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
Auditor's Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are
independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the ethical requirements that are
relevant to our audit of the Standalone Financial Statements
under the provisions of the 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.

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 H1,12,411.88
lakhs (Previous year: H1,10,936.04 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.

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.

Other Information

7. The Company's Management and Board of Directors
are responsible for the other information. The other
information comprises the information included in the
Company's Annual Report, including the Directors' Report
and Management Discussion and Analysis Report, but does
not include the Standalone Financial Statements and our
Auditor's Report thereon. The Company's Annual Report is
expected to be made available to us after the date of this
Auditor's Report. Our opinion on the Standalone Financial
Statements does not cover the other information and we
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.

Management's and Board of Directors'
Responsibilities for the Standalone Financial
Statements

10. The Company's 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 Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.

13. The Board of Directors are also responsible for overseeing
the Company's financial reporting process.

Auditor's Responsibility for the Audit of the
Standalone Financial Statements

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 Auditor's Report that includes
our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the
basis of these Standalone Financial Statements.

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 Company's ability to continue
as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our Auditor's Report to the related disclosures
in the Standalone Financial Statements or, if such
disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our Auditor's Report.
However, future events or conditions may cause the
Company to cease to continue as a going concern.

• 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 Auditor's
Report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.

Other Matters

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 (Auditor's Report) Order,
2020 ("the Order") as amended, issued by the Central
Government of India in terms of Sub-section (11) of Section
143 of the 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
Company's 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 Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in

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

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

ii. The Company has made provision, as required
under applicable law or accounting standards,
for material foreseeable losses, if any, on long¬
term 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 it's knowledge and
belief, other than as disclosed in the
notes to the accounts, no funds have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind

of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, directly or indirectly lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;

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

c. Based on such audit procedures as
considered reasonable and appropriate in
these circumstances, nothing has come to
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

Alexander Nallanickal Koshy

Partner, Membership No. 007448

UDIN: 26007448ZHJUZE3490