Cochin Shipyard Ltd Auditor Reports

To

The Members of Cochin Shipyard Limited

Report on Audit of the Standalone Financial Statements

Opinion

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

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information, in the manner so required, and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the company as at March 31,2024, the Profit including other comprehensive income, changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

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

Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matters:

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

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

constructed a Hydrogen Fuel Cell Electric Vessel during the year amounting to Rs.1,399.74 lakhs out of the Total estimated cost including demonstration and operation & maintenance cost for two years of Rs.1,750.00 lakhs.

Research Committee of Ministry of Ports, Shipping and Waterways (MoPSW) has provided Rs.1,015.88 lakhs as grant out of sanctioned grant of Rs.1,312.50 lakhs.

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

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

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

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

3. Change in Accounting Policy on Measurement of Inventories:

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

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

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

Our opinion is not modified in respect of these matters.

Key Audit Matters:

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31,2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Information Other than the Standalone Financial Statements and Auditors Report Thereon:

The Companys Board of Directors is responsible for the other information. The other information comprises the information

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

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

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

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

Responsibility of Management for the Standalone Financial Statements:

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatements, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibility for the Audit of the Standalone Financial Statements:

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an 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.

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

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

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether company has adequate internal financial controls system in place and the operating effectiveness of such controls;

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

d. Conclude on the appropriateness of managements 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;

e. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work: and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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:

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

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

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

2. As required by the Companies (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 Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable our report thereon is enclosed as "Annexure B”.

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

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

b. In our opinion, proper books of account as required

by law have been kept by the company so far as it appears from our examination of those books and proper adequate returns have been received from all the regional offices of the company;

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

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

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

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

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

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

h. With respect to the other matters to be included in the 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 were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. a. The management has represented that,

to the best of its knowledge and belief, 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 our notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

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

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

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

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

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

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

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

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

For Anand and Ponnappan

Chartered Accountants FRN000111S

	Y. Banuteja
	Partner
Place: Kochi	Membership No :250129
Date: 24.05.2024
UDIN: 24250129BKKRRB1141

COCHIN SHIPYARD LIMITED

Annexure - A to the Auditors Report

Referred to in Paragrap Rs 1 under "Report on Other Legal and Regulatory Requirements” section of our report to the Members of the Company of even dated

Report on Directions issued by the Comptroller and Auditor General of India under section 143(5) of the Companies Act, 2013)

PART-I- DIRECTIONS

1. Whether the company has system in place to process all the accounting transactions through IT systemRs. If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated

Yes. The company has a system in place to process ail the accounting transactions through IT system. Based on our audit procedures on test check basis, wherever accounting transactions arises outside the IT system, no instances of lack of integrity of the accounts along with the financial implications has been noted.

2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loanRs. If yes, the financial impact may be stated.

Whether such cases are properly accounted forRs. (In case, lender is a government company, then this direction is also applicable for statutory auditor of Lender Company).

No. According to the information & explanations given to us, there is no restructuring of an existing loan or cases of waiver/ write off of debts/loans/interest etc. made by a lender. As such, there is no financial implication involved.

3. Whether funds (grants/subsidy etc.) received/receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditionsRs. List the cases of deviation.

Yes. Based on our examination of Books of Accounts of the company and as per the information & explanations given to us, the company has received a sum of H708.64 iakhs during the year, totaling to Rs.1,102.39 iakhs out of the sanction of Rs.1312.50 iakhs under the Research and Development Project namely "Hydrogen Fuel Ceii Ferry Vessel" from Ministry of Ports, Shipping and Waterways under Research and Deveiopment (R&D) Shipping Scheme.

Out of the funds received, the company has utiiized Rs.1,015.88 iakhs and has unutiiized iimits of H86.51 iakhs as on 31st March,2024, iying under Centrai Nodai Account maintained by Sagarmaia Deveiopment Corporation Limited (SDCL).

The funds were properiy accounted and utiiized as per the terms and conditions of the order and no deviations are observed by us.

PART-II- SUB-DIRECTIONS

Whether the company reviewed the changes in Accounting Policy for the method of measurement of Stores and Spares and Goods-in-transit. If yes, whether the necessary disclosure as per Ind AS 8 was made in the accounts.

Yes. During the year, the company reviewed the accounting poiicy with respect to the Inventories inciuding method of measurement of Stores & Spares and Goods in Transit. On considering the practices and principies foiiowed by the peers in the industry, the existing accounting poiicy with respect to measurement of Stores & Spares and Goods-in-Transit at weighted average cost and cost respectiveiy were treated to be appropriate. Refer Note No.14 to the Standaione Financiai Statements.

For Anand and Ponnappan

Chartered Accountants FRN000111S

	Y. Banuteja
	Partner
Piace: Kochi	Membership No :250129
Date: 24.05.2024
UDIN: 24250129BKKRRB1141

Annexure - B to the Auditors Report

Referred to in Paragrap Rs 2 under "Report on Other Legal and Regulatory Requirements” section of our report to the Members of the Company of even dated

Based on the audit procedures performed and information and explanations given to us, we report that: i. In respect of the Companys Property, Plant and Equipment,

a. The company has maintained proper records showing full particulars w.r.t

A. Property, Plant and Equipment including quantitative details and situation thereon and relevant details of right-of-use assets;

B. Intangible Assets;

b. The company has an existing practice of conducting physical verification of property, plant and equipments every year based on a program designed by the management.

During the year, the company has changed the existing practice of verification of all property, plant and equipments on yearly basis to once in every three years, which in our opinion are reasonable, having regard to the size and the magnitude of the company.

Accordingly, no physical verification of Property, Plant and Equipment was carried out by the management. Hence, we have not commented on the material discrepancies under this clause.

c. The company has clear tittle deeds of immovable properties held in its name, measuring 75.92 Hectares in aggregate; However, with regard to leasehold properties, where company is lessee which are tabulated below are pending registration/ execution of lease agreements:

Description of Property	Area (in Hectares)	Gross carrying Value Jin Lakhs)	Held in the name of	Whether promoter, director or their relative or employee	Period held since (year)	Reason for not being held in name of company
Leasehold lands- Right to Use Assets
ISRF Project Land-	Land- 8.12		Cochin Port	No	2012	Taken as a Part of "Right to Develop & Operate- ISRF". Pending Registration.
Phase-I			Authority
	Adjoin Water
	body- 15
ISRF Project Land-	Land-8.134	27,261.53	Cochin Port	No	2017	For Phase-II, lease agreement is to be executed.
Phase-II			Authority
Bed of backwaters-	Land/Water		Cochin Port	No	1977	Yet to executed
Reclaimed Land	Area-1.914		Authority			Lease Agreement.
CSL-Mumbai Ship Repair	HDD- 2.961	21,014.01	Mumbai Port	No	2018	In the Opinion of the company, the Concessionaire Arrangement/ Agreements does not require registration.
Unit (CMSRU)-Berth	Open Land		Authority
No.5,6,7 & 8 of Indira	Area-1.135
Docks*	Water Area- 1.8
CSL-Kolkata Ship Repair	Land & Dry	10.92	Syama Prasad	No	2019
Unit (CKSRU)-Berth No.6	Dock Area-		Mookerjee Port
at Netaji Subhas Dock*	2.532		Authority (Formerly Known as Kolkata Port Trust)

*Lease Rentals are factored in the Annual Fees as determined in Concessionaire Agreement

COCHIN SHIPYARD LIMITED

d. During the year, the company has not revalued its Property, Plant and Equipment (Inc. Right to Use assets) or Intangible Assets or both. Accordingly reporting under this clause does not arise.

e. The Company does not hold any benami property. Accordingly, reporting under this clause does not arise.

b. 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 have not been availed by the Company. The Company is not required to file any quarterly returns or statements with the banks.

iii. The Company has made an investment by way of right issue subscription in its wholly owned subsidiary companies, namely M/s Hooghly Cochin Shipyard Limited and M/s Udupi Cochin Shipyard Limited (formerly known as Tebma Shipyards Limited) amounting to H4,400.00 lakhs and Rs.1,800.00 lakhs respectively during the year. Further, the company has also given advance to its directors during the year on the same terms and conditions at which it is given to other employees of the company.

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	Guarantees	Security	Loans	Advance in nature oF loans
Aggregate amount granted/provided during the year
- Subsidiaries	-	-		-
- Joint Ventures	-	-		-
- Associates	-	-		-
- Others	-	-		0.60
Balance outstanding (gross) as at the balance sheet date in respect of the above cases
- Subsidiaries	-	-	500.00	-
- Joint Ventures	-	-		-
- Associates	-	-		-
- Others	-	-		0.14

ii. In respect of the Inventories:

a. The company has regular program in physical verification of inventories, which is carried out annually. During the year, the management has formed a technical committee for carrying out the physical verification.

Based on documents and reports made available to us and considering the size and nature of industry, the physical verification conducted by the management and policies adopted thereon are reasonable. However, we have not come across any significant deficiencies (ie., more than 10%) in this regard;

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

c. In respect of loans and advances in the nature of loans, the company has stipulated the schedule of repayment of principal and payment of interest and the repayments or receipts are regular;

d. In respect of loans and advances in the nature of loans granted by the Company, there is no overdue amount iv. 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 the any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment to Promoters, related parties as defined in clause (76) of section 2 of the Companies Act, 2013;

The company has complied with the provisions of section 185 and 186 of the Companies Act 2013 in respect of loans granted, investments made and guarantees and securities provided, as applicable.

v. The company has not accepted any deposits from the public, hence the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under, are 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, sales tax, and service tax, duty of customs, duty of excise, GST, cess and any other statutory dues applicable to it with the appropriate authorities;

There were no outstanding of aforesaid statutory dues as on March 31,2024 for a period of more than six months from the date they became payable.

b. There were no dues of GST, Income Tax, value added tax, duty of customs, duty of excise and cess which have not been deposited on account of any dispute except in the cases provided as Annexure-D;

viii. We have not come across any transactions that are not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Hence, the recording of unrecorded income in the books of accounts does not arise.

ix. a. The company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender (ie., banks, financial institutions, Government and other lenders).

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

c. The company has not availed any term loans during the year. Accordingly, reporting for this clause does not arise.

d. On overall examination of the financial statements of the company, during the year no funds has been raised the company on short term basis. Hence, the point of reporting on utilization and usage of funds for long term purposes by the company will not arise.

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. Accordingly, reporting with regard to borrowal of money in order to meet the obligations of associates or joint ventures does not arise.

f. The Company has not raised loans during the year on the pledge of securities held in its subsidiaries.

Further, the company does not have any associates or joint ventures. Accordingly, reporting with relating to raising loans on pledge of securities held in its associates or joint ventures does not arise.

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, reporting under this clause does not arise.

b. During the year, company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Therefore, reporting under this clause is not applicable to the company.

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 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 upto 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, all the related party transactions during the financial year are in compliance with Section 177 and 188 of Companies Act, 2013 and the details of the said transactions have been disclosed appropriately in the standalone financial statements in accordance with applicable Ind AS.

xiv. a. In our opinion and based on our examination, the company has an adequate internal audit system commensurate with the size and nature of its business.

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. In our opinion, the company has not entered into any noncash 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, 1935.

Accordingly, the reporting under the provisions of clause (xvi) (b) and (c) 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 realization 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, the Board of Directors of the Company has approved Rs.12.59 Crores (ie., Rs.1,259.01 lakhs) to be spent for the year, after setting off the Rs.110 lakhs excess spent during the previous financial year. Accordingly, the Corporate Social Responsibility Committee has identified and recommended the various projects amounting to Rs.1,499.00 lakhs for year and H457.60 lakhs for the FY 2024 to FY 2027, which were duly approved by the Board of Directors. However, during the year, the company has spent a sum of Rs.1,444.38 lakhs as against its obligation of Rs.1,369.01 lakhs. Accordingly, the company is eligible to carry forward the excess spent of Rs.185.37 lakhs. However, the company has carry-forwarded RS 170.00 lakhs, which is treated as asset in the standalone financial statements.

Further, in our opinion:

a. There are no unspent amount in respect of other than ongoing projects, to a Fund specified in Schedule VII to the Companies Act, 2013 till the date of our report. However, the time period for such transfer i.e. six months of the expiry of the financial year as permitted under the second proviso to sub-section (5) of section 135 of the Act, has not elapsed till the date of our report.

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 Anand and Ponnappan

Chartered Accountants FRN000111S

	Y. Banuteja
	Partner
Place: Kochi	Membership No :250129
Date: 24.05.2024
UDIN: 24250129BKKRRB1141

Annexure - C to the Auditors Report

Referred to in Paragraph 3(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”)

We have audited the internal Financials Controls over Financial Reporting of Cochin Shipyard Limited (referred to as the "Company") for the year ended March 31,2024, in conjunction with our audit of the Standalone Financial Statements of the company.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal Financial Controls over Financial Reporting issued by the institute of Chartered Accountants of india. 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 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.

Auditors Responsibility

Our responsibility is to express an opinion on the companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the 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 us for our audit opinion on the companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting 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 control over financial reporting 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 over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over

financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the company has in all material respects, maintains adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2024, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Anand and Ponnappan

Chartered Accountants FRN000111S

	Y. Banuteja
	Partner
Place: Kochi	Membership No :250129
Date: 24.05.2024
UDIN: 24250129BKKRRB1141

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 Dues		Amount (In Lakhs)		Period to which	Forum where
Statute			Disputed	Deposited	the amount relates	dispute is pending
Employees State	Contribution		35.82	-	April 2008 to May 2010	Honble Insurance Court, Alappuzha
Insurance Act, 1948	Claim for Damages & Interest for belated remittance		19.84	1.00	June 2010 to July 2013
	Amount received from Indian Navy for	Service Tax	1,647.47
	Design and Development of IAC	Interest	5,766.94	123.56	2004-05
		Penalty	1,647.57
	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	920.71	24.23	2009-10
		Penalty	323.14			CESTAT, Bangalore
	1. RCM on towing the barge along with security services;	Service Tax	279.46
Finance	2. Salavge operations;	Interest	472.35	20.96	2012-13 to
Act,1994 (Service Tax)	3. RCM on guaranteed Repairs obligations for the period 2012-13 to 2016-17	Penalty	279.56		2016-17
	1. Differential Turnover for Ship Repair activities (incl. adoption of lesser assessable value);
		Service Tax	150.57	11.29	2015-16
	2. Disallowance of CENVAT credit availed and utilized;	Interest	183.34			Commissioner (Appeals)
		Penalty	15.06
	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
		Interest	50.62	3.87	2017-18 (upto June 2017)
		Penalty	5.10
Kerala Value	Additions in Taxable Turnover	Tax Interest	787.32 582.62	-	AY 2015-16	Deputy Commissioner of State Tax, Ernakulam
Added Tax Act,2003
		Duty	269.30	323.67
The Customs Act,1962	Classification of Drawings & Plan for Indigenous Aircraft Carrier				Marc Rs 2016 to Dec 2016
		Duty	103.97	104.79	April 2017
		Duty	306.97	309.37	April 2017
		Duty	789.71	795.88	April 2017
		Duty	762.48	768.43	April 2017
		Duty	1,790.93	293.46	April 2017	CESTAT, Bangalore
		Duty	230.54	526.81	Nov 2017
		Tax	296.26
		Duty	89.59	198.07	June 2018
		Tax	108.48
		Duty	262.86	581.88	Dec 2018
		Tax	318.30
		Duty	191.22	187.43	June 2018
		Tax	231.55
	Wrong claim of basic Customs Duty	Duty	629.34
	Exemption Vide Notification No. 50/2017 and Incorrect t claim of 5% IGST Input Tax Credit	Penalty	230.00	607.23	August 2017 to October 2017

 

	Nature of Dues		Amount (In Lakhs)		Period to which the amount relates	Forum where dispute is pending
Statute			Disputed	Deposited
Central Goods and Service Tax Act,2017 #	Ineligible Input Tax Credit availed and utilised	Tax	83.75			Commissioner
		Penalty	8.38	-	April 2018 to Marc Rs 2019	(Appeals), Central Tax & Central Excise, Cochin
Income Tax Act,1961	Disallowance of Expenditures/ Provisions/Deductions		126.26	126.26	AY 2010-11	Commissioner of Income Tax (Appeals)
			911.07	928.89	AY 2014-15
			331.77	331.77	AY 2017-18
			20.76	22.01	AY 2018-19
						Income Tax
			819.51	598.94	AY 2020-21	Appellate Tribunal (ITAT), Cochin
Department Appeals
Finance	Erroneous remittance of service tax
Act,1994 (Service Tax)	on the amount of Management fee/ handling charges received/accounted from Indian Navy	Service Tax	376.67	-	2004-05 to 2008-09
	1. Differential Turnover for Ship Repair activities (incl. adoption of lesser assessable value); 2. Disallowance of CENVAT credit availed and utilized;	Service Tax	2,339.64	-	2012-13 to 2014-15	CESTAT, Bangalore
	Management, Maintenance or Repairs vessels owned by UTLA & Manned by LDCL	Service Tax	1,885.49	-	July 2012 to Marc Rs 2015

^interest on Service Tax cases, where company has gone for appeal worked out approximately. #In the process of filling Appeal.

$Rectification petition filed by the Company.

For Anand and Ponnappan

Chartered Accountants FRN000111S

Place: Kochi	Y. Banuteja
Date: 24.05.2024	Partner
UDIN: 24250129BKKRRB1141	Membership No :250129