Cochin Shipyard Ltd Auditor Reports

To

The Members of COCHIN SHIPYARD LIMITED

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the standalone financial statements of Cochin Shipyard Limited (the Company) which comprises the standalone Balance Sheet as at March 31, 2026, and the standalone Statement of Profit and Loss (including other comprehensive income), standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information (hereinafter referred to as the Standalone Financial Statements).

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (Ind AS) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter

4. Suspension of construction of two passenger vessels and related uncertainties:

In 2016, the Company entered into a contract with the Administration of a Union Territory of India for the construction of two passenger vessels at a total contract value of H81,900 lakhs (excluding taxes and foreign exchange variation). The vessels were launched in January 2020 and August 2022, respectively.

As at the reporting date, approximately 55% of the construction work, up to the fourth stage, has been completed and payments aggregating to H66,503.63 lakhs (Previous year: H66,503.63 lakhs) have been received from the Administration. The fifth and final stage is linked to delivery of the vessels.

Subsequently, the said Administration of a Union Territory has expressed its intention to take delivery of one vessel, while the other vessel is proposed to be taken over by another Administration of a Union Territory, both subject to certain reconfigurations. However, the scope of modifications and related commercial terms, including reimbursement of costs, are yet to be finalised between the parties. Pending receipt of the necessary approvals and finalisation of the commercial arrangements, further construction activities remain suspended.

Accordingly, the Company expressed its inability to determine the financial impact, if any, arising from factors such as ageing of the vessels due to prolonged inactivity, occupation of berthing space and annual revalidation costs of bank guarantees amounting to RS.1,12,411.88 lakhs (Previous year: RS.1,10,936.04 lakhs) furnished to the Administration (Refer Note No.34(5)).

5. Classification of Ship Building Financial Assistance:

The Management has represented that while determining the pricing of the vessels, it factor the Ship Building Financial Assistance (SBFA) which is an integral component of the shipbuilding process. Accordingly, during the year, the Company has regrouped the SBFA under Sale of products which was hitherto grouped under Other operating revenue (Refer Note No.34(6)).

Our opinion is not modified in respect of these matters.

Key Audit Matters

6. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone

Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Sl. Key Audit Matters No.	Auditors Response
1 Measurement of Physical Completion of Shipbuilding and Ship Repair Activities	Our audit procedures included:
(Refer Note 2.5 - Critical Accounting Estimates and Judgements and Note 3.11(a) - Revenue from Operations)	- Obtaining an understanding of the process for measuring physical progress and the systems used to capture project execution data.
The Company determines the stage of completion of shipbuilding and ship repair contracts based on the estimated physical progress of work performed as at the reporting date. The assessment of physical completion is carried out internally by Management, based on technical evaluations and inputs from the planning, design and engineering departments. Determining the extent of completion of each sub-activity requires significant technical judgement and estimation, particularly in assessing work performed but not yet certified.	- Evaluating the design and implementation of internal controls over monitoring and reporting of project progress.
	- Performing sample-based substantive procedures by examining supporting documentation, project reports, milestone certifications and M-Book records.
	- In selected cases, obtaining external expert reports to corroborate Managements assessment of stage of completion.
Given the technical complexity and the reliance on internal progress of assessments, measurement of physical completion was considered a Key Audit Matter.	While we performed the above procedures, the measurement of physical completion inherently involves technical evaluation, and we placed reliance on Managements technical and activity-based assessments.
2 Recognition of Revenue -Shipbuilding and Ship Repair Contracts	Our audit procedures included:
(Refer to Note 3.11(a) - Material Accounting Policy Information relating to Revenue Recognition, Note 34 - Revenue from Operations, and Note 45 - Additional Disclosures under Ind AS 115, Revenue from Contracts with Customers)	- Evaluating the appropriateness of the Companys revenue recognition policies and their compliance with Ind AS 115.
The Company recognises revenue from shipbuilding and ship repair contracts over the time in accordance with Ind AS 115 - Revenue from Contracts with Customers.	- Testing key internal controls over identification of performance obligations, estimation of total contract costs, assessment of contingencies, evaluation of contract modifications, and recognition of variable consideration.
Revenue recognition involves significant judgement in identifying performance obligations, determining the transaction price (including variable consideration such as change orders and claims), assessing the Companys enforceable right to receive payment for performance completed to date, estimating total contract costs and costs to complete, incorporating cost contingencies for contract-specific risks, and recognising expected losses on onerous contracts when such losses become probable. Given the magnitude of revenue and the complexity of contract accounting under Ind AS 115, we identified this as a Key Audit Matter.	- Examining selected contracts, amendments and related documentation to assess Managements determination of transaction price and contractual rights.
	- Comparing costs incurred to date with Managements cost-to-complete estimates and performing retrospective review of prior estimates against actual outcomes.
	- Evaluating Managements assessment of variable consideration through review of contractual terms, customer correspondence and, where relevant, legal assessments.
	- Performing analytical procedures to identify unusual revenue trends, loss-making or onerous contracts, and significant changes in cost estimates.
	- Assessing the adequacy of related disclosures in accordance with Ind AS 115 and Schedule III of the Act.
	Based on the procedures performed, we did not identify any material exceptions in respect of the Companys application of Ind AS 115.

Other Information

7. The Companys Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys Annual Report, including the Directors Report and Management Discussion and Analysis Report, but does not include the Standalone Financial Statements and our Auditors Report thereon. The Companys Annual Report is expected to be made available to us after the date of this Auditors Report. Our opinion on the Standalone Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.

8. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

9. When we read the report containing other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to Those Charged With Governance and take necessary actions, as applicable under the relevant laws and regulations. As on the date of this report, the other information was not made available to us by the Management. Accordingly, we are unable to comment on this matter.

Managements and Board of Directors Responsibilities for the Standalone Financial Statements

10. The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act.

11. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; selection of appropriate accounting software for ensuring compliance with applicable laws and regulations relating to maintenance of books of account and audit trail requirements; making judgments and estimates that are

reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

Auditors Responsibility for the Audit of the Standalone Financial Statements

14. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

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

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)

(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

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

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

16. Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in.

(i) Planning the scope of our audit work and in evaluating the results of our work: and

(ii) To evaluate the effect of any identified misstatements in the Standalone Financial Statements.

17. We communicate with Those Charged With Governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

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

Other Matters

20. The Standalone Financial Statements of the Company for the financial year ended March 31, 2025 were audited by the predecessor auditors, whose Audit Report dated May 15, 2025 had expressed an unmodified opinion on that Standalone Financial Statement. Our opinion on the Standalone Financial Statement is not modified in respect of this matter.

21. We draw attention to the fact that, for the year ended March 31, 2026, the Company initiated the process of obtaining balance confirmations from Trade Receivables and Trade Payables. As at the date of our report, only a limited number of such confirmations have been received. In cases where confirmations were not available, we performed alternative audit procedures, including verification of underlying contract documents, invoices raised, subsequent receipts/ payments, and review of related correspondence and follow-up communications.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

24. Non-Compliance with Composition of the Board and Board Committees

We draw attention to the fact that, during the year, the requisite number of Non-Officiai (Independent) Directors was not in place, resulting in non-compliance with the provisions relating to the composition of the Board and certain mandatory committees thereof, as required under the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), as amended from time to time. Consequently, the Company did not have a duly constituted Audit Committee in accordance with Section 177 of the Act and Regulation 18 of the SEBI LODR Regulations, nor a duly constituted Nomination and Remuneration Committee as required under Section 178 of the Act and Regulation 19 of the SEBI LODR Regulations.

Accordingly, the Standalone Financial Statement for the year ended March 31, 2026, is not reviewed by the Audit Committee in accordance with the aforesaid provisions. The Management has informed us that, being a Central Public Sector Enterprise (CPSE), the power to appoint Directors vests with the Government of India, and necessary communications have been made to the Government for the appointment of the required number of Independent Directors.

Our opinion is not modified in respect of this matter.

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

a. We have sought and obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper, adequate returns have been received from all the units of the Company;

c. The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended thereon;

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

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure C . Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to financial statements;

g. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of Section 197(16) of the Act, as amended, the provisions of Section 197 read with Schedule V of the Act, relating to managerial remuneration, are not applicable to the Company, being a Government Company, in terms of the Ministry of Corporate Affairs Notification no. G.S.R. 463(E) dated June 5, 2015;

h. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in

our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements- Refer Note No.48 to the Standalone Financial Statements;

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

iii. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Company during the year ended March 31,2026;

iv. a. The Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The Management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

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

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

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

a. The feature of recording audit trail (edit log) facility was 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 the SAP database tables is not being carried out;

b. Security audit log was enabled in the ERP. The feature of recording audit trail (edit log) facility of the accounting software was enabled during the year under audit;

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

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

For Babu A. Kallivayalil & Co.,

Chartered Accountants, Firm Registration No. 05374S

Kochi	Alexander Nallanickal Koshy Partner, Membership No. 007448
May 15, 2026	UDIN: 26007448ZHJUZE3490

Annexure A to the Independent Auditors Report

(Referred to in ParagrapRs 22 under Report on Other Legal and Regulatory Requirements section of our report of even date to the Members of the Company)

REPORT ON DIRECTIONS ISSUED BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA under section 143(5) of the Companies Act, 2013

I. Assess the fair valuation of all the investments, both quoted and unquoted, made directly by the Company or through Trusts, for Post retirement benefits of the employees. This includes verifying valuation methodologies, ensuring consistency with Ind AS and reviewing supporting documentation. The auditor shall provide a brief note on the valuation approach, its reasonability, and compliance with applicable regulations, reporting any material deviations or misstatements.

AH the investments made directly by the Company or through Trusts, for Post-retirement benefits of the employees, have been valued appropriately in accordance with the applicable financial reporting framework and applicable regulations. The valuation approach and valuation methodologies applied by the Company for these investments are appropriate and reasonable. No material deviations or misstatements have been observed. A brief note on the valuation approach is attached below:

Brief Note on Valuation Approach

The Company administers Post-retirement employee benefit plans through separate legally constituted Trusts, namely the Cochin Shipyard Limited Employees Group Gratuity (CSLEGG) Trust and the Cochin Shipyard Limited Employees Contributory Provident Fund (CSLECPF) Trust. The Gratuity Trust represents a funded defined benefit plan governed by the Payment of Gratuity Act, 1972. The Provident Fund Trust, by virtue of the interest rate guarantee provided to members, gives rise to a defined benefit obligation in accordance with Ind AS 19, Employee Benefits.

The defined benefit obligations in respect of the aforesaid plans have been determined by an independent qualified Consulting Actuary using the Projected Unit Credit Method, which is the actuarial valuation method prescribed under Ind AS 19. The actuarial assumptions, including the discount rate, have been determined with reference to market yields on Government securities as at the valuation date, based on the Zero Coupon Sovereign Rupee Yield Curve published by the Clearing Corporation of India Limited (CCIL), in accordance with the requirements of Ind AS 19.

The valuation methodologies applied to the principal categories of investments are summarised below:

Investment Category	Valuation Basis
LIC Group Gratuity Master Policy	Valued based on the fund balance together with interest declared by LIC.
Central Government Securities, State Government Securities and Securities of Public Financial Institutions	Valued in accordance with the applicable accounting and regulatory requirements governing such investments (Cost).
Mutual Fund Investments	Valued based on the Net Asset Value (NAV) prevailing as at the reporting date.

We have also considered the certification and supporting documentation made available by Management regarding compliance of the investment portfolio with the prescribed investment pattern and applicable regulatory requirements.

As the statutory audits of the Trusts for the financial year ended March 31, 2026 were not completed as at the date of this report, our review has been based on the latest audited financial statements made available to us. In addition, we have reviewed the investment statements, actuarial valuation reports and other relevant records relating to the financial year 2025-26 made available to us.

II. Whether the Company has a system in place to process all the accounting transactions through IT systemRs If yes, whether review of this system and controls that are significant to the Companies financial reporting process as well as cyber security has been done and material discrepancies found, if any, have been suitably reportedRs The implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications may also be reported.

The Company has a system in place to process ail the accounting transactions through IT system and the same are subject to periodic reviews, and no material discrepancies or significant weaknesses affecting financial reporting were reported during the year.

As confirmed by the Management, there were no accounting transactions processed outside the Companys IT system during the year.

III. Whether funds (grants/ subsidy etc.) received/ receivable for specific schemes from Central/ State Government or its agencies were properly accounted for as per the applicable accounting standards or norms and whether the received funds were utilised as per its terms and conditionsRs Whether accounting of interest earned on grants received has been done as per terms and conditions of the Grant. List the cases of deviation.

Based on the information and explanation provided to us and based on the cases verified by us, the Company has properly accounted for the funds received and receivable under schemes of the Central Government in accordance with the applicable accounting standards and the same were utilised by the Company in accordance with the prescribed terms and conditions. In most of the cases, grants are received after incurring the cost and interest earned, if any, cannot be separately determined.

IV. Whether the Company has identified the key Risk areasRs If yes, whether the Company has formulated any Risk Management Policy to mitigate these risksRs If yes, (a) whether the Risk Management Policy has been formulated considering global best practicesRs (b) whether the Company has identified its data assets and whether it has been valued appropriatelyRs

The Company has generally identified major key risk areas and formulated a Risk Management Policy to mitigate such risks. The overall risk governance framework is overseen by the Board Level Risk Management Committee (BLRMC), Chief Risk Officer (CRO) and Risk Coordinators, ensuring effective identification, assessment, monitoring, and mitigation of risks.

a) As represented by the Management, the Risk Management Policy is aligned with the principles and processes of ISO 31000, a globally recognized framework for risk management; however, the Company has not obtained formal ISO 31000 certification.

b) The Company has evaluated its data-related assets with reference to the requirements of Ind AS 38 - Intangible Assets and the applicable financial reporting framework. Data-related assets that satisfy both the identification and recognition criteria prescribed under Ind AS 38, including identifiability, control, probable future economic benefits, and reliable measurement of cost, have only been recognised, measured, and disclosed in the financial statements.

V. Whether the Company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations of SEBI, Department of Investment and Public Asset Management, Ministry of Corporate Affairs, Department of Public Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National Payments Corporation of India wherever applicableRs If not, the cases of deviation may be highlighted.

Based on the information and explanations given to us, Annual Secretarial Compliance Report, Secretarial Audit Report of the Company for the financial year ended March 31, 2026, and audit procedures carried out by us, the Company is generally complying with the SEBI (LODR) Regulations, 2015, and other applicable rules and regulations of SEBI, Department of Investment and Public Asset Management, Ministry of Corporate Affairs and Department of Public Enterprises, wherever applicable. We have been informed that there is no compliance requirement in relation to Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National Payments Corporation of India. However, certain exceptions noted by us are as follows:

a. Board Composition and Independent Directors

The Company did not have the requisite number of Independent Directors on its Board as required under the SEBI (LODR) Regulations, 2015, the Companies Act, 2013 and the Corporate Governance Guidelines for Central Public Sector Enterprises (CPSEs). There were no Independent Directors on the Board from April 1, 2025 to May 20, 2025 and only one Independent Director thereafter, resulting in non-compliance with requirements relating to Board composition and separate meetings of Independent Directors.

b. Woman Director / Woman Independent Director

The Company did not have a Woman Independent Director from April 1, 2025 to May 20, 2025 as required under the SEBI (LODR) Regulations, 2015 and was also non-compliant with the requirement of having at least one Woman Director under the Companies Act, 2013 during the said period.

c. Board Committees

Due to the shortage of Independent Directors, the Company did not have duly constituted Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, CSR and Sustainable Development Committee, and Risk Management Committee for part of the reporting period, resulting in consequential non-compliance relating to the constitution and conduct of committee meetings. The Stakeholders Relationship Committee, CSR and Sustainable Development Committee, and Risk Management Committee were reconstituted with effect from June 1, 2025 following the appointment of an Independent Director.

d. Board Meeting Quorum

The Board Meeting held on May 15, 2025 did not meet the quorum requirement prescribed under Regulation 17(2A) of the SEBI (LODR)

Regulations, as no Independent Director was on the Board on that date.

e. Audit Committee Functions

In the absence of a duly constituted Audit Committee, certain matters requiring Audit Committee review and approval, including omnibus approval/review of related party transactions, were placed directly before the Board.

f. Stock Exchange Penalties

The Stock Exchanges imposed fines on the Company for non-compliance relating to the appointment of Independent Directors and the consequent nonconstitution of statutory committees. The Company has filed/proposed to file waiver requests, considering that the appointment of Independent Directors is within the purview of the Government of India.

	For Babu A. Kallivayalil & Co.,
	Chartered Accountants,
	Firm Registration No. 05374S
	Alexander Nallanickal Koshy
	Partner,
Kochi	Membership No. 007448
May 15, 2026	UDIN: 26007448ZHJUZE3490

Annexure B to the Independent Auditors Report

(Referred to in paragrapRs 23 under Report on Other Legal and Regulatory Requirements section of our report of even date to the Members of the Company)

According to the information and explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. In respect of the Companys Property, Plant and Equipment, Right-of-Use assets and Intangible Assets:

a. A. The Company has maintained proper records showing full particulars, including quantitative details and situation of

Property, Plant and Equipment and relevant details of Right-of-Use assets in electronic form.

B. The Company has maintained proper records showing full particulars of intangible assets in electronic form.

b. The Company has a regular programme of physical verification of its Property, Plant and Equipment by which all major assets are verified in a phased manner. In accordance with this programme, certain Property, Plant and Equipment were verified during the year. In our opinion, this periodicity of physical verification is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. Based on our examination of the title deeds, lease agreements and other relevant records, we report that the title deeds of all immovable properties disclosed under Property, Plant and Equipment are held in the name of the Company. In respect of leasehold properties where the Company is the lessee, certain lease agreements/registrations are pending execution or registration as detailed below:

Description of property	Gross Carrying Value (Rs. in Lakhs)	Held in the name of	Whether promoter, director or their relative or employee	Period held since (year)	Reason for not being held in the name of the Company
International Ship Repair Facility (ISRF) Project Land - Phase I located at Willingdon Island, Ernakulam		Cochin Port Authority	No	2012	Pending Registration
ISRF Project Land - Phase II located at Willingdon Island, Ernakulam	27,691.68		No	2017	Pending Registration
Bed of backwater - Reclaimed Land			No	1977	Lease agreement not yet executed
CSL Mumbai Ship Repair Unit (CMSRU) - Berth No. 5,6,7 & 8 of Indira Dock, in Mazgaon, Mumbai	21,014.01	Mumbai Port Authority	No	2018	Pending Registration
CSL Kolkata Ship Repair Unit (CKSRU) - Berth No. 6 at Netaji Subash Dock and Two Dry Docks in Garden Reach, Kolkata.	10.92	Syama Prasad Mookerjee Port (earlier Kolkata Port Trust)	No	2019	Pending Registration
Staff Quarters No. B/1 & B/2 Port Hospital Park, Kolkata.	29.74	Syama Prasad Mookerjee Port (earlier Kolkata Port Trust)	No	2018	Lease agreement not been executed yet
Delhi Transit House Property No. D-306, 2 nd Floor, Defence Colony, New Delhi.	101.22	Mrs. Anita Singhal	No	2020	Pending Registration
Sub Contractors Parking Lot, Ernakulam	17.17	Mr. K. Pradeep Kumar	No	2023	Lease agreement not been executed yet

Description oF property	Gross Carrying Value (Rs. in Lakhs)	Held in the name of	Whether promoter, director or their relative or employee	Period held since (year)	Reason for not being held in the name of the Company
CVO Guest House at Panampilly Nagar, Ernakulam	11.11	Mr. Sree Kumar Nair and Ms. Sunanda Pillai Viswanth	No	2024	Pending Registration
Covered storage space at Central	57.48	Central	No	2024	Pending Registration
Warehouse, Kakkanad, Ernakulam	76.22	Warehousing		2024
	51.20	Corporation		2025
	53.52			2025
MBPA Berth No. 9ID at Indira Dock, Mumbai	4,669.80	Mumbai Port Authority	No	2025	Lease agreement not been executed yet

d. The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.

e. There are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii. In respect of Companys inventories

a. The inventories were physically verified during the year by the Management in accordance with the verification programme through an Inventory Physical Verification Committee constituted for this purpose. The Committee also carried out physical verification of inventories on a sample basis. The coverage and procedures of such verification are appropriate having regard to the size of the Company and the nature of its operations. The discrepancies noticed on such physical verification, if any, were not material and have been properly dealt with in the books of account.

As informed to us and based on the physical verification report provided to us, no discrepancies of 10% or more in the aggregate for each class of inventory were noticed on such physical verification when compared with the books of account.

b. The Company has been sanctioned working capital and other credit facilities aggregating in excess of H5 crore from banks. However, such facilities are not sanctioned on the basis of security of current assets. Accordingly, the Company is not required to file quarterly returns or statements with banks or financial institutions.

iii. During the year, the Company has not provided any security to companies, firms, limited liability partnerships or any other parties. The Company has granted loans, secured or unsecured, to employees and companies, granted advances in the nature of loans to employees, provided guarantee and made investments in a company. The Company has not provided guarantee or made investments in, or granted any loans, secured or unsecured, to firms or limited liability partnerships during the year.

a. The aggregate amount during the year and the balance outstanding at the balance sheet date with respect to such loans, guarantees and securities to subsidiaries, joint ventures and associates and to parties other than subsidiaries, joint ventures and associates are as under:

(Rs in lakhs)

Particulars	Guarantee	Security	Loans	Advances in the nature of loans
Aggregate amount granted/ provided during the year
Subsidiaries	12,243.52		500
Joint Ventures
Associates
Others			5.45	1.66

(Rs in lakhs)

Particulars	Guarantee	Security	Loans	Advances in the nature of loans
Balance outstanding as at Balance Sheet date in respect of the above cases
Subsidiaries	7,814.16		500
Joint Ventures
Associates
Others			4.58	0.40

b. The investments made, guarantees provided and the terms and conditions of the grant of all the above- mentioned loans and guarantees provided during the year are, in our opinion, not prejudicial to the Companys interest.

c. In respect of loans and advances granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts are regular.

d. In respect of loans and advances granted by the Company, there is no overdue amount remaining outstanding as at the Balance Sheet date.

e. No loan or advance in the nature of loan granted by the Company which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties;

f. The Company has not granted loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii)(f) of the Order is not applicable

iv. In respect of investments made, loans and guarantees given by the Company, in our opinion the provisions of Section 185 and 186 of the Companies Act, 2013 (the Act) have been complied with. There are no securities given by the Company.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable.

vi. The Company is maintaining the cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act.

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained.

We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues:

a. The Company is generally been regular in depositing undisputed applicable statutory dues including provident fund, employees state insurance, income tax, duty of customs, goods and service tax (GST), cess and any other statutory dues applicable to it with the appropriate authorities. The Company does not have liability in respect of service tax, duty of excise, sales tax and value added tax during the year since effective July 1, 2017, these statutory dues has been subsumed into GST;

There were no outstanding of aforesaid statutory dues as on March 31, 2026 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no statutory dues relating to GST, provident fund, employees state insurance, income-tax, sales tax, service tax, duty of customs, value added tax, cess or other statutory dues which have not been deposited on account of any dispute except in the cases provided as Annexure D ;

viii. There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during the year.

ix. a. The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

b. To the extent of our knowledge, the company has not been declared wilful defaulter by any bank or financial institution or government or any government authorities or other lender.

c. The Company has utilized the money obtained by way of term loans for the purpose for which they were obtained.

d. No funds raised on short-term basis have been used for long-term purposes by the Company.

e. The Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries. Further, the Company does not have any associates or joint ventures.

f. The Company has not raised loans during the year on the pledge of securities held in its subsidiaries. The Company does not hold any investment in any associate or joint venture during the year ended March 31, 2026.

x. a. The Company has not raised money by way of initial public offer or further public offer (including debt instrument) during the year. Accordingly, clause 3(x) (a) of the Order is not applicable.

b. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly, clause 3(x)(b) of the Order is not applicable.

xi. To the best of our knowledge,

a. No fraud by the Company or on the Company has been noticed or reported during the year.

b. No report has been filed by us or the predecessor auditors of the Company or cost auditors or secretarial auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with

the Central Government in accordance with section 143(12) of the Companies Act, 2013 during the year and up to the date of issuance of this report.

c. As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

xii. The Company is not a Nidhi company. Hence, the reporting under the provisions of clause (xii) (a), (b) and (c) of the order are not applicable.

xiii. In our opinion, the Company has entered into related party transactions in compliance with the provisions of Section 188 of the Companies Act, 2013, wherever applicable. Since no Audit Committee was constituted during the year, the requirements of Section 177 of the Act relating to approval of related party transactions were not complied with. The details of such related party transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards (Ind AS).

xiv. a. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of the business. However, the Company may consider to further strengthen certain aspects of the system to align more closely with the evolving scale and complexity of its operations.

b. We have obtained the internal audit reports for the period under audit, on a timely manner and duly considered by us, in determining the nature, timing and extent of our audit procedures.

xv. The Company has not entered into any non-cash transactions with directors or persons connected with its directors during the year and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting under the provisions of clause (xvi) (a), (b), (c) and (d) of the order does not arise. Further, in our opinion, there is no core investment Company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under this clause is not applicable to the Company.

xvii. The Company has not incurred any cash losses in the financial year and in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly reporting under this clause does not arise.

xix. On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements of the Company, our knowledge of the Board of Directors and Management plans and based on our examination of the evidences supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the Audit Report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the Audit Report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. With regard to Corporate Social Responsibility obligation of the Company, In our opinion:

a. In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project other than ongoing projects. Accordingly, clause 3(xx)(a) of the Order is not applicable.

b. There are no amount remaining unspent to the extent of its statutory obligation, in respect of ongoing projects. Further, the Company is not required to transferred the amount remaining unspent in respect of ongoing projects, to a Special Account as permitted under the sub-section (6) of section 135 of the Act.

xxi. The reporting under this clause is not applicable in respect of audit of Standalone Financial Statements. Accordingly, no comment in respect of this clause has been included in this report.

	For Babu A. Kallivayalil & Co., Chartered Accountants, Firm Registration No. 05374S
Kochi May 15, 2026	Alexander Nallanickal Koshy Partner, Membership No. 007448 UDIN: 26007448ZHJUZE3490

Annexure C to the Independent Auditors Report

(Referred to in ParagrapRs 25(f) under Report on Other Legal and Regulatory Requirements section of our report to the Members of the Company of even dated.)

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (THE ACT)

Opinion

We have audited the internal financial controls with reference to financial statements of Cochin Shipyard Limited (the Company) as of March 31, 2026, in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, reasonably adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at March 31, 2026, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the Guidance Note).

Managements and Board of Directors Responsibility for Internal Financial Controls

The Companys Management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (the Act).

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable

to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls with Reference to Financial Statements

A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Financial Statements for external purposes in accordance with generally accepted accounting principles.

A Companys internal financial controls with reference to financial statements includes those policies and procedures that:

a. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

b. provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and

c. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

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

For Babu A. Kallivayalil & Co.,

Chartered Accountants, Firm Registration No. 05374S

	Alexander Nallanickal Koshy
	Partner,
Kochi	Membership No. 007448
May 15, 2026	UDIN: 26007448ZHJUZE3490

Annexure - D to the Auditors Report- CARO 2020

(Referred to in Clause vii (b) of Annexure-B to the Auditors Report of our report to the Members of the Company of even dated.)

Nature of the statute	Nature of Dues		Amount (in lakhs) Disputed	Period to which the amount relates	Forum where dispute is pending
Employees State	Contribution		35.82	April 2008	Honble Employees
Insurance Act, 1948	Claim for Damages & Interest for belated remittance	19.84	to July 2013	State Insurance Court, Alappuzha
Finance Act,1994 (Service Tax)	Amount received from Indian Navy for	Service Tax	1647.47
	Design and Development of IAC	Interest*	6261.18	2004-05
		Penalty	1647.57
	Amount received from Indian Navy for construction of IAC accounted under the head Management Fee/handling charges on IAC P-71	Service Tax	323.04
		Interest*	1017.61	2009-10
		Penalty	323.14		CESTAT, Bangalore
	Reverse Charge Mechanism (RCM) on towing of barges along with security services, salvage operations, and guaranteed repair obligations.	Service Tax	279.46
		Interest*	556.19	2012-13 to
		Penalty	279.56	2016-17
	Differential turnover in ship repair activities (incl. adoption of lesser assessable value), and disallowance of CENVAT credit availed and utilized.	Service Tax Interest* Penalty	150.57 228.51 15.06	2015-16	Commissioner (Appeals)
Finance Act,1994 (Service Tax)	Levy of Service Tax on the Training fee received by the yard from the Marine Engineering Training Institute (METI) run by the Company	Service Tax	51.24	2016-17 to	Commissioner
		Interest	65.81	2017-18	(Appeals)
		Penalty	5.1	(upto June
				2017)
The Kerala Value Added Tax Act, 2003**	Additions in Taxable Turnover	Tax	787.32		Deputy
		Interest	582.62	2015-16	Commissioner of State Tax, Ernakulam
		Duty	269.30	March 2016
				to Dec 2016
		Duty	103.97
		Duty	306.97
		Duty	789.71	April 2017
		Duty	762.48
		Duty	1,790.93
The Customs Act,1962	Classification of Drawings & Plan for Indigenous Aircraft Carrier	Duty	230.54	Nov 2017	CESTAT, Bangalore
The Customs Act,1962		Tax (IGST)	296.26		CESTAT,Bangalore
		Duty	89.59	June 2018
		Tax (IGST)	108.48
		Duty	238.96	December
		Surcharge	23.90	2018
		Tax (IGST)	318.30
		Duty	191.22	June 2018
		Tax (IGST)	231.55

Nature of the statute	Nature of Dues		Amount (in lakhs) Disputed	Period to which the amount relates	Forum where dispute is pending
	Wrong claim of basic customs Duty	Duty #	5,857.03	July 2017
	Exemption Vide Notification No.50/	Interest	2,424.43
	2017 and Incorrect claim of 5% IGST	Duty	629.34	August 2017 to October 2017
	Input Tax Credit Vide Notification	Interest	128.97
	No.1/ 2017	Penalty	230.00
	Ineligible Input Tax Credit availed and	Tax	83.75	April 2018 to March 2022	Commissioner (Appeals), Central Tax & Central Excise
Central Goods and Service Tax Act, 2017 #	utilised	Penalty	8.38
	Ineligible Input Tax Credit availed and utilised and short payment of RCM	Tax	9.89
		Penalty	9.89
			126.26	2009-10	Commissioner
Income Tax Act,1961	Disallowance of Expenditures/ Provisions/ Deductions	911.07	2013-14	of Income Tax
		331.77	2016-17	(Appeals)
			20.76	2017-18
Department Appeals
	Erroneous remittance of service tax	Service Tax	376.67	2003-04 to
	on the amount of Management fee/ handling charges received/ accounted			2008-09
Finance Act,1994	from Indian Navy				CESTAT, Bangalore
(Service Tax)	Differential turnover in ship repair	Service Tax	2,339.64	2012-13 to
	activities (incl. adoption of lesser assessable value), and disallowance of CENVAT credit availed and utilized.			2014-15

* Interest on Service Tax cases, where Company has gone for appeal worked out approximately.

^^Rectification petition filed by the Company.

# Department has filed an appeal for non-confiscation of goods under section 111(m) & (o) and non-levy of penalty under section 112(a) of the Customs Act,1961.

	For Babu A. Kallivayalil & Co.,
	Chartered Accountants,
	Firm Registration No. 05374S
	Alexander Nallanickal Koshy
	Partner,
Kochi	Membership No. 007448
May 15, 2026	UDIN: 26007448ZHJUZE3490