previous year includes W 13.05 Lakhs being secondment to subsidiary (Udupi Cochin Shipyard Ltd. (Formerly Tebma Shipyards Limited))

The employee benefits accruing to the employees on deputation from Cochin Port Trust and Mumbai Port Trust are being accounted based on demands received from Cochin Port Trust & Mumbai Port Trust as per tripartite agreement between the Company, Cochin Port Trust & Mumbai Port Trust and the recognised Trade unions of the Port and not based on actuarial valuation except for gratuity which is actuarially valued.

Post-employment obligations

Provident fund

Provident Fund for eligible employees is managed by the Company through a trust in line with the Provident Fund and Miscellaneous Provision Act,1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employees and employer @12% of basic salary (including Dearness Allowance) together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The contribution is charged to Statement of Profit and Loss of the year when the contributions to the respective funds are due in accordance with relevant statute. Employer''s contribution to Provident Fund & Family Pension fund is Rs.1353.43 Lakhs for the year 2021-22 (Rs.1287.92 Lakhs for the year 2020-21). The minimum interest rate payable by the trust to the beneficiaries every year is notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust (including investment risk fall) and the notified interest rate, which is determined on the basis of actuarial valuation.

The Company has obtained report on the determination and disclosure of interest rate Guarantee, valuation of Assets & Liabilities as per Ind AS 19 of Employees Benefits relating to Exempt Provident Fund for the period ended 31st March 2022.

Details of transaction price allocated to unsatisfied/ partially satisfied performance obligations:

Aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period amounts to Rs 754026.30 lakhs (excluding Cost Plus Part of IAC contract).The amount of transaction price relating to unsatisfied performance obligation that are part of a contract that has an original expected duration of one year or less has not been included in the above disclosure as permitted under Ind AS 115. Further the estimate of the transaction price as above would not include any estimated amounts of variable consideration that are constrained.Management expects that 18.03 % of transaction price allocated to unsatisfied/ partially satisfied contracts as of 31.03.2022, as stated above, will be recognised as revenue during FY 2022-23 and the remaining thereafter.

During the year ended March 31,2022 the Company recognised revenue of Rs 42131.88 lakhs arising from opening Contract Liability as of April 01,2021

Note 42: Additional Disclosures under Ind AS 116-"Leases"

Rent and Hire charges Expense includes expense incurred for the year ended 31.03.2022 relating to Short term leases and leases of low value assets amounting to Rs.83.83 lakhs (Previous year Rs 39.93 lakhs)

Total Cash outflow for leases for the year ended March 31,2022 including outflow for short term and low value leases is Rs.2560.62 lakhs (Previous year Rs 2439.02 lakhs)

The Company has lease term extension options that are not reflected in the measurement of lease liabilities

The company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts denominated in currencies other than Indian Rupee. The counter party to the company''s foreign currency forward contracts is generally a bank.

Note 44 : CONTINGENT LIABILITIES AND COMMITMENTS
Particulars	As at 31 Mar 2022 (W in Lakhs)	As at 31 Mar 2021 Brief Description of the nature and obligation (W in Lakhs)
A CONTINGENT LIABILITY (To the extent not provided for)
a Guarantees
i Letters of Credit	11,664.67	12,356.31 Represents Letter of Credit opened by the Company in various banks for procurement of materials/assets
ii Bank Guarantees	4,03,824.02	3,53,929.06 Bank guarantees (including continuity guarantees) represent guarantees issued by various banks on behalf of the Company to its customers and other beneficiaries
iii Corporate Performance Guarantee to Cochin Port Trust	3,925.00	3,925.00 Performance guarantee given by Company to CoPT for performance of obligations under the contract agreement entered with CoPT during the contract period.
b Other money for which the company is contingently liable
i Greater Cochin Development Authority (GCDA)	69.06	69.06 Claim raised by GCDA for the land acquired for the Company is settled. However 8 land acquisition revision petition cases (Valued at Rs.69.06 lakhs) filed by evictees is pending with the Hon''ble Supreme Court and High Court.

Particulars	As at 31 Mar 2022 (W in Lakhs)	As at 31 Mar 2021 Brief Description of the nature and obligation (W in Lakhs)
ii Customs duties	17,984.71	17,984.48 Customs duty for materials under Bond and indigenous vessels delivered. Includes an amount of Rs. 69.83 lakhs being Customs duty refund granted by CESTAT, Bangalore, against which an appeal was filed by the Department before the Hon''ble High Court of Kerala. The Hon''ble High Court of Kerala has since disposed off the appeal with a direction to the Department to prefer the appeal before the Hon''ble Supreme Court of India. In absence of any further information on the departmental appeal, the same has been retained as Contingent Liability.
iii Income Tax	2,069.97	2,069.97 Demand relating to Assessment Years:
		AY 2010-11 - Rs. 457.63 Lakhs AY 2011-12 - Rs. 369.50 Lakhs AY 2014-15 - Rs. 911.07 Lakhs AY 2017-18 - Rs. 331.77 Lakhs Detailed notes in Note no. 44.1 (I)
iv Service Tax	1,647.47	1,647.47 Demand of Service Tax on IAC (Design Consultancy) as per Show Cause Notice issued. Adjudication pending
	376.68	376.68 Refund claim of Service Tax on IAC granted by Commissioner (Appeal). However Department filed Appeal before CESTAT against the order of Commissioner(Appeals). Also issued Show Cause Notice on CSL & adjudication pending.
	323.04	323.04 Demand of Service Tax on IAC (Management Fee/ Handling Charges) as per Show Cause Notice issued. Adjudication pending
	2,339.64	2,339.64 Show Cause Notice issued for levy of service tax on ship repair without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit. Proceedings under the show cause has been dropped vide order no. COC-EXCUS-000-COM-18-17-18 dt 19.03.2018. Department filed appeal to CESTAT.
	1,885.60	1,885.60 Show Cause Notice issued for levy of Service Tax on the repair of vessels owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 20-6-2012 available for the repair of vessels owned by Govt. Departments. Proceedings under the show cause has been dropped vide order no. COC-EXCUS-000-COM-11-17-18 dt 07.03.2018. Department filed appeal to CESTAT.
Service Tax	513.71	513.71 Show Cause Notice issued for levy of Service Tax on the repair of vessels during FY 2015-16 owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 20-6-2012 available for the repair of vessels owned by Govt. Departments.

Particulars	As at 31 Mar 2022 (W in Lakhs)	As at 31 Mar 2021 Brief Description of the nature and obligation (W in Lakhs)
	734.93	734.93 Show Cause Notice issued for levy of Service Tax on the repair of vessels during FY 2016-17 owned by UTLA by denying the benefit of Notification No.25/212-ST dt. 206-2012 available for the repair of vessels owned by Govt. Departments.
	150.56	150.56 Show Cause Notice issued for levy of service tax on ship repair during the period 2015-16 without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit. Joint Commissioner vide OIO No.48/2020-ST(JC) dt 31.12.2020 confirmed demand. Appeal filed to Commissioner (Appeals) againt OIO.
	286.85	286.85 Show Cause Notice issued for levy of service tax on ship repair during the period 2016-17 without allowing deduction of materials for which VAT paid and disallowance of Cenvat Credit.
	279.46	279.46 Show Cause Notice issued for non payment of service tax on availing services of persons in non-taxable territory for meeting contractual warranty obligations and on cost of security provided to the transportation of Barge from Cochin to Abu Dhabi.
v Aiekton Engineering Industries Ltd	195.09	165.91 The petitioner (claimant) approached MSME Council for recovery of Liquidated damages (LD) aiong with interest in respect of LD deducted by CSL for deiay in submission of drawings and supply of goods . MSME Councii , Chennai has referred the case to Madras High Court Arbitration Centre for arbitration. Madras High Court Arbitration Centre has appointed Mr. Suhrith Parthsarrathy as the sole arbitrator . Claim petition filed by the petitioner. Examination of witness is in progress.
vi Employee State Insurance Corporation	17.26	17.26 Ciaims towards interest and damages in respect of delayed payments of ESI contributions payable in respect of advanced trainees during the period from June 2010 to Jul 2013. Aggrieved, CSL filed cases I.C No.60/2016, IC No: 09/2020, IC No: 03/2021 challenging the illegality and violation of instructions and the manner in which the claims were preferred by ESI Corporation.
B COMMITMENTS (To the extent not provided for)
a Estimated amount of contracts remaining to be executed on capital account and not provided for:	57,686.00	1,15,886.00 Estimated amount of contracts remaining to be executed on capitai account and not provided for

44.1. CONTINGENCIES AND COMMITMENTS (I) Income Tax Assessments The Income Tax Assessment of the company have been completed up to AY 2019-20. Demands raised as per the assessment orders totaling to ? 1369.11 lakhs for the Assessment Years 2010-11, 2011-12, 2014-15 and 2017-18 are shown under Contingent Liability pending disposal of the appeals filed before the Commissioner of Income Tax (Appeals). The demands are mainly due to disallowance of certain genuine claims. However the above demands have been adjusted against the refund due for the subsequent years. For the Assessment years 2010-11 and 2011-12 although the appeals filed before the Commissioner of Income Tax (Appeals) has been disposed in favour of the company, the Income Tax Department has gone for appeal against the order of Commissioner of Income Tax (Appeals) before the ITAT,the amount involved under appeal before the ITAT amounts to Rs.700.86 lakhs. 45. The dispute between M/s Apeejay Shipping Ltd (formerly known as Surendra Overseas Ltd) and the Company, in the matter of ship 005 was referred for arbitration by the Hon''ble Supreme Court of India. The arbitration award (July 2009) was in favour of the Company under which the Company is to receive ?2803.64 lakhs from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court, Ernakulam for passing a decree. M/s Apeejay Shipping Ltd has moved to the Sub Court to quash the Award of the Umpire and the Company has filed Counter Affidavit against this move. Petition is dismissed by the Sub Court. Petitioners have field appeal before the High Court against the order of the Sub- Court . The matter is pending before the court. No credit has been taken in the books of account, pending final decree of the Court. 46. Litigations : The Company is subject to legal proceedings and claims, in the ordinary course of business. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the Company''s results of operation. Details of material litigation as on 31 March 2022 M/s. Vigil Marine Services in 2004 raised claims towards Agency Commission payable for winning orders for ATCO Tugs. The arbitration proceedings commenced on 10 Oct 2004. Examination and cross examination of witnesses completed and posted the matter for arguments on 01 and 02 Feb 2014. The Arbitrator completed the proceedings and passed his award directing the Company to pay commission to M/s Vigil Marine Services at the rate of 5% of the ATCO contract value of U S Dollar 18.25 Million with interest @ 8% per annum. Aggrieved on this CSL filed Original Suit No 187/2016 before Sub Court, Ernakulam and obtained an interim order staying execution of the award. However the Company has already provided for the principal amount and interest thereon. 47. Corporate Social Responsibility (CSR) : As per section 135 of the Companies Act 2013, CSR committee has been formed by the Company. The areas of CSR activity includes Health Care, Education, Social Empowerment, etc., and other areas permitted in Schedule VII to the Companies Act 2013. The utilisation of CSR funds are done as per the recommendations of CSR committee. Details of amount required to be spent and the amount utilised are given below:

(a) Gross amount required to be spent by the Company during the period ended March 31, 2022 ? 1617 lakhs (b) Amount spent during the year ? 1619.47 Lakhs (H in Lakhs) Yet to be paid in Particulars In cash , Total cash (i) Construction/acquisition of any asset 1000.10 - 1,000.10 (ii) On purposes other than (i) above 619.37 - 619.37

In case of Sec.135(5) Excess amount spent (H in Lakhs)
Amount charged , , ,, ... . . Amount spent Amount carry forwarded from previous financial years , . , to P&L as CSR during the year expenses	Amount carry forwarded to succeding financial years
40.00 1619.47 1619.47 40.00
Additional Disclosures on CSR	As at March 31,2022 Rs Lakhs
(i) Amount required to be spent by the company during the year,	1617.00
(ii) Amount of expenditure incurred,	1619.47
(iii) Shortfall at the end of the year,	0.00
(iv) Total of previous years shortfall,	0.00
(v) Reason for shortfall,	NA
(vi) Nature of CSR activities: As per section 135 of the Companies Act 2013, CSR committee has been formed by the Company. The areas of CSR activity includes Health Care, Education, Social Empowerment, etc., and other areas permitted in Schedule VII to the Companies Act 2013. The utilisation of CSR funds are done as per the recommendations of CSR committee.
(vii) Details of related party transactions, e.g., contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard,	Nil
(viii) Where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year shall be shown separately.	Nil

48. 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. 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.

50. FINANCIAL INSTRUMENTS

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level II inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level III inputs are unobservable inputs for the asset or liability.

Investments included in level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value.The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

There were no transfers between Level 1 and 2 in the period.

2. Loans, Borrowings are at the market rates and therefore the carrying value is the fair value.

3. The carrying amount of trade receivables, trade and other payables and short term loans are considered to be the same as their fair value due to their short term nature.

Difference between carrying amounts and fair values of bank deposits, other financial assets,other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.

1. The investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. The Company has chosen to designate these investments in equity instruments of Subsidiary at cost (as per Ind AS 27 ) and other equity instruments at FVTOCI (as per Ind AS 109), as the directors believe that this provides a more meaningful presentation of medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss. The investments in debt instruments are not held for trading. Upon the application of Ind AS 109, the Company has chosen to designate these investments at Amortised Cost.

51. Financial Risk Management Policy

Financial Risk Management Objective and Policies:

The Company''s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables and advances from customers. The Company''s principal financial assets include Investment, loans and advances, trade and other receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board provides written principles for overall risk management as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, being mainly commodity price risk. Financial Assets affected by market risk include loans and advances, deposits and derivative financial instruments.

A. Interest rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates is minimal since the exposure relates primarily to the Company''s long-term debt obligations of redeemable non-convertible bonds with fixed interest rates as disclosed in Note 21. With the current profile of fixed rate borrowing, the company is not sensitive to interest rate fluctuations.

B. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis. The company manages the net foreign currency risk mainly by entering into forward contracts with the bank as the counter party. The disclosures of outstanding forward contract as on reporting date is given in Note 43.

The sensitivity of profit/ loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments. The sensitivity analysis includes only outstanding foreign currency denominated monetary items net of hedge accounting impact and adjusts their translation at the year-end for a 5% change in foreign currency rates, with all other variables held constant. The sensitivity rate represents management''s assessment of the reasonably possible change in foreign exchange rates.

C. Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel, major machineries, equipments etc. The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of steel, being the primary raw material inputs. The Company aims to sell the finished products based on firm contract which is negotiated after due consideration of the expected raw material prices. Therefore, the Company plans its purchases closely to optimise the price. Further since the products are of a specific nature which does not entail competition and is heterogeneous in nature due to its specification, the company''s exposure to commodity risk is minimal.

The following table details the Company''s sensitivity to a 5% movement in the input price of steel. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant.

Liquidity Risk

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to sell a financial asset quickly at a rate close to its fair value.

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its exposure to other financial assets, including deposits with banks and financial institutions, derivative instruments, and other financial instruments. The company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating in order to manage the credit risk. Trade receivables mainly comprise of government entities and the cash and cash equivalents and derivative instruments are maintained with banks and recognised financial institutions with high credit rating.

For trade receivables, as a practical expedient the company computes credit loss allowance based on a provision matrix which considers historically observed default rates over expected life of trade receivables, adjusted for forward looking estimates. The movement in expected credit loss allowance is disclosed in Note 13.

The Company''s maximum exposure to the credit risk for the components of balance sheet as 31st March 2022 and 31st March 2021 is the carrying amounts mentioned in Note no 13 and as stated in Note 49, around 94% of company''s turnover and 99.48% (approx.) of trade receivables and customer advance it with respect to Government and Govt. regulated entities. The maximum exposure relating to financial derivative instruments and financial guarantees is disclosed in Note 43 and Note 44 respectively.

The Company has two major business segments -"Ship Building" and "Ship Repair". Revenue under Ship building includes Rs. 204473.56 lakhs (Previous year: Rs. 203736.66 lakhs) from one customer (Previous year: one customer) having more than 10%

revenue of the total revenue, and for Ship repair includes Rs. 40786.31 lakhs (Previous year: Rs. 29714.58 lakhs) from two customers (Previous year: three customers) having more than 10% revenue of the total revenue.

Out of ship building segment revenue, Rs. 9503.19 lakhs (Rs. 2567.77 lakhs in previous year) pertain to revenue from export orders.

53 . Capital Management

The company''s objective when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The company is not subject to any externally imposed capital requirements.

To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings (including bonds).

54. Consumption of imported goods/services for the year amounts to Rs 92189.67 lakhs (Rs 64107.73 lakhs in previous year)

55. In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided based on the work done.

56. Balance shown under Trade Receivables, Trade Payables , loans, deposits and claims are subject to confirmation and consequent reconciliation, if any

57. The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

58. Figures in brackets denote negative figures.

59. Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation.

---

Mar 31, 2021

Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Cochin Air Products (0.30 hectare) and (b) land leased to Kerala State Electricity Board (0.47 hectare).

Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

Assets taken over from Cochin Port Trust (CoPT) (H 1291.52 lakhs) have been valued and life assessed by technical experts. This life has been taken as a base for arriving at the remaining useful life for providing depreciation for these assets.These assets together with assets constructed/installed on land taken on lease from CoPT, Mumbai Port Trust (MbPT) and Kolkata Port Trust (KoPT) have been disclosed separately as assets on leased premises in the note no 3 to Property, Plant & Equipments.

Considering the indicators of the value of an investment such as investee''s assets, results etc. a decline, other than temporary, in the value of investment in Cochin Waste to Energy (P) Ltd is noticed and accordingly fair value is considered as Nil.

M/s Hooghly Cochin Shipyard Limited (HCSL) a subsidiary of Cochin Shipyard Ltd, was incorporated on October 23, 2017 as an arrangement between M/s Cochin Shipyard Ltd (CSL) and M/s Hooghly Dock & Port Engineers Limited (HDPEL) wherein CSL had invested in 16280000 equity shares of face value of H10 each for cash (74%) and Hooghly Dock & Port Engineers Limited had invested in 5720000 equity shares of face value of H 10 each for consideration other than cash (26%). During 2019-20, the Company acquired 57,20,000 (26%) equity shares of Hooghly Cochin Shipyard Limited (HCSL) held by HDPEL, for an amount of H 506.08 lakhs and HCSL has become a wholly owned (100%) subsidiary of CSL. The paid up equity share capital of HCSL is H 50,00,00,000 divided into 5,00,00,000 equity shares of H 10 each. During the year, the Company also invested on rights basis in 2,80,00,000 equity shares of face value of H 10/- each fully paid up of M/s Hooghly Cochin Shipyard Limited (HCSL) aggregating to H 28,00,00,000/.The said equity shares shall rank pari passu with the existing equity shares of the Company in all respects, including dividend. Investments in equity shares of HCSL are accounted at cost as per Ind AS 27- Separate Financial Statements.

The National Company Law Tribunal (NCLT), Chennai on March 04, 2020, approved the Resolution Plan submitted by CSL for acquisition of Tebma Shipyards Limited (TSL) which was undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). In compliance with the NCLT Order, Cochin Shipyard Limited (CSL) paid the bid amount for takeover of TSL on September 15, 2020 with effect from which TSL has become a wholly owned subsidiary of CSL.The paid up equity share capital of TSL is H 65,00,00,000 divided into 6,50,00,000 equity shares of H 10 each.and this investment in TSL is accounted at cost as per Ind AS 27- Separate Financial Statements with effect from September 30, 2020.

Capital Reserve: Capital reserve includes H 263.56 lakhs being restoration charges received from Ms Indian Oil Corporation Ltd for laying pipe line through the Company''s land.

Capital Redemption Reserve: Capital Redemption Reserve of H 12353.76 lakhs includes H 11914.20 lakhs being reserves created on redemption of preference shares and H 439.56 lakhs being a sum equal to the nominal value of the shares bought back, which will be utilised for the purpose defined under the Companies Act 2013.

Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The company had completed the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of H 10 each at premium ( H 93929.76 lakhs). Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting H 777.93 lakhs has been debited in Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.

Debenture Redemption Reserve: The Company was hitherto creating Debenture Redemption Reserve at 25% of the value of bonds issued by the company over the maturity period of such debentures in accordance with Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 and as per SEBI (Issue and Listing of Debt Securities) Regulations, 2008. As per the amendment made to the Companies (Share Capital and Debentures) Rules, 2014 notified vide Notification No. G.S.R. 574(E) by the Ministry of Corporate Affairs, the company is not required to create Debenture Redemption Reserves in respect of the bonds issued by it. However, the Debenture Redemption Reserve already created up to 30.09.2019, H 1668.44 Lakhs, shall be retained in the books till the time of redemption of the bonds.

The Company has considered the lock down period due to COVID 19 & GoI circular dated May 13, 2020, which ever is applicable to the projects and Kerala Flood natural calamity 2018 as Force Majeure period for computation of Liquidated Damages while calculating Revenue from operations.

Govt. of India approved a Financial Assistance Policy for Indian Shipyards on 9th December 2015 for grant of financial assistance to Indian Shipyards for shipbuilding contracts signed between April 1, 2016 to March 31, 2026. Recognition of revenue for this Assistance is based on measurement of physical performance of vessels under subsidy, completed to date.

Cochin Shipyard Ltd (CSL) has entered into an Agreement with the Andaman and Nicobar Administration to commence its operations at Marine Dockyard, at Port Blair, a facility that is currently being operated directly by the A&N Administration.Management fee on pro rata basis is accounted based on this agreement. Under the ambit of this Agreement signed on 28 Nov 2019, CSL shall assist the Administration to set up a Ship repair ecosystem at A&N islands.CSL shall also associate in Augmentation and Modernisation of the facility and also focus efforts towards Skill Development in the Islands in consultation with the Administration and Technical Institutions located in the Islands.

Aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period amounts to H 784884.10 lakhs (excluding Cost Plus Part of IAC contract).The amount of transaction price relating to unsatisfied performance obligation that are part of a contract that has an original expected duration of one year or less has not been included in the above disclosure as permitted under Ind AS 115. Further the estimate of the transaction price as above would not include any estimated amounts of variable consideration that are constrained.Management expects that 19.59% of transaction price allocated to unsatisfied/ partially satisfied contracts as of 31.03.2021, as stated above, will be recognised as revenue during FY 2021-22 and the remaining thereafter.

During the year ended March 31,2021 the Company recognised revenue of H 15618.72 lakhs arising from opening Contract Liability as of April 01,2020

Note 44 :

The dispute between M/s Apeejay Shipping Ltd (formerly known as Surendra Overseas Ltd) and the Company, in the matter of ship 005 was referred for arbitration by the Hon''bie Supreme Court of India. The arbitration award (July 2009) was in favour of the Company under which the Company is to receive H2803.64 lakhs from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court, Ernakulam for passing a decree. M/s Apeejay Shipping Ltd has moved to the Sub Court to quash the Award of the Umpire and the Company has filed Counter Affidavit against this move. Petition is dismissed by the Sub Court. Petitioners have field appeal before the High Court against the order of the Sub- Court . The matter is pending before the court. No credit has been taken in the books of account, pending final decree of the Court.

Note 45 :

Permanent Machinery for Arbitration, Department of Public Enterprises, Govt. of India, has notified award in favour of the Company in the dispute between the Company and M/s Oil and Natural Gas Corporation Ltd (ONGC) on the Works Contract Tax issue and ONGC has paid to the Company the disputed sum along with interest amounting to H 2642.22 Lakhs as per the award. ONGC has gone on appeal before the Law Secretary, Ministry of Law & Justice against the award. Pending disposal of ONGC appeal, no adjustment has been made in the accounts.

The Company is subject to legal proceedings and claims, in the ordinary course of business. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the Company''s results of operation.

Details of material litigation as on 31 March 2021

M/s. Vigil Marine Services in 2004 raised claims towards Agency Commission payable for winning orders for ATCO Tugs. The arbitration

proceedings commenced on 10 Oct 2004. Examination and cross examination of witnesses completed and posted the matter for arguments on 01 and 02 Feb 2014. The Arbitrator completed the proceedings and passed his award directing the Company to pay commission to M/s Vigil Marine Services at the rate of 5% of the ATCO contract value of U S Dollar 18.25 Million with interest @ 8% per annum. Aggrieved on this CSL filed Original Suit No 187/2016 before Sub Court, Ernakulam and obtained an interim order staying

execution of the award. However the Company has already provided for the principal amount and interest thereon.

Note 47 : Corporate Social Responsibility (CSR)

As per section 135 of the Companies Act 2013, CSR committee has been formed by the Company. The areas of CSR activity includes Health Care, Education, Social Empowerment, etc., and those specified in Schedule VII of the Companies Act 2013. The utilisation of CSR funds are done through direct spending as per the recommendations of CSR committee. Details of amount required to be spent and the amount utilised are given below:

1. The investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. The Company has chosen to designate these investments in equity instruments of Subsidiary at cost (as per Ind AS 27 )and other equity instruments at FVTOCI(as per Ind AS 109), as the directors believe that this provides a more meaningful presentation of medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss. The investments in debt instruments are not held for trading. Upon the application of Ind AS 109, the Company has chosen to designate these investments at Amortised Cost

Financial Risk Management Objective and Policies:

Investments included in level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value.The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

There were no transfers between Level 1 and 2 in the period.

2. Loans, Borrowings are at the market rates and therefore the carrying value is the fair value.

3. The carrying amount of trade receivables, trade and other payables and short term loans are considered to be the same as their fair value due to their short term nature.

Difference between carrying amounts and fair values of bank deposits, other financial assets,other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented

The Company''s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables and advances from customers. The main purpose of these financial liabilities is to finance the Company''s operations, projects under implementation and to provide guarantees to support its operations. The Company''s principal financial assets include Investment, loans and advances, trade and other receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. All derivative activities for risk management purposes are carried out based on the forex risk management policy approved by the Board. As per the policy trading in derivatives for speculative purposes are not allowed. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market Risk

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial Assets affected by market risk include loans and borrowings, deposits and derivative financial instruments.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis.

Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel, major machineries, equipments etc. Therefore, the Company plans its purchases closely to optimise the price.

Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Note 52 : Capital Management

The company''s objective when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The company is not subject to any externally imposed capital requirements.

To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings (including bonds).

The Coronavirus disease (COVID-19) is turning out to be a human tragedy and a global pandemic impacting the society and the economy at large. It is adversely affecting the health of people worldwide as well as on the state of economy and commerce. It continues to be a matter of major concern for all the business organizations even though the vaccination of the masses has already started. The COVID-19 outbreak in waves has already had a significant effect on the economies of affected countries and international financial markets. Supply Chain disruptions in India as a result of the outbreak started with restrictions on movement of goods, closure of borders etc., in several states followed by a nationwide lockdown from the 25th of March 2020 announced by the Indian Government, to stem the spread of COVID-19. Due to this the operation at CSL''s facilities and its subsidiaries was temporarily disrupted from 23 rd March 2020 to 5 th May 2020. This was followed by a period of low infection which helped open the industries and economy. The Company also ramped up the production significantly in the ensuing quarters. There were some delay in the running projects including Capex but impact is lessened to a great extent by invocation and grant of the Force Majeure clause in contracts and GoI circular dated 13 May 2020. However, the second wave which started from February 2021 is again forcing states to lockdown for extended periods. The impact of the second wave is still unfolding. The business landscape presents a challenge because of the likely shelving/withholding of the pipeline projects by the potential clients but the Company expects sufficient business for it. The unfolding pandemic scenario still presents a challenge for the company in assessing the future despite the renewed vaccination drive across the globe and the Company will continue to closely monitor any material changes to future economic conditions.

Note 54 :

In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided based on the work done.

Note 55 :

Balance shown under Trade Receivables, Trade Payables , loans, deposits and claims are subject to confirmation and consequent reconciliation, if any.

The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

Note 57 :

Figures in brackets denote negative figures.

Note 58 :

Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation.

Corporate overview and Significant Accounting Policies 1-2

Notes to the Financial Statements 3-58

The accompanying notes are an integral part of these financial statements

---

Mar 31, 2018

1. CORPORATE OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES

1.1. Corporate information

Cochin Shipyard Limited (referred to as “CSL” or “the Company”) is mainly engaged in the construction of vessels and repairs and refits of all types of vessels including upgradation of ships periodical layup repairs and life extension of ships.

The Company is a public limited company incorporated and domiciled in India. The address of its corporate office is Perumanoor, Kochi, Kerala. As at March 31, 2018, the Government of India holds 75% of the Company’s equity share capital. The Company’s equity shares are listed for trading on NSE Limited and BSE Limited in India and tax free bonds are listed for trading on BSE Limited.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 24, 2018.

Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Cochin Air Products (0.30 hectare) and (b) land leased to Kerala State Electricity Board (0.47 hectare).

Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.

Assets taken over from Cochin Port Trust (CoPT) (Rs. 1291.52 lakhs) have been valued and life assessed by technical experts. This life has been taken as a base for arriving at the remaining useful life for providing depreciation for these assets.These assets together with assets constructed/installed on land taken on lease from CoPT, have been disclosed separately as assets on leased premises in the note no 3 to Property, Plant & Equipments.

The Company has created mortgage for Rs. 12300 Lakhs on the landed properties of the Company as security for the tax free bonds issued by the Company during the year 2013-14.

The Right to use of land and ship repair facility shown under Intangible Assets represents the upfront fee paid to Cochin Port Trust towards setting up of International Ship Repair Facility (ISRF) project, to be amortised over the period of lease which was further extended based on the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09, 2018, the lease period of 30 years effectively starts from this date.

Trade receivables include debts amounting to Rs.32539.48 lakhs (previous year Rs.4870.64 lakhs) on account of income recognized under proportionate completion method pertaining to incomplete vessels, against which stage payments received amounting to Rs.88490.06 lakhs (previous year Rs.33928 lakhs) for completed stage and is shown as advance under current liabilities.

Trade receivables are non-interest bearing and receivable in normal operating cycle.

Balance in current account includes Rs. 3.84 lakhs (previous year Nil) being IPO proceeds and Term deposits with original maturity of less than three months includes Rs. 9437.39 lakhs (previous year Nil) being proceeds from IPO including interest accrued.

Funds received from Indian Navy for the construction of Indigenous Aircraft Carrier are held in a separate account and is separately disclosed.

Bank balance in Current Account includes Rs.838.65 lakh to be adjusted against GST liability on delivery of IAC towards Input Tax Credit availed on Cost Plus procurements for IAC funded by Indian Navy.

Deposits with banks with maturity upto 12 months, includes Rs. 74689.22 lakhs (previous year Nil) relating to proceeds from IPO including interest accrued.

Deposits with banks with maturity upto 12 months, includes Rs. 76.96 lakhs ( previous year Rs. 71.99 lakhs) is lien marked in favour of The Registrar of High Court of Kerala.

During the year ,Company has raised capital of Rs. 2265.60 lakhs through Initial Public Offer (IPO) by issuing 22656000 equity shares of Rs. 10 each.

Terms & Rights attached to Equity shares: The Company has only one class of equity shares having a face value of Rs.10 per share which is fully paid up. Equity shareholders are eligible for one vote per share held, and are entitled to dividends as and when declared by the Company. Interim dividend is paid as and when declared by the Board. Final dividend proposed/ declared by the Board of Directors is subject to approval/regularisation by the share holders in the Annual General meeting. All dividends are paid in Indian Rupees. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Capital Reserve: Capital reserve represents restoration charges received from Ms Indian Oil Corporation Ltd for laying pipe line through the Company’s land.

Capital Redemption Reserve: Capital Redemption Reserve of Rs. 11914.20 lakhs represents the reserves created on redemption of preference shares which will be utilised for the purpose defined under the Companies Act 2013.

Securities Premium Reserve:

Premium on tax free bonds is amortised on straight line basis over the period of bonds.

The Company has completed an Initial Public Offer (‘IPO’) of 33984000 equity shares of face value of Rs. 10 each. This comprises of an offer for sale of 11328000 equity shares (10% of its equity shareholding) under the Disinvestment programme of Govt. of India, the President of India acting through the Ministry of Shipping and a fresh issue of 22656000 equity shares and shares were allotted on 09 Aug 2017 . The equity shares were listed in Bombay Stock Exchange and National Stock Exchange on 11.08.2017.

The company has completed the Initial Public Offer (IPO) and has allotted 22656000 equity shares of Rs. 10 each at premium (Rs. 93929.76 lakhs).

Expenses incurred net of deffered tax adjustment towards such allotment of shares amounting Rs 777.93 lakhs has been debited in securities premium reserve In accordance with the requirements of Indian Accounting Standard (Ind AS) 32-Financial Instruments.

Debenture Redemption Reserve: In accordance with provisions of Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of Companies (Share capital and Debentures) Rules, 2014 and as per SEBI (Issue and Listing of Debt Securities) Regulations, 2008 the Company has created Debenture Redemption Reserve (DRR) amounting to Rs. 1235.94 lakhs (cumulative) at 25% of the value of debenture issued by the Company,over the maturity period of such debentures, proportionately for the period upto 31.03.2018.

Tax expenses (current tax and deferred tax) includes previous year tax adjustments also.

Proposed dividend : The Board of Directors of the Company have recommended a final dividend of Rs. 12/- per equity share of face value of Rs. 10/- for the financial year ended March 31, 2018 at the board meeting held on May 24, 2018.

Tax Free Infrastructure Bond Series 2013-14

a) Tranche 1: 1000 bonds of face value of Rs.10 lakhs totalling Rs.10000 lakhs with interest rate of 8.51% payable annually, redeemable at par, due for redemption on 02nd December 2023

b) Tranche 2: 230 bonds of face value of Rs.10 lakhs totalling Rs. 2300 lakhs with interest rate of 8.72% payable annually, redeemable at par, due for redemption on 28 th March 2029 .

These bonds are secured against the landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2, 8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk, Ernakulam Dist, Kerala.

Utilisation : Out of the issue proceeds of Rs.12300 lakhs received, the Company has fully utilised/adjusted funds towards various expenditure incurred on International Ship Repair Facility (ISRF) project.

Difference between carrying amounts and fair values of financial liabilities of borrowings is not significant in each of the year presented.

Liability of Rs. 261.22 lakhs to Chennai Port Trust in respect of customs duty is covered by a refund appeal lying before Commissioner (Appeals) which is also shown as deposits with Customs department under Note No. 10

In some cases, the Company has received intimation from Micro and Small Enterprises regarding their status under “The Micro, Small and Medium Enterprises Development Act, 2006”. The average credit period on goods and services are within 30 to 60 days. The amount remaining unpaid to Micro and Small suppliers as at the end of the financial year is Rs. 682.19 lakhs. No interest for delay was paid or payable under the Act.

Disclosure as required by Ind AS 11 - Construction Contracts

(a) Shipbuilding income of Rs.172763.78 lakhs (previous year Rs.151367.31 lakhs) includes revenue recognized under percentage of completion method amounting to Rs.172729.20 lakhs (previous year Rs.136171.34 lakhs) against incomplete vessels.

(b) Method of revenue recognition - Percentage of completion method

(c) Method used to determine the stage of completion - Stage of completion is measured in the proportion to expenses incurred till the end of the year to the estimated total cost of completion of the project or percentage of physical completion whichever is less.

(d) For contracts in progress as at the end of the year.

Ship repair income includes income recognised under proportionate completion method amounting to Rs.21092.00 lakhs (previous year Rs. 4153.00 lakhs )

Income from ship repair is net of actual / anticipated reductions amounting to Rs. 1922.81 lakhs (previous year Rs. 3903.13 lakhs).

Miscellaneous income includes Rs. 1.14 lakhs being deferred government assistance in the form of subsidy relating to installation of Solar Power plant inside the yard. The same has been accounted as per the requirements of Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance.

Income from sale of scrap and stores is net of import duty amounting to Rs. 45.33 lakhs (previous year Rs. 234.49 lakhs) on sale of bonded scrap and stores.

Contribution to Provident Fund and Family Pension Fund includes provident fund inspection and administration charges Rs. 15.16 lakhs (previous year Rs.14.67 lakhs )

Salaries, Wages, bonus/exgratia and allowances includes provision for encashment of half pay compensated absences for workmen amounting to Rs. 175.08 lakhs (previous year Rs. 19.18 lakhs)

The employee benefits accruing to the employees on deputation from Cochin Port Trust are being accounted based on demands received from Cochin Port Trust as per tripartite agreement between the Company, Cochin Port Trust and the recognised Trade unions of the Port and not based on actuarial valuation except for gratuity which is actuarially valued for 2017-18.

The revision in pay and allowances of officers and non-unionised supervisors was due w.e.f 01.01.2017 and for workmen w.e.f 01.04.2017. While most of the dues in respect of the executives have crystallised and the same for workmen is under finalisation. An amount of Rs.1200.96 lakhs has been carried as a liability as on March 31, 2018 towards pending due on this account.

Employee benefit expenses includes Rs. 11.95 Lakhs (previous year Nil) being secondment to subsidiary (Hooghly Cochin Shipyard Ltd)

Other Benefit Plan - Compensated absences

The principal assumptions used for the purpose of actuarial valuation were as follows:

MODU Sagar Bhushan, an oil rig owned by M/s ONGC was under repair at CSL and there was a fire incident on board the vessel on Feb 13, 2018 while the vessel was undergoing repairs. The incident resulted in damages to the vessel. The company has assessed the estimated damage cost to be Rs.1851 lakhs. Company has an annual insurance cover for the vessel under Ship Repairer’s liability policy with a limit of liability for any one incident of Rs.1500 lakhs with an annual limit of Rs.30000 lakhs. The company has accordingly made a provision for an amount of Rs. 351 lakhs net of insurance claim, towards probable loss on this

2.1. CONTINGENCIES AND COMMITMENTS

(I) Income Tax Assessments

(a) The Income Tax Assessment of the company have been completed up to AY 2014-15 Demands raised as per the assessment orders totaling to Rs.2268.52 lakhs for the Assessment Years 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15 are shown under Contingent Liability pending disposal of the appeals filed before the Commissioner of Income Tax (Appeals). The demands are mainly due to disallowance of certain genuine claims. However the above demands have been adjusted against the refund due to Company.

(b) For the Assessment years 1997-98 to 2001-02,the Income Tax department has gone for appeal against the order of the ITAT allowed in favour of CSL before the Hon’ble High Court of Kerala . For the Assessment year 1997-98 the appeal was decided in favour of CSL and for the Assessment year 1998-99 the appeal was decided against CSL. However for both the assessment years orders are yet to be given effect to by the reassessing officer.

(c) The Company has filed appeal before the ITAT against the order of Assessing Officer/ Commissioner of Income Tax (Appeals) and the appeal was partly allowed in favor of Company, the effect to the order has not yet been given by the reassessing officer.

(II) Sales Tax Assessment under KGST Act

The Sales Tax assessments under Kerala General Sales Tax Act up to the Assessment Year 2004-05 have been completed and orders were issued for all the years except for the year 2002-03 & 2003-04. Due to apparent mistake in the orders issued for the year 2000-01 and 2001-02, applications have been filed for rectification of the orders. Pending rectification to the assessment orders the demands thereto have been shown under Contingent Liabilities. For the Assessment year 2004-05, the Deputy Commissioner (Appeals) has dismissed the appeal filed by the Company against the demand for Rs.202.22 lakhs. The Company is in the process of filing appeal to Tribunal.

(III) Sales Tax Assessments under KVAT Act

The KVAT assessments from Assessment Year 2005-06 to Assessment Year 2007-08 have been completed and assessment orders were issued for Assessment Year 2005-06 and Assessment Year 2007-08 with a demand of Rs. 2836.63 lakhs and Rs. 5554.71 lakhs respectively. The appeals filed by the Company against the above orders, before the Deputy Commissioner (Appeals) have been partially decided in favour of the Company and remanded for fresh assessments. Accordingly the demands as per the original assessment orders have become null. As such no demand exists as on reporting date. Pending receipt of the revised assessment order, the company filed appeal before the Hon’ble KVAT Appellate Tribunal on the other issues. The appeal is currently pending before the Tribunal. Assessment order for the year 2006-07 is pending.

2.a. The Environmental Clearances, for the ISRF project received from Ministry of Environment, Forest and Climate Change (MOEFCC), is subject to obtaining prior clearance of the Standing Committee of the National Board for Wildlife (“NBWL”). Pursuant to the SEBI Exemption letter dated July 14, 2017, SEBI had permitted the Company to utilize the net proceeds of the Initial Public Offer assigned towards the proposed ISRF project and utilize such funds raised once the necessary approvals for Environmental Clearance for the ISRF project are received. The Company had also undertaken to SEBI vide letter dated July 10, 2017 and further stated in the Prospectus dated August 4, 2017 that the net proceeds assigned for the proposed ISRF project shall be transferred to a separate bank account which would be utilised only after requisite pending approval(s) are received and all expenditure on the ISRF project shall be incurred through internal accruals till the time such pending approvals are received.

The State Board for Wild Life at their meeting held on August 16, 2017 specified compensatory mangrove afforestation by the Company as a condition while recommending the proposal to the NBWL. The Standing Committee of NBWL in their 46th meeting held on December 8, 2017 has recommended the Environmental Clearance for the ISRF project along with conditions imposed by the State Chief Wild Life Warden (CWLW). The condition imposed by State CWLW is to be complied during the implementation of the ISRF project and the matter has been taken up with the Forest Department, Government of Kerala and the process of identification of notified mangrove area for afforestation is underway. Accordingly, the Company has considered the date of Environmental clearance as January 9, 2018 and started utilisation of the funds set apart for this purpose after intimating SEBI vide letter dated January 17, 2018.

* As per Prospectus Filed

** Increase in IPO expenditure (Rs.172.10 lakhs) compared to the estimates is adjusted against amount specified for General Corporate Purpose

3. The dispute between M/s Apeejay Shipping Ltd (formerly known as Surendra Overseas Ltd) and the Company, in the matter of ship 005 was referred for arbitration by the Hon’ble Supreme Court of India. The arbitration award (July 2009) was in favour of the Company under which the Company is to receive Rs.2803.64 lakhs from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court, Ernakulam for passing a decree. M/s Apeejay Shipping Ltd has moved to the Sub Court to quash the Award of the Umpire and the Company has filed Counter Affidavit against this move. The matter is pending before the court. No credit has been taken in the books of account, pending final decree of the Court.

4. Permanent Machinery for Arbitration, Department of Public Enterprises, Govt. of India, has notified award in favour of the Company in the dispute between the Company and M/s Oil and Natural Gas Corporation Ltd (ONGC) on the Works Contract Tax issue and ONGC has paid to the Company the disputed sum along with interest amounting to Rs.2642.22 Lakhs as per the award. ONGC has gone on appeal before the Law Secretary, Ministry of Law & Justice against the award. Pending disposal of ONGC appeal, no adjustment has been made in the accounts.

5. Litigations : The Company is subject to legal proceedings and claims, in the ordinary course of business. The Company’s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the Company’s results of operation.

Details of material litigations as on 31 March 2018

M/s. Vigil Marine Services in 2004 raised claims towards Agency Commission payable for winning orders for ATCO Tugs. The arbitration proceedings commenced on 10 Oct 2004. Examination and cross examination of witnesses completed and posted the matter for arguments on 01 and 02 Feb 2014. The Arbitrator completed the proceedings and passed his award directing the Company to pay commission to M/s Vigil Marine Services at the rate of 5% of the ATCO contract value of U S Dollar 18.25 Million with interest @ 8% per annum. Aggrieved on this CSL filed Original Suit No 187/2016 before Sub Court, Ernakulam and obtained an interim order staying execution of the award.”

6. Corporate Social Responsibility (CSR) : As per section 135 of the Companies Act 2013, CSR committee has been formed by the Company. The areas of CSR activity includes Health Care, Education, Social Empowerment, etc., and those specified in Schedule VII of the Companies Act 2013. The utilisation of CSR funds are done through direct spending as per the recommendations of CSR committee. Details of amount required to be spent and the amount utilised are given below:

Nature of transaction - Transaction with other related parties

As CSL is a Government company under the control of Ministry of Shipping (MoS), the company has availed exemption from detailed disclosures prepared under Ind AS 24 with respect to related party transactions with Government and Government related entities.

However, as required under Ind AS 24, following are the individuvally significant transactions:

Transactions with Government and Government related entities by the parent company.

7. FINANCIAL INSTRUMENTS

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level II inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level III inputs are unobservable inputs for the asset or liability.

The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required)

Note:

1. The investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the directors believe that this provides a more meaningful presentation of medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

Investments included in level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value.The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

There were no transfers between Level 1 and 2 in the period.

2. Loans, Borrowings are at the market rates and therefore the carrying value is the fair value.

3. The carrying amount of trade receivables, trade and other payables and short term loans are considered to be the same as their fair value due to their short term nature.

Difference between carrying amounts and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.

8. Financial Risk Management Policy Financial Risk Management Objective and Policies:

The Company’s principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables and advances from customers. The main purpose of these financial liabilities is to finance the Company’s operations, projects under implementation and to provide guarantees to support its operations. The Company’s principal financial assets include Investment, loans and advances, trade and other receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. All derivative activities for risk management purposes are carried out by under the supervision of the Forex Risk Management Committee by assigning necessary resources. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market Risk

Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial Assets affected by market risk include loans and borrowings, deposits and derivative financial instruments.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

Foreign currency risk of the company is managed through a properly documented risk management policy approved by the board.

Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel, major machineries, equipments etc. Therefore, the Company plans its purchases closely to optimise the price.

Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

9. Segment Reporting

The Company has identified two major operating segments viz, Shipbuilding and Repair of ships/ offshore structures. Segment wise analysis has been made on the above basis and amounts allocated on a reasonable basis.

The Company has two major business segments -”Ship Building” and “Ship Repair”. Revenue under Ship building includes Rs. 144334.95 lakhs (Previous year: Rs. 131504.38 lakhs) from one Customers (Previous year: one Customer) having more than 10% revenue of the total revenue. And for Ship repair, revenue includes Rs. 40014.22 lakhs (Previous year: Rs. 38073.82 lakhs) from one customers (Previous year: one Customer) having more than 10% revenue of the total revenue.

10. Capital Management

The company’s objective when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.

For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The company is not subject to any externally imposed capital requirements.

To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings (including bonds).

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

10 a. In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided based on the work done.

10 b. Balance shown under Trade Receivables, Trade Payables , loans, deposits and claims are subject to confirmation and consequent reconciliation, if any

11.The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.

12. Figures in brackets denote negative figures.

13. Previous year figures have been regrouped and classified wherever necessary to conform to the current year presentation.

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Mar 31, 2011

1. Shipbuliding income of Rs 1,30,249.05 lakhs (previous year Rs 1,06,442.17 lakhs) includes revenue recognized under percentage of completion method amounting to Rs 1,03,504.28 lakhs (previous year Rs 73,294.91 lakhs) against incomplete vessels, shiprepair income includes income recognised under proportionate completion method amounting to Rs 4,756 lakhs (Previous year Rs 7,074 lakhs)

2. Income from Shiprepair is net of actual/ anticipated reductions amounting to Rs 899.17 lakhs (Previous year Rs 1,321.07 lakhs)

3. Income from scrap and scores is net of import duty paid on sale of bonded scrap and stores amounting to Rs 40.84 lakhs (Previous year Rs 42.74 lakhs.)

4. Interest on Deposit includes Rs 9.89 lakhs (previous year Rs 9.61 lakhs) being interest on fixed deposits (with Bank) of Rs 147.27 lakhs (previous year Rs 138.57 lakhs furnished as Earnest Money Deposit / Security Deposit.

5. Other deposits include fixed deposit with bank of Rs 147.27 lakhs (including interest) (previous year Rs 138.57 lakhs) made in the joint name with Chennai port Trust towards performance guarantee.

6.(i) The company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts denominated in currencies other than Indian Rupee. The counter part6y to the Company''s foreign currency forward contracts is generally a bank.

The company has designated all the outstanding Forward Exchange Contracts as Cash Flow Hedges. The changes in fair value of effective Forward Exchange Contracts are recognized directly in a Reserve account designated as Hedging Reserve Account and the ineffective portion is recognized immediately in the profit and loss account.

(ii) The Company has the following outstanding effective derivative contracts, which have been designated as Cash Flow Hedges, as on 31 March 2011.

(iii) In addition to the above Cash Flow Hedges, the Company has outstanding foreign exchange derivative contracts of firm commitment or highly probable forecast transactions and contracts without underlying transactions aggregating to Rs 37,403,91 lakhs (Previous Year Rs 7,3923.65 lakhs), the fair value determination of these contracts as on 31 March 2011 results in a profit of Rs 888.55 lakhs (previous year loss of Rs 2,640.36 lakhs.) Although these contracts are effective hedges from an economic perspective, they do not qualify for hedge accounting as per AS 30 and accordingly these are considered as ineffective hedges and changes in fair value recorded in the profit and Loss account.

7. Based on the decisions taken by the share holders in their meeting held on 17 March 2009, the fully paid equity shares of Rs 1000 each of the company has been sub divided into fully paid equity shares of Rs 10 each. The physical to issue of sub divided shares is pending for the return of original share certificates by the share holders.

8. The interest on customs duty due at the time of deboning material / scrap is accounted in the year of deboning.

9. Maintenance spares included in the inventory represent spares of general nature and are not related to a particular asset.

10. Sundry Debtors include debts amounting to Rs 1,03,255.30 lakhs (previous years Rs 68,614.09 lakhs) accounted on account of Income recognized under proportionate completion method pertaining to incomplete vessels against which stage payments received amounting to Rs 40,947.05 lakhs (previous year Rs 55,232.08 lakhs) for completed stages is shown as advance under current liabilities.

11. An amount of Rs 503 lakhs has been provided as contingencies in the accounts towards probable liquidated damages on the vessels to be delivered on dates beyond 31 March 2011 after considering the grace period.

12. There are no dues to Micro and Small Enterprises as on 31 March 2011 which are overdue and required to be disclosed as per MSMED Act 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

13. Capital reserve represents restoration charges received from M/s Indian Oil Corporation for laying pipeline through the company’s land.

14. The dispute between M/s Apecjay Shipping Ltd (formerly M/s Surendra Overseas Ltd) and the company, in the matter of Ship 005 was referred for arbitration by the Hon''ble Supreme Court of India, The arbitration award (July 2009) was in favour of the Company under which the company is to receive Rs 2803.64 lakhs from M/s Apecjay Shipping Ltd. The company has filed a perdition before sub court, Emakulam for passing a decree and the matter is pending, M/s Apecjay Shipping has moved the sub Court to quash the Award of the Umpire and the company has filed Counter Affidavir against this move. No credit has been taken in the books of accounts pending final decree of the Court.

15. The old Firefighting, Training Institute building costing Rs 59.12 lakhs which had a written down value of Rs 41.84 lakhs was demolished / written off during the year and approval from Government is awaited.

16. Employee benefits as per Accounting Standard 15 (Revised) ''Employee Benefits'' for the below mentioned defined benefits schemes has been provided in the accounts.

- Gratuity

- Earned leave / sick leave entitlements

In respect of Leave Travel Concession relating to the block period 2010-2013, provision amounting to Rs 131.28 lakhs towards unavailed portion has been retained considering the full eligibility of the employees in this behalf.

Actuarial valuation of leave entitlement and gratuity have been done with the following assumptions:

17. (i) The company had signed phasel Contract with Indian Navy for the construction of Indigenous Aircraft Carrier (P-71). The contract has two parts (a) Cost Plus contract (b) Fixed price contract. The commissioner of Commercial Taxes, Govt of Kerala has clarified that the contracts is a construction contract and delivery for vessel as ''sale of a charted as a chattel'' and is treated as a ''sale contract'' exigible to KVAT. Accordingly, the company has changed the method of accounting whereby all materials and expenses incurred during the year (which are reimbursable from Navy) has been charged to Profit & Loss account and grossed up with the value of work done and recognized as income and subsequently adjusted against the advance received from Navy. Due to the change in the method of accounting / presentation there is no impact on the profit or loss for the year or the value of assets or liabilities of the company at 31 March 2011 compared to those of previous year.

(ii) An amount of Rs 21,346.37 lakhs has been received from Indian Navy towards augmentation of infrastructure facilities for the construction of Indigenous Air Craft Carrier (IAC) project. Out of the fund received for infrastructure facilities, the company has spent Rs 17,901.41 lakhs (previous year Rs 16,595.84 lakhs) till date. Of this amount Rs 14,642.39 lakhs (previous year Rs 13,563.04 lakhs) has been adjusted by Indian Navy and the balance amount of Rs 3,259.02 lakhs (previous year Rs 3,032.80 lakhs) is pending for adjustment by Indian Navy.

18. The Income Tax Assessments of the company have been completed upto AY 2008-09. However, of the AY 2005-06 and 2008-09 a demand of Rs 19,22,679/- and Rs 8,65,436/- respectively has been raised. Against the above, the company has filed appeal before CIT(Appeals) in both case. pending hearing of the above cases, the demand for the AY 2005-06 and 2008-09 has been shown as contingent liability.

19. (i) The Sales Tax Assessments under KGST for the Assessment Years 2000-01, 2001-02 has been completed and Assessment order were issued. Due to apparent mistake in the order, applications have been filed for rectification of the orders. the rectified orders have not been issued so far. pending rectification to the assessment order for the year 2001-02, an amount of Rs 73.44 lakhs has been shown under contingent liabilities. The Assessment for the years 2002-03 and 2003-04 also been completed. The assessment orders have not been issued so far. The Asessment for the year 2004-05 has been completed and Assessment order has been issued with a tax due amounting to Rs 196.37 lakhs. Company has filed appeal before the DC(A) against the disallowance made by the Assessing Officer particularly with regard to the treatment of export sales which has been treated as a local sale by the department. pending disposal of the appeal, the tax due as per assessment order has been shown under contingent liabilities. Regarding assessments under KVAT Act, the assessment will be deemed to be completed if no notices are received by the assessee within 30 days of filing of returns. The Company has been filing its KVAT returns as per Rules and so far the company has not received any notice rejecting the returns filed expect for the year 2007-08. Department has issued a notice for the Assessment Year 2007-08 proposing to levy KVAT on the export sales effected by the company has filed replay. The hearing of the case is pending.

(ii) The Intelligence Officer, Commercial Taxes Department has issued notice on the company demanding Rs 2,546,82 lakhs towards penalty for non payment of KVAT of Rs 1,273,41 lakhs on the export of five Platform Supply Vessels (viz. BY 060-64) delivered to foreign buy in the year 2008-09, on the pretext that the export effected by the company is not a sale as envisaged in the CST Act, but a local sale exigible to KVAT @ 4.04% Against the above, the Company has field appeal before the Appellate Tribunal. Simultaneously company had also filed a Writ pension before Hon''ble High Court of Kerala for stay on the collection of the demand. Hon''ble High Court has granted absolute stay on the collection of demand till disposal of the appeal by the Appellate Tribunal with a direction to consider the various rulings given by the Hon''ble Supreme Court similar cases. Pending decision in the appeal, the penalty demand of Rs 2,546,82 lakhs has been shown as contingent liability.

20. In the case of contracts / sub-contracts wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided for based on the work done.

21. Balances of sundry debtors, loans and advances, deposits, claims and sundry creditors are subject to confirmation.

22. Figures in brackets denotes minus figures.

23. Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s presentations.

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Mar 31, 2010

1. Subsidy of Rs 11612.37 lakhs (previous year Rs 12624.14 lakhs) on shipbuilding includes subsidy amounting to Rs. 8510.60 lakhs (previous year Rs. 7000.07 lakhs) recognized proportionately against incomplete vessels. Shipbuilding income of Rs 89600.53 lakhs (previous year Rs 85988.48 lakhs) includes revenue relating to small crafts recognized under percentage completion method amounting to Rs.54119.42 lakhs (previous year Rs 33247.08 lakhs) against incomplete vessels. Ship repair income includes income recognised under proportionate completion method amounting to Rs. 7074 lakhs (previous year Rs 9490 lakhs)

2. Income from ship repair is net of actual/anticipated reductions amounting to Rs. 1321.07 lakhs (previous year Rs 2614.15 lakhs).

3. Income from scrap and stores is net of import duty paid on sale of bonded scrap and stores amounting to Rs.42.74 lakhs (previous year Rs. 86.53 lakhs).

4. Interest on Deposit includes Rs.9.61 lakhs (previous year Rs. 10.69 lakhs) being interest on fixed deposits (with Bank) of Rs. 138.57lakhs (previous year Rs 128.95 lakhs) furnished as Earnest Money Deposit/Security Deposit.

5. Other deposits include fixed deposit with bank of Rs.138.57 lakhs (including interest) (previous year Rs. 128.95 lakhs) made in the joint name with Chennai Port Trust towards performance guarantee.

6.(i) The company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts denominated in currencies other than Indian Rupee. The counter party to the company''s foreign currency forward contracts is generally a bank.

The company has designated all the outstanding Forward Exchange Contracts as cash Flow Hedges. The changes in fair value of effective Forward Exchange contracts are recognized directly in a Reserve account designated as Hedging Reserve Account and the ineffective portion is recognized immediately in the Profit and Loss Account.

(ii) The company has the following outstanding derivative contracts, which have been designated as Cash Flow Hedges, as on 31 Mar 10:

(iv) In addition to the above cash flow hedges, the company has outstanding foreign exchange derivative contracts of firm commitment or highly probable forecast transactions and contracts without underlying transactions aggregating to Rs.73923.65 (Previous year Rs 42415.35 lakhs), the fair value determination of these contracts as on 31.03.10 results in a loss of Rs 2640.36 lakhs(Previous year Rs 6800.00 lakhs). Although these contracts are effective hedges from an economic perspective, they do not qualify for hedge accounting as per AS 30 and accordingly these are considered as ineffective hedges and changes in fair value recorded in the profit and loss account.

7. Based on the decisions taken by the share holders in their meeting held on 17/03/2009, the fully paid equity shares of Rs 1000 each of the company has been sub divided into fully paid equity shares of Rs 10 each. The physical re issue of sub divided shares is pending for the return of original share certificates by the share holders.

8. The interest on customs duty due at the time of debonding material/ scrap is accounted in the year of debonding.

9. Maintenance spares included in the inventory represent spares of general nature and are not related to a particular asset.

10. Sundry Debtors include debts amounting to Rs. 68614.09 lakhs (previous years Rs 36651.57 lakhs) accounted on account of income recognized under proportionate completion method pertaining to incomplete vessels against which stage payments received amounting to Rs.55232.08 lakhs (previous year Rs 33599.78 lakhs) for completed stages is shown as advance under current liabilities.

11. An amount of Rs 3625 lakhs has been provided as contingencies in the accounts, to cover possible losses the company may have to suffer, in the eventuality of possible cancellation of ship building contracts of ship numbers BY 77 & BY 78, as the vessels are getting delayed beyond the extended period given by ship owners.

12. Liquidated damages on capital works amounting to Rs 213.29 lakhs has not been taken credit pending final settlement with contractors.

13. There are no dues to Micro and Small Enterprises as on 31.03.2010 which are overdue and required to be disclosed as per MSMED Act 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

14. Capital reserve represents restoration charges received from M/s Indian Oil Corporation for laying pipeline through the company''s land.

15. The dispute between M/s Apeejay Shipping Ltd (formerly Surendra Overseas Ltd) and the company, in the matter of Ship 005 was referreel for arbitration by the Hon''ble Supreme Court of India. The arbitration award (July 2009) was in favour of the Company under which the company is to receive Rs 2803.64 lakhs from M/s Apeejay Shipping Ltd. The company has filed a petition before Sub Court, Emakulam for passing a decree and the matter is pending. No credit has been taken in the books of accounts, pending final decree of the Court.

16. Govt of India, Dept of Public Enterprises, has issued an Office Memorandum No.2(81)/08-DPE(WC.)-CL XVI/2009 dated 02 Jul 2009, wherein it was directed to create a corpus in order to take care of medical anel other emergency needs of retired employees of CPSEs. In line with the above, the Board of Directors of the company has approved a scheme for the medical benefits of its retired employees and forwarded the scheme to the Administrative Ministry for approval. Subject to the approval of the Ministry, the company has provided an amount of Rs 371.45 lakhs in the accounts.

17. Employee benefits as per Accounting standard 15 (Revised) ''Employee Benefits'' for the below mentioned defined benefits schemes has been provided in the accounts.

- Gratuity

- Earned leave/ sick leave entitlement

In respect of Leave Travel Concession relating to the block period 2010-2013, the unavailed portion amounting to Rs 181.93 lakhs has been provided in full considering the eligibility of the employees in this behalf.

This includes Rs 86.44 lakhs recognised daring last year which has been adjusted in the Profit & Loss account of the current year.

Gratuity expenses includes Rs 4.47 lakhs (Previous year Rs 6.34 lakhs), being amount paid towards insurance premium (Risk cate).

18.(i) The company had signed Phase I contract with Indian Navy for the construction of Indigenous Aircraft Carrier (P-71). The contract has two parts (a) Cost Plus contract (b) Fixed price contract. All materials are procured under the Cost Plus part of the contract- The fixed price part of phase I of the contract amounting to Rs 1160 crs represents the price towards yard efforts for the construction of the ship upto launching of the vessel. This contract has been treated as a works contract and all accounting including income recognition has been treated accordingly. The company had sought clarification u/s 94 of KYAT Act to ascertain the incidence of KVAT on the 1AC contract and the Office of the Commissioner of Commercial Tax has clarified that it is a ''sale contract'', which is being contested by the company.

The company has taken up the issue with Indian Navy to get exemption from all tax levies. Pending decisions on the above, the company continues to treat this as a Works Contract'' in the books of account. Efforts are being taken by the owners to get tax exemption for the whole project. No liability on taxes has been provided in the accounts as, as per the contract all taxes are reimburseable to the company by the owner at actuals.

(ii) An amount of Rs. 139928.00 lakhs has been accounted as advance towards the cost plus part of the contract. This amount includes Rs 12901.43 lakhs being interest credited on advances and Rs 216.94 lakhs being sale proceeds of 1146.73 MT steel scrap, net of 5 % handling charges. Out of the fund received for cost plus part of the contract, the company hail spent Rs 109795.50 lakhs till date. Against this, Rs 81351.20 lakhs has been adjusted by Indian Navy and the balance amount of Rs 28444.30 lakhs is pending for adjustment. Details are as follows:

(iii) Advance received from Indian Navy after 01.04.2005 towards cost plus activities of IAC project has been deposited in a separate bank account. As per the contract, the amount held in this account belongs to Navy and the interest thereon accrues to the Navy. An amount of Rs 3754.68 lakhs has been credited by the bank as interest during the current year. Apart from this an amount of Rs 1325.26 lakhs towards interest on advance drawn by the company before opening the flexi deposit account has been credited to the Navy''s account and the company has charged off this amount as interest in the current year.

(iv) An amount of Rs 69600 lakhs (Previous year Rs 40600 lakhs) has been received as advance against stage I ,11,111 and IV payments under the fixed price part Phase 1 contract. Against this Rs 52219.11lakhs (including income recognized during previous years Rs 33043.62 lakhs) has been adjusted being income recognized under fixed price contract.

(v) During the year Rs 3136.30 lakhs (previous year-Rs. 3836.38 lakhs) has been recognized as income from cost plus activities of IAC contract. Since as per the contract, the ownership of the materials procured for IAC vest with the Indian Navy, materials/stores consumption shown in the Profit and Loss account and Inventory in the Balance Sheet do not include the cost relating to materials/stores purchased by the Company in its own name on behalf of the N avy, as per the details below:

(vi) An amount of Rs 21346.37 lakhs has been received from Indian Navy towards augmentation of infrastructure facilities for the construction of Indigenous Air craft carrier (IAQ project .Out of the fund received for infrastructure facilities, the company had spent Rs 16595.84 lakhs (previous year 15782.73 lakhs) till date. Of this amount, Rs 13563.04 lakhs (previous y ear Rs 10665.82 lakhs) has been adjusted by Indian Navy and the balance amount of Rs 3032.80 lakhs (previous year Rs 5116.91 lakhs) is pending for adjustment by Indian Navy.

a) Maintenance and upkeep charges due at the rate of 5% of the infrastructure equipment cost, amounting to Rs 962 lakhs upto 31 Mar 2010, as recommended by the Contracts Negotiation Committee of Indian Navy, has not been taken credit for, pending approval by appropriate authorities.

19. The Income Tax assessments of the company are completed upto the AY 2006-07. However, the Income Tax assessment for the Assessment Year 1999-2000 was reopened for disallowing claim of set off of carry forward depreciation allowance against income from other sources which was confirmed by CIT(A). The appeal filed by the company'' against the order of CIT(A) before the ITAT is pending. The ITAT has on similar issues of earlier years disposed off the appeals in favour of the company. As such no effect has been made in the accounts.

20. (i)The sales tax assessments under KGST Act for the assessment years 2000-01 to 2004-05 are pending with the Commercial Tax Department. Regarding assessments under KYAT Act, the assessment will be deemed to be complete if no notices are received by the assessee within 30 days of filing of Returns. The company has been filing its KVAT returns as per Rules and so far has not received any notice rejecting the returns filed.

(ii) The Intelligence Officer, Commercial Taxes department has issued notice on CSL demanding Rs 2546.82 lakhs towards penalty'' for non payment of KVAT of Rs 1273.41 lakhs due on the export of five Platform Supply Vessels (viz BY 061-064) delivered to foreign buyers in 2008-09 on the pretext that the export effected by CSL is not an export sale as invisaged in the CST Act, but a local sale exigible to KVAT @ 4.04% Since the order of the Intelligence officer was illegal, arbitrary and not justifiable, company has filed appeal before DC(A) against the order of the Intelligence Officer. Simultaneously Company has filed a writ petition before the Hon''ble High Court of Kerala for stay on collection of lax. Hon''ble High Court has granted absolute stay against the order of the Intelligence Officer for collection of the demand till disposal of appeal by DC (A).Pending decision in the appeal filed by the company, the penalty demand of Rs 2546.82 lakhs has been shown as contingent liability.

(f) Method of revenue recognition - Percentage completion method

(g) Method used to determine the stage of completion- Stage of completion is measured in the proportion of expenses incurred till the end of the year to the estimated total cost of completion of the project or percentage of physical completion whichever is less.

21. In the case of contracts/sub-contracts, wherever final hills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided for based on the work done.

22. Balances of sundry debtors, loans and advances, deposits, claims and sundry creditors are subject to confirmation.

23. Figures in brackets denotes minus figures.

24. Previous year''s figures have been regrouped and reclassified wherever necessary to confirm with current year''s presentations.

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Mar 31, 2009

1. Subsidy of Rs 12624.14 lakhs (previous year Rs 9473.59 lakhs) on shipbuilding includes subsidy amounting to Rs.7000.07 lakhs (previous year Rs. 3849.96 lakhs) recognized proportionately against incomplete vessels. Shipbuilding income of Rs 85988.48 lakhs (previous year Rs 48690.21 lakhs) includes revenue relating to small crafts recognized under percentage completion method amounting to Rs.33247.08 lakhs (previous year Rs 18426 lakhs) against incomplete vessels. Ship repair income includes income recognised under proportionate completion method amounting to Rs. 9490 lakhs (previous year Rs 14368.91 lakhs)

2. Income from ship repair is net of actual/anticipated reductions amounting to Rs.2614.15 lakhs (previous year Rs 203.07 lakhs).

3. Income from scrap and stores is net of import duty paid on sale of bonded scrap and stores amounting to Rs.86.53 lakhs (previous year Rs.198.68 lakhs).

4. Interest on Deposit includes Rs. 10.69 lakhs (previous year Rs. 8.09 lakhs) being interest on fixed deposits (with Bank) of Rs. 128.95 lakhs (previous year Rs 118.26 lakhs) furnished as Earnest Money Deposit/Security Deposit.

5.Other deposits include fixed deposit of Rs 128.95 lakhs (including interest) (previous year Rs 118.26 lakhs) made in the joint name with Chennai Port Trust towards performance guarantee.

6.(i) The company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts denominated in currencies other than Indian Rupee. The counter party to the companys foreign currency forward contracts is generally a bank.

During the previous year, pending implementation of Accounting Standard 30 (AS 30) for recording the forward exchange contracts entered into to hedge foreign currency risk of a firm commitment or highly probable forecast transaction, the company was following the practice of making provision on marked to market basis by recognizing the loss in statement of Profit & Loss account as on the reporting date.

Effective from 1st April 2008, the company has designated all the outstanding Forward Exchange Contracts as cash Flow Hedges. The changes in fair value of effective Forward Exchange contracts are recognized directly in a Reserve account designated as Hedging Reserve Account and the ineffective portion is recognized immediately in the Profit and Loss Account.

Had the company followed the same policy as in the previous year, the current year profit would have been lower by Rs 44637.42 lakhs and the profit after tax would have become a loss of Rs 28630.39 lakhs. Consequent to this change in accounting for these contracts, the share holders fund is reduced by Rs 44637.42 lakhs under a separate account named Hedging Reserve Account and the current liabilities higher by an equivalent amount.

(iv) In addition to the above cash flow hedges the company has outstanding foreign exchange derivative contracts of firm commitment or highly probable forecast transactions aggregating to Rs.42415.35 lakhs (Previous year Rs nil), the fair value determination of these contracts as on 31.03.09 results in a loss of Rs 6800.00 lakhs (Previous year

Rs. NIL lakhs). Although these contracts are effective hedges from an economic perspective, they do not qualify for hedge accounting as per AS 30 and accordingly these are considered as ineffective hedges and changes in fair value recorded in the profit and loss account.

(v) Consequent to the change in the method of accounting for forward contracts with firm commitment or highly probable forecast transactions by implementing AS-30, the provision made on marked to market basis during previous year amounting to Rs 3713.72 lakhs was written back to Profit and Loss account. This amount written back is disclosed as net of provision made for hedging contracts which were considered as ineffective based on assessment of effectiveness as on 31.03.2009 amounting to Rs 6800.00 lakhs.

7. Based on the decisions taken by the share holders in their meeting held on 17/03/2009, the fully paid equity shares of Rs 1000 each of the company has been sub divided into fully paid equity shares of Rs.10 each. The physical re issue of sub divided shares is pending for the return of original share certificates by the share holders.

8. The company has obtained legal opinion with regard to the tax liability of Air Defence ship under construction. Based on the legal opinion received the provision made for tax in the accounts during previous year amounting to Rs 3087 lacs is reversed during the year by crediting the account of the Indian Navy.

9. Slave dock has been depreciated at the rate of 7% applicable for dredgers, barges as per item no IV (I) (ii) of Schedule XIV of Companies Act.

10. The interest on customs duty due at the time of debonding material/scrap is accounted in the year of debonding.

11. Maintenance spares included in the inventory represent spares of general nature and are not related to a particular asset.

12. Sundry Debtors include debts amounting to Rs.36651.57 lakhs (previous years Rs 18426 lakhs) accounted on account of income recognized under proportionate completion method pertaining to incomplete vessels against which stage payments received amounting to Rs.33599.78 lakhs (previous year Rs 34240.92 lakhs) for completed stages is shown as advance under current liabilities.

13. There are no dues to Micro and Small Enterprises as

on 31.03.2009 which are overdue and required to be disclosed as per MSMED Act 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

14. Capital reserve represents restoration charges received from M/s Indian Oil Corporation for laying pipeline through the companys land.

15. Salary revision of non- unionized supervisors and officers was due from 01/01/2007. Vide its OM dated 26/11 /2008, the DPE has issued orders on the salary revision of officers and supervisors. The Presidential order for the implementation of the above has been received on 31 Mar 2009. The effect of the above orders has been worked out and an amount of Rs 2519.20 lakhs has been provided in the accounts.

In the case of workmen, the wage revision is due from 01.04.2007 and the wage negotiation has been initiated. An amount of Rs 2279.10 lakhs has been provided in the accounts during the year towards possible liabilities on this account.

16. Employee benefits as per Accounting standard 15 ( Revised) Employee Benefits for the below mentioned defined benefits schemes has been provided in the accounts.

- Gratuity

- Earned leave/sick leave entitlement

In respect of Leave Travel Concession relating to the block period 2006-09, the unavailed portion amounting to Rs 44.10 lakhs has been retained considering the eligible period of service rendered by the employees.

Liability in respect of sick leave entitlement of workmen amounting to Rs 85.64 lakhs has been retained on absolute valuation basis since they are not entitled for encashment on retirement and the balance of provision made in earlier years amounting to Rs l57.36 lakhs has been written back as prior period income.Gratuity expenses includes Rs 634272, being amount paid towards insurance premium (Risk care).

17. (i) An amount of Rs 21346.37 lakhs has been received from Indian Navy towards augmentation of infrastructure facilities for the construction of Indigenous Air craft carrier (LAC) project .Out of the fund received for infrastructure facilities, the company had spent Rs 15782.73 lakhs till date. Of this amount ,Rs 10665.82 lakhs has been adjusted by Indian Navy and the balance amount of Rs 5116.91 lakhs (previous year Rs 5076.33 lakhs) is pending for adjustment by Indian Navy.

(ii) Details of infrastructure expenditure incurred so far under different heads of Customer Financed Assets owned by Navy are as follows:

a) Cost of infrastructure facilities which have been met out of funds from Navy and adjusted by Indian Navy.

18. Advance received from Indian Navy after 01.04.2005 towards cost plus activities of IAC project has been deposited in a separate bank account. As per the contract the amount held in this account belongs to Navy and the interest thereon accrues to the Navy. Accordingly an amount of Rs.7821.49 lakhs (including interest accrued upto the previous year Rs 3533.471akhs) earned as interest so far has been transferred to the Navys account.

19. The Income Tax assessment of the company are completed upto the AY 2005-06. However, the Income Tax assessment for the Assessment Year 1999-2000 was reopened for disallowing claim of set off of carry forward depreciation allowance against income from other sources which was confirmed by CIT(A). The appeal filed by the company against the order of CIT(A) before the ITAT is pending. The ITAT has on similar issues of earlier years disposed off the appeals in favour of the company. As such no effect has been made in the accounts.

20. The sales tax assessments under KGST Act for the assessment years 2000-01 to 2004-05 and under the KVAT Act from 2005-06 onwards are pending with the Commercial Tax Department.

21. Accounting for taxes on Income AS.22 - The break-up of Deferred Tax Assets and Liabilities as on 31.03.2009 as against 31.03.2008 is detailed below, which results in Net Deferred Tax Asset. Consequent to this the amount credited to Profit & Loss account is of Rs 3971.48 lakhs.

22. In the case of contracts/sub-contracts, wherever final bills are not submitted by the contractors for the work done as at the close of the year, liability is estimated and provided for based on the work done.

23. Balances of sundry debtors, loans and advances, deposits, claims and sundry creditors are subject to confirmation.

24. Figures in brackets denotes minus figures.

25. Previous years figures have been regrouped and reclassified wherever necessary to confirm with current years presentations.