3.9 Provisions , Contingent Liabilities and Contingent assets
a) Provisions
A provision is recognized if, as a result of a past event,
the Company has a present legal obligation that can be
estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation.
Provisions (excluding retirement benefits and
compensated leave) are not discounted to its present value
and are determined by the best estimate of the outflow of
economic benefits required to settle the obligation at the
reporting date. These are reviewed at each reporting date
adjusted to reflect the current best estimates.
Warranty obligations included in this type of provisions are
not treated as a separate performance obligation, unless
the customer has the option of contracting the warranty
separately, therefore they are recognized in accordance
with Ind AS 37. These provisions are classified as current
liabilities since they relate to the operating construction
projects cycle, in line with Ind AS 1.
Provision towards guarantee claims in respect of ships
delivered wherever provided/ maintained is based on
technical estimation. For the ships delivered, guarantee
claims are covered by way of insurance policies covering the
guarantee period on case-to-case basis, wherever required.
Provisions for anticipated losses are recognized when it
becomes apparent that the total costs expected to fulfil
a contract exceed expected contract revenues. For the
purpose of determining, where appropriate, the amount
of the provision, budgeted contract revenue will include
the forecast revenue that is considered probable, in line
with Ind AS 37 as well as incremental costs. General costs
are not directly attributable to a contract and are therefore
excluded from the budgeted cost unless they are explicitly
passed on to the counterparty in accordance with the
contract, in line with paragraph 68 of Ind AS 37.
b) Contingent Liabilities and Contingent Assets
In the normal course of business, contingent liabilities
may arise from litigations and other claims against the
Company. Where the potential liabilities have a low
probability of crystallizing or are very difficult to quantify
reliably, the Company treats them as contingent liabilities.
Such liabilities are disclosed in the notes but are not
provided for in the Financial Statements. Although there
can be no assurance regarding the final outcome of
the legal proceedings, Company does not expect them
to have a materially adverse impact on the financial
position or profitability. The Company does not recognize
a contingent liability but discloses its existence in the
Financial Statements.
A contingent asset is a possible asset that arises from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity.
The Company does not recognize a contingent asset but
discloses its existence in the Financial Statements where
an inflow of economic benefits is probable.
3.10. Asset Held for Sale
Non-current assets or disposal groups are classified as held
for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing
use. Such assets are available for immediate sale in their
present condition and their sale is highly probable. Non¬
current assets and disposal groups classified as held for
sale are measured at the lower of their carrying value and
fair value less costs to sell.
3.11 Revenue Recognition
a) Revenue from Operations
Revenue from contracts with customers are measured
based on the consideration specified in a contract with a
customer (ie., transaction price, which is the fair value of
consideration received or receivable).
At the first instance, revenue recognition process involves
identifying the relevant contracts and technical evaluation
of the performance obligations, contained therein.
A single performance obligation is identified in shipbuilding
and ship repair segments for each vessel, due to the high
degree of integration and customization of the various
goods and services forming a combined output that is
transferred to the customer over time.
The Company choses the appropriate method of measuring
the progress of the completion at the contract inception
for recognizing revenue over time, and are applied
consistently to similar performance obligations under the
respective segments and/or activities carried out thereon.
Recognition of revenue for a performance obligation
satisfied over time is made only if the Company can
reasonably measure its progress towards complete
satisfaction of the performance obligation.
The performance obligations for the Shipbuilding and
Ship repair activities carried out by the Company are
satisfied over time rather than at a point in time since
the Company's performance does not create an asset
with an alternative use to the Company i.e. contractual
restrictions and practical limitations to readily direct that
asset for another use (even in some cases it will be able to
do so, it can only be done after significant changes and at
significant cost) and it has an enforceable right to payment
for performance completed to date.
Revenue is recognized when the Company satisfies
performance obligations by transferring promised goods
and services to the customer over a period of time using
output method based on measurement of physical
performance completed to date in respect of contracts
with customers for Ship building and Ship repair other
than Indigenous Aircraft Carrier (IAC).
In respect of contract with Indian Navy for construction
of Indigenous Aircraft Carrier, which is partly 'fixed price
basis' and partly 'cost plus basis', the revenue
i) from fixed price portion is recognized using
output method .
ii) by way of mark up from cost plus part of the contract
for procuring and supply of materials and design
outsourcing is recognized when performance
obligations as per the terms of the contract are
fulfilled upon making payments to the suppliers.
iii) The cost of materials, value of design outsourcing
and other expenses incurred for the vessel which are
recoverable separately from Navy are charged off
to the Statement of Profit and Loss when materials
are consumed/activities are performed/expenses are
incurred and are simultaneously grossed up with the
value of work done and recognized as revenue.
In the case of ship repair contracts involving continuous
multiple years maintenance support/ recurring and
routine services, the Company opted for time-elapsed
output method, i.e, measuring the progress based on
time elapsed to reporting date, which is representative
of the satisfaction of performance obligation subject
to entitlement of consideration in exchange of goods
and/or services.
Based on the technical assessment considering the latest
available information to the Company, measuring the
progress towards complete satisfaction of a performance
obligation in the method adopted will be revised/updated
on an ongoing basis.
During the initial stages of a contract, where the Company
may not be able to reasonably measure the outcome of
a performance obligation and the Company expects to
recover the costs incurred in satisfying the performance
obligation, revenue will be recognized only to the extent
of the costs incurred until such time that it can reasonably
measure the outcome of the performance obligation.
Contract modifications are accounted when additions,
deletions or changes are approved either to the contract
scope or contract price. The accounting for modifications
of contracts involves assessing whether the services added
to an existing contract are distinct and whether the pricing
is at the stand alone selling price. Where the goods or
services added are not distinct, adjustment to revenue is
made on a cumulative catch up basis. Where the goods or
services added are distinct, and such additional goods or
services are priced at standalone selling prices, the contract
modification is accounted for as a separate contract;
whereas if the modification is not priced at standalone
selling price, the same is accounted as a termination of the
existing contract and creation of a new contract.
The Company generally does not recognize any revenue
from additional work until it has been approved by the
customer. When the scope of work has been approved but
the impact on revenue is yet to be valued, the "variable
consideration" requirement (as explained below) will
apply. This entails recognizing revenue in an amount that
is unlikely to be reversed.
If the consideration promised in a contract includes variable
amounts like discounts, rebates, refunds, credits, price
concessions, liquidated damages or other similar items,
the Company estimates the net amount of consideration
to which the Company is entitled in exchange for
transferring the promised goods or services to a customer
and accounts for the same. The payment terms are based
on milestones specified in the respective contracts with
customers. On achieving the specified milestones these
payments are released.
Revenue from Supply of Base & Depot Spares is recognized
based on the satisfaction of performance obligation at a
point in time on proof of receipt of goods from customer.
Unlike revenue recognition, amounts billed to the
customer are based on the various milestones reached
under the contract and on acknowledgement thereof by
the customer by means of a contractual document referred
to as a progress billing certificate. Therefore, the amounts
recognized as revenue for a given year do not necessarily
match those billed to or certified by the customer. For
contracts in which the revenue recognized exceeds the
amount billed or certified, the difference is recognized in
as "Contract Asset" under "Other Current Assets", while for
contracts in which the revenue recognized is lower than
the amount billed or certified, the difference is recognized
as "Contract Liability" under "Other Current Liabilities".
Other Operating Revenue with respect to sale of stock
items, scrap and consultancy income is recognized at a
point in time when the Company satisfies performance
obligations and right to receive the income is established
as per terms of the contract by transferring promised
goods and services to the customer.
Management fee is also recognized over a period of time.
b) Government Grants
Government Grants are recognized when there is
reasonable assurance that the Company will comply with
the conditions attaching to them and that the grants
will be received.
Government Grants are recognized in Statement of Profit
and Loss on a systematic basis over the periods in which
the Company recognizes as expenses, the related costs for
which the grants are intended to compensate. Where the
Grant relates to an asset value, it is recognized as deferred
income, and amortized over the expected useful life of
the asset. Other grants are recognized in the statement
of Profit & Loss concurrent to the expenses to which such
grants relate/ are intended to cover.
Ship Building Financial Assistance (SBFA) is recognized
over a period of time in proportion to the expenses / cost
incurred and classified under "Revenue from Operations".
Government Grants that are receivable as compensation
for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Company with
no future related costs are recognized in statement of
profit & loss in the period in which they become receivable.
c) Other income
i) Liquidated damages and interest on advances
No income is recognized on (a) interest on advances
given and (b) liquidated damages, where the levies
depend on decisions regarding force majeure
condition of contract. These are accounted for
on completion of contracts and / or when final
decisions are taken.
In the case of contracts entered into for execution of
capital works having long gestation period, where the
extant commercial terms of the contract provides for
provision of extending interest bearing mobilisation
advance to the service provider for mobilising various
resources for timely execution, mobilisation advances
are paid and interest is accounted on accrual basis.
ii) Accounting for insurance claims
(i) Warranty/Builder Risk claims
In the case of guarantee defects covered under
warranty insurance policies or claims under
Insurance Policies taken for ship building and
ship repair works, the insurance claims lodged
are recognized in the Financial Statements in
the year in which the survey is completed and
the probable amount of settlement is intimated
by the insurance Company.
(ii) Other Insurance Policies
In the case of other Insurance Policies like Asset
Insurance, Transit Insurance, Marine Insurance,
Cash Insurance etc., the claims are recognized in
the Financial Statements on settlement of the
claims by way of receipt of the amount from the
Insurance Company.
In the case of Medical insurance, claims are
recognized on due basis, based on the claims
submitted with the Insurance Company.
Other items of income are accounted as and
when the right to receive such income arises
and it is probable that the economic benefits
will flow to the Company and the amount of
income can be measured reliably.
3.12 Employee benefits
Employee benefits consist of salaries and wages,
contribution to provident fund, superannuation fund,
gratuity fund, National Pension Scheme towards
medical assistance, which are short term in nature and
contribution towards compensated absences, which is
long term in nature.
Post-employment benefit plans
i) Defined Contribution plans
Defined contribution to Employees Pension scheme
for eligible employees is made to National Pension
Scheme (NPS) and are charged as expense as they
fall due. Such benefits are classified as Defined
Contribution Schemes as the Company does not
carry any further obligations, apart from the
contributions made.
The Company makes contributions to the Cochin
Shipyard Employees Mutual Public Welfare Trust
and Employees Medical Assistance Trusts, which
are charged as expense, as and when they fall due.
Such benefits are classified as Defined Contribution
Schemes as the Company does not carry any further
obligations, apart from the contributions made.
ii) Defined benefit plans
Gratuity
The Company provides for gratuity, a defined benefit
retirement plan covering eligible employees. The
fund is managed by the trustees of the Cochin
Shipyard Ltd Group Gratuity Trust .The liability or
asset recognized in the balance sheet in respect
of its defined benefit plan is the present value of
the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The
defined benefit obligation is calculated periodically
by actuaries using the projected unit credit method.
The present value of the said obligation is determined
by discounting the estimated future cash outflows,
using market yields of government bonds that have
terms approximating the terms of the related liability.
The interest income / (expense) are calculated
by applying the discount rate to the net defined
benefit liability or asset. The net interest income /
(expense) on the net defined benefit liability or asset
is recognised in the Statement of Profit and Loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They
are included in retained earnings in the Statement of
Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined
benefit obligation resulting from plan amendments
or curtailments are recognised immediately in
Statement of Profit and Loss as past service cost.
Provident Fund and Pension Scheme
The Company also makes contribution towards
provident fund. The provident fund is administered
by the Trustees of the Cochin Shipyard Limited
Employees Contributory Provident Fund Trust. The
rules of the Company's provident fund administered
by the Trust, require that if the Board of Trustees
are unable to pay interest at the rate declared by
the Government under para 60 of the Employees'
Provident Fund Scheme, 1952, then the deficiency
shall be made good by the Company. The deficiency,
if any assessed by the Company based on actuarial
valuation will be provided for in the accounts.
Other employee benefits
Compensated absences
The Company has a policy on compensated absence
which are both accumulating and non-accumulating
in nature. The expected cost of accumulating
compensated absence is determined by Actuarial
valuation performed by an independent actuary at
each Balance Sheet date using projected unit credit
method on the additional amount expected to be
paid/availed as a result of unused entitlement that
has accumulated at the Balance Sheet date. Expense
on non-accumulating compensated absence is
recognised in the period in which the absences occur.
3.13 Taxes on Income
a) Income tax
Income tax expense comprises current tax expense
and the net change in the deferred tax asset or liability
during the year.
Current and deferred taxes are recognized in Statement of
Profit and Loss, except when they relate to items that are
recognized in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also
recognized in other comprehensive income or directly in
equity, respectively.
The Company has determined that interest and
penalties related to income taxes, including uncertain
tax treatments, do not meet the definition of income
taxes, and therefore accounted for them under Ind AS 37
Provisions, Contingent Liabilities and Contingent Assets.
b) Current tax
Current tax is measured at the amount of tax expected
to be payable or receivable on the taxable income or
loss for the year and any adjustment to the tax payable
or receivable in respect of previous years as determined
in accordance with the provisions of the Income Tax Act,
1961. The amount of current tax payable or receivable is
the best estimate of the tax amount expected to be paid
or received that reflects uncertainty related to income
taxes, if any. It is measured using the tax rates enacted or
substantively enacted at the reporting date.
Current tax assets and current tax liabilities are offset,
when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the
asset and the liability on a net basis.
c) Deferred tax
Deferred tax is recognized using the Balance Sheet
approach. Deferred tax assets and liabilities are recognised
for deductible and taxable temporary differences arising
between the tax base of assets and liabilities and their
carrying amount, except when the deferred tax arises
from the initial recognition of an asset or liability in a
transaction that is not a business combination and affects
neither accounting nor taxable profit or loss at the time of
the transaction.
Deferred tax assets are recognised only to the extent that
it is probable that either future taxable profits or reversal
of deferred tax liabilities will be available, against which the
deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses can be utilised.
The carrying amount of a deferred tax asset shall be reviewed
at the end of each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred income tax
asset to be utilised. Unrecognized deferred tax assets are
re-assessed at each reporting date and are recognized to
the extent that it has become probable that future taxable
profits will allow the deferred tax assets to be recovered.
Deferred tax relating to items recognized outside profit
or loss is recognized outside profit or loss (either in other
comprehensive income or in equity).
Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period
and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax assets and liabilities are off set when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority.
3.14 Operating Segments
Operating segments are defined as components of an
enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating
decision maker, in deciding how to allocate resources and
assessing performance. The Company's chief operating
decision maker is the Chairman & Managing Director.
The Company has identified business segments (industry
practice) as reportable segments. The business segments
comprise: 1) Ship Building and 2) Ship Repair
Segment revenue, segment expenses, segment assets and
segment liabilities have been identified to segments on the
basis of their relationship to the operating activities of the
segment. Revenue, expenses, assets and liabilities which
relate to the Company as a whole and are not allocable to
segments on a reasonable basis have been included under
"unallocated revenue / expenses / assets / liabilities".
3.15 Recent Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.
On May 9, 2025, MCA notified the amendments to Ind AS
21 - Effects of Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance on assessing
currency exchangeability and estimating exchange
rates when currencies are not readily exchangeable. The
amendments are effective for annual periods beginning
on or after April 1, 2025. The Company has assessed that
there is no significant impact on its Financial Statements.
Ind AS 12, International Tax Reform - Pillar Two Model
Rules applicable immediately - The amendments provide a
temporary mandatory relief from deferred tax accounting
for top-up tax and disclose that they have applied the
relief. This amendment has no applicability or impact on
the Company's Financial Statements.
Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment relates
to classification of liabilities as current or noncurrent
and non-current liabilities with covenants. The Company
has applied the amendments to Ind AS 1 relating to
Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants effective from 1
April 2025. The Company is also evaluating the impact of
the specific provisions relating to covenant breaches that
become effective from 1 April 2026.
a) Freehold Land includes the value of (a) land allotted on lease basis to (i) Bharatiya Vidya Bhavan (0.69045 hectare) (ii) M/s Indian
Oil Corporation Ltd (0.620 hectare) for laying pipeline (iii) land leased to M/s Kochin Air Products (0.30 hectare) and (b) land
leased to Kerala State Electricity Board (0.47 hectare).
b) Value of land includes value of buildings acquired along with the land for which depreciation has not been provided as the
value is not separately available and most of these buildings are likely to be demolished for putting up facilities for the factory.
c) Freehold land includes landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30 ares in Sy
No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2,
8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk,
Ernakulam Dist, Kerala provided as security for issue of Tax free bonds.
d) The Company has bearer plants in its premises and other sites which generates nominal income .Cost of such bearer plants
cannot be reliably measured and hence these plants were not capitalized.
e) Title deeds of all immovable properties (ie freehold land) are held in the name of the Company.
f) In the case of following properties where the Company is the lessee, lease agreements are duly executed in favour of the lessee
with the following exceptions:
1. The Company has taken 8.12 HA of land (re-measured as 8.1164HA) and 15 HA of water body on lease from Cochin Port
Authority ( CoPA) on 12 April 2013 (1st phase) .CSL has also taken 8.134 HA of additional land area on lease from CoPA on
16 Nov 2017 (2nd phase).Two lease agreements (ie 1st phase allotment of land/waterbody and 2nd phase allotment of land)
were entered between CSL & CoPA and both lease deeds have not been registered.
2. The Company has executed concessionaire agreements with the Mumbai Port Authority(MBPA) and Syama Prasad
Mukherjee Port Authority (SMPA) to Upgrade,Operate and Manage Ship Repair facility at Hughes Dry Dock and specified
berths at Indira Dock of MBPA and two dry docks and Berth No.6 of Netaji Subash Dock of SMPA respectively.
The project site at MBPA is taken on license for 29 years. The license agreement is yet to be registered, as a request
submitted for waiver of the stamp duty to the Government of Maharashtra is under consideration.
The project site at Syama Prasad Mukherjee Port Authority is taken on license for 30 years.As license agreement does not
attract stamp duty and registration charges in West Bengal ,Concession Agreement with SMPA has not been registered.
g) The Right to use of land and ship repair facility represents the upfront fee paid to Cochin Port Trust towards setting up of
International Ship Repair Facility (ISRF) project, to be depreciated over the period of lease which was further extended based
on the date of obtaining of Environmental Clearance. As all environmental clearances for ISRF are obtained as on January 09,
2018, the lease period of 30 years effectively starts from this date.
During the Financial year 2025-26, the Company executed an addendum to the contract agreement with Cochin Port Trust,
extending the lease period for further 30 years ie. Till 08.01.2078. Consequently, Right of use of land and ship repair facility has
been remeasured and depreciated over a revised period of 60 years. The lease liability also has been remeasured to reflect the
revised payments over the extended 60-year period.
h) In the case of following properties where the Company is the lessee, lease agreements are yet to be executed:
(1) Staff quarters at Kolkata held in the name of Syama Prasad Mookerjee Port Authority has been allotted to CSL. Lease
agreement is yet to be executed.
(2) Bed of Backwaters- Reclaimed Land (Land/water area) of 1.914' ha has been allotted to CSL by CoPA.
(3) Parking Space to Subcontractors (3.80 Ares) is taken on [ease from Mr.K.Pradeep Kumar of which the prevailing lease
contract period has been expired on 14.12.2025. Revised [ease agreement is yet to be executed.
(4) Additional Berth No. 9 at Indira Dock is alloted to CSL by MBPA (Land Area : 1501.20 Sq. Mtrs. And Water Front Area :
3753 Sq. Mtrs.) for which lease agreement is yet to be executed. The tenure of this lease is coterminus with the existing
concession period expiring on 17.01.2048.
j) As at March 31, 2026, there were no plant and equipment (previous year carrying value H403.40 Lakhs) which were
temporarily idle.
k) The Gross carrying value of assets of H19375.00 Lakhs (previous year H17918.81 Lakhs) have been fully depreciated, but
still are in use.
l) There were no additions on Property, Plant & Equipments on account of Research & development (previous year H2.83 Lakhs
relating to welding technology).
m) Current year deductions include scrapping / retirement of assets valued at H 146.17 Lakhs (Previous year H17.47 Lakhs) which
has a Deemed Cost H 1338.05 Lakhs (Previous year H186.07 Lakhs). This includes old assets having WDV of H107.42 Lakhs retired
by the Company on the basis of recommendations of the Committee constituted by the Management to examine and verify
the untraceable assets as part of the implementation of the RFID-based asset tagging system.
n) During the financial year, the Company has further capitalised an amount of H 18,060.36 Lakhs (Previous Year: H 79,344.26
Lakhs) and H 4,462.18 Lakhs (Previous Year: H 1,31,938.92 Lakhs) for the projects 'International Ship Repair Facility' and 'New Dry
Dock' respectively.
Depreciation on these assets has been calculated considering the useful lives as determined by the management based
on technical estimates made and on double shift basis. The useful lives adopted as per technical estimates are detailed in
the table below;
The Company had recognized the net cost incurred on this project (after reducing the grant) as Research & Development (R&D)
expenditure in the Statement of Profit and Loss for the year ended March 31, 2025. At that stage, the ownership position was not
yet clarified. The MoPSW has now formally clarified that the ownership of this R&D asset rests with the Company.
The ASV is still under construction and has been reclassified as "Capital Work In Progress" until completion.
The Company will continue to monitor developments and review the valuation and classification of these assets in subsequent
periods as necessary.
a) Considering the indicators of the value of an investment such as investee's assets, results etc. a decline, other than temporary,
in the value of investment in Cochin Waste 2 Energy (P) Ltd is noticed and accordingly fair value is considered as Nil. Similarly,
increase in value of investment in Kerala Enviro Infrastructure Limited is noticed and accordingly investment is fair valued.
b) The Company's Investment in Cochin Shipyard Employees Consumer Co-operative Society Limited are non-participative
shares and normally does not carry any voting rights. Hence, the Company has carried this investment at its transaction value
considering to be its fair value.
c) The Company had invested in the equity share capital of Hooghiy Cochin Shipyard Limited (Hooghiy-CSL), a sum of H 13,935.34
Lakhs, comprising of 14,00,00,000 shares of H 10 each, during the period from 2017 to 2024. Out of the above 11,80,00,000
shares of H 10 each were acquired through rights share.
d) The Company had acquired Tebma Shipyards Limited, now renamed as Udupi Cochin Shipyard Limited (Udupi-CSL), by an Order
of NCLT, Chennai by investing H 6500.00 Lakhs comprising of 6,50,00,000 shares of H10 each.The Company had made further
investment of H2500.00 Lakhs comprising of 2,50,00,000 shares of H 10 each during FY 2022-23 and H 1800.00 Lakhs comprising
of 1,80,00,000 shares of H 10 each during FY 2023-24 both on a rights basis in UCSL.
e) The equity shares issued on rights basis shall rank pari passu with the existing equity shares of the Company in all respects.The
above investment are accounted at cost in accordance with IND AS 27-Separate Financial Statement.
f) In February 2026, the Company invested in 11,148 Secured, Unrated, Unlisted, Redeemable, Non-Convertible Debentures (NCD)
of Dredging Corporation of India Limited (DCIL) having a face value of H 1,00,000 each, aggregating to H 11,148.00 Lakhs. Mode
of placement of the NCDs were private placement. The NCDs carry a coupon rate of 7.72% per annum and are redeemable at
par at the end of 10 years from the date of allotment, with an option available to DCIL to redeem the NCDs earlier at the end of
5 years. Subscription to NCD was part of the agreement to enable DCI to fund the 12,000 Cu.M Trailer Suction Hopper Dredger
(TSHD) "DR-Godavari", under the Shipbuilding Contract entered into between DCIL and CSL.
The Debentures are secured by pari-passu hypothecation and charge over all contractual rights and benefits arising out of the
said contract during the pre-delivery period. Upon completion of construction and delivery of the Dredger, the security shall be
on the dredger so delivered.
The Company has given advances amounting to H181461.59 Lakhs towards procurement of materials, equipments, machineries,
services etc to the vendors/service providers which are fully covered by bank guarantees of an equal amount issued by the commercial
banks and the guarantees are enforceable.
**The Company assesses the movement of inventory at each Balance Sheet date.Since inventories are contract /project specific & each contract/project with
different customers is distinct and having different characteristics, items are not ordinarily inter-changeable and unique in nature, therefore arriving at their net
realizable value is not practical.As a practical expedient, the Company uses a graded provision matrix based on aging to determine the provision for slow-moving
and obsolete inventory, which is then recognized in the Statement of Profit and Loss.
***The Corporate Social responsibility (CSR) expenditure is charged to the Statement of Profit & Loss in the period in which it is incurred, except to the extent the Company
decides to carry forward any amount in excess of the minimum required CSR expenditure for adjustment in future years in terms of Sec 135(5) of the Companies Act 2013
read with Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and such excess amount is classified under Miscellaneous Current Assets.
The Company has been engaged in a pilot Research and Development project under the R&D initiative of the Ministry of Ports,
Shipping and Waterways (MoPSW) - Hydrogen Fuel Cell Technology for Marine Application- approved for partial funding of H1312.50
Lakhs (Project fully executed and vessel completed).
The Company had recognized the net cost incurred on this project (after reducing the grant) as Research & Development (R&D)
expenditure in the Statement of Profit and Loss for the year ended March 31,ch 2025. At that stage, the project was under
development and the ownership position was not yet clarified. The MoPSW has now formally clarified that the ownership of this
R&D asset rests with the Company.
The Hydrogen Fuel Cell Vessel is being actively marketed for sale with IWAI (which also falls under the administrative purview of
MoPSW), and the Company has transferred possession of the vessel to them. The consideration and the contract are currently being
discussed with IWAI under the guidance of the MoPSW. Pending the finalization of these discussions, the asset has been classified
as ""Asset Held for Sale."" The Company will continue to monitor developments and review the valuation and classification of these
assets in subsequent periods as necessary.
by the Company. Interim dividend is paid as and when declared by the Board. Final dividend proposed by the Board of Directors
is subject to approval/regularisation by the share holders in the Annual General meeting. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion
to their shareholding.
Sub-division & Other information:
On 10 Jan 2024, the Company sub-divided every 1 (one) Equity Share of the nominal/face value of H10/- each into 2 (Two) Equity
Share of the nominal/face value of H5/- each.
In October 2024, the Government of India sold 1,30,15,689 (4.95%) equity shares out of its 19,16,86,928 (72.86%) equity shares
held in Cochin Shipyard Limited (CSL) by way of Offer for Sale (OFS) through the Stock Exchange mechanism in accordance with
the applicable SEBI guidelines. Consequently, the Government of India's shareholding in Company stands at 17,86,71,239 (67.91%)
equity shares as on March 31, 2026.
Movement of each item in Other Equity is detailed in Statement of Changes in Equity
Capital Reserve: Capital reserve includes H263.56 Lakhs being restoration charges received from Ms Indian Oil Corporation Ltd for
laying pipe line through the Company's land.
Capital Redemption Reserve: Capital Redemption Reserve of H 12353.76 Lakhs includes H 11914.20 Lakhs being reserves created
on redemption of preference shares and H 439.56 Lakhs being a sum equal to the nominal value of the shares bought back, which
will be utilised for the purpose defined under the Companies Act 2013.
Securities Premium: Premium on tax free bonds is amortised on straight line basis over the period of bonds. The Company had
completed the Initial Public Offer (IPO) during 2017-18 and had allotted 22656000 equity shares of H10 each at premium ( H93929.76
Lakhs). Expenses incurred net of deferred tax adjustment towards such allotment of shares amounting H777.93 Lakhs has been
debited in Securities Premium in accordance with the requirements of Indian Accounting Standard (Ind AS) 32- Financial Instruments.
General Reserve: General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act,
2013. This is a free reserve and can be utilised for any general purpose like issue of bonus shares, payment of dividend, buy back of
shares etc. The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in
certain percentage of profits were required to be transferred to General reserve before declaring dividends. As per the Companies
Act 2013, the requirements to transfer profits to General reserve is not mandatory.
Cash flow Hedge Reserve: Cash flow hedge reserve represents the effective portion of change in the fair value of designated
hedging instruments recognised in the Other Comprehensive Income. (Refer Note No. 47).
Interim dividend :During the year, the Company paid interim dividends of H4.00 per equity share of face value of H5 and H3.5 per equity
share of face value of H5, as recommended at the board meetings held on November 12, 2025 and January 28, 2026 respectively.
Proposed dividend : The Board of Directors of the Company have recommended a final dividend of H1.50 per equity share of face
value of H5 for the financial year ended March 31, 2026 at the Board meeting held on May 15, 2026. This is subject to approval/
regularisation by the share holders in the Annual General meeting.
Tax Free Infrastructure Bond Series 2013-14
Tranche 2: 230 bonds of face value of H10 Lakhs totalling H 2300 Lakhs with interest rate of 8.72% payable annually, redeemable at
par, due for redemption on 28th March 2029.
These bonds are secured against the landed properties of the Company admeasuring 197.12 ares (487.00 cents) made up of 34.30
ares in Sy No. 713/11, 23.57 ares in Sy No. 713/12, 59.12 ares in Sy No. 713/13, 50.18 ares in Sy No. 714/06, 10.12 ares in Sy No. 714/2,
8.90 ares in Sy No. 714/4 and 10.93 ares in Sy No. 714/5 of land all are lying contiguously in Elamkulam village, Kanayannur taluk,
Ernakulam Dist, Kerala.
Utilisation : Out of the issue proceeds of H2300 Lakhs received, the Company has fully utilised/adjusted funds towards various
expenditure incurred on International Ship Repair Facility (ISRF) project.
Difference between carrying amounts and fair values of financial liabilities of borrowings is not significant in each of the year presented.
*The Company has incurred expenditure amounting to H 40,802.45 Lakhs up to March 31, 2026 (Previous year: H 40,690.02 Lakhs) towards augmentation of
infrastructure facilities for the construction of the Indigenous Aircraft Carrier (IAC) out of funds received from the Indian Navy. The ownership of the assets
created out of these funds vests with the Indian Navy.
Out of the aforesaid expenditure, the Company has identified assets amounting to H 17,856 Lakhs (Previous year: H17856 Lakhs)
proposed to be taken over by the Company, for which a formal proposal has already been submitted to the Indian Navy. Pending
transfer of ownership and finalisation of the takeover value with the Indian Navy, such assets have not been capitalised in the books
of account of the Company.
The Company continues to utilise these assets for various shipbuilding operations, including projects of the Indian Navy other than
the IAC. Upon finalisation and mutual agreement of the takeover value with the Indian Navy, the said assets will be capitalised in the
books of the Company.
Stock of raw materials and bought out components procured under "Cost Plus" part of the IAC contract amounting to H3148.87 Lakhs
(previous year H4746.37 Lakhs) held on behalf of Indian Navy lying with the Company is adjusted against Advances from Indian Navy
for Indigenous Aircraft Carrier.
During the Financial Year 2022-23, the Company has handed over the Indigenous Aircraft Carrier (IAC P-71) to Indian Navy in accordance
with the contract for the construction of IAC P-71. The Company has raised Invoice for H 1915000 Lakhs on achievement of the
delivery milestone of the contract. The balance scope of work are being completed subsequently as per the construction contract.
The Company has created provision towards contractual warranties in respect of vessels delivered, generally covering a period
of 12 months from the date of delivery. Under these warranties, the Company undertakes to rectify defects arising from
design,material,workmanship and other specified deficiencies. The outflows relating to warranty obligations are expected to
arise over the warranty period from the date of delivery of vessels. The Company generally takes an insurance policy to cover risks
associated with warranty obligations on new build vessels. The management believes that the insurance coverage will substantially
mitigate the financial impact of warranty claims.
1. Revenue is recognized when the Company satisfies performance obligations by transferring promised goods and services to
the customer over a period of time using output method based on measurement of physical performance completed to date.
Output method faithfully depicts the Company's performance towards complete satisfaction of the performance obligation and
gives a clear picture of Company's efforts and hence the same is being adopted to depict the performance completed to date.
2. Refer Note No 45 on Ind AS 115 "Revenue from Contract with Customers".
3. Out of the Revenue from Operations, H110570.34 Lakhs (H53,436.82 Lakhs in previous year) pertain to revenue from
export orders.
4. The Company has considered the lock down period due to COVID 19 & Gol circular dated May 13, 2020, which ever is applicable
to the projects and Kerala Flood natural calamity 2018 as Force Majeure period for computation of Liquidated Damages while
calculating Revenue from operations.
5. The Company is executing shipbuilding contracts with the Andaman & Nicobar (A&N) Administration for the construction of two
1200-passenger vessels (yard nos. SH.0023 and SH.0024). The contractual delivery dates, as extended, have expired for both
vessels as on 29 April 2023 for vessel SH.0023, and 30 October 2023 for vessel SH.0024.
The two vessels are customized and designed for specific operations between Andaman Islands and Main Land. Subsequently
based on a request from the A&N Administration, the Company has abated delivery activity, as the Administration has sought
reallocation of the vessels to other prospective buyers. However, such reallocation would necessitate significant technical
modifications and cost, and the vessels, in their current state, are considered to have no alternative use.
Given that the Company continues to have a valid and enforceable contract with the A&N Administration, and there is no current
mutual termination or novation of the contract, no additional provision for LD has been recognized beyond 29 April 2023 and 30
October 2023, respectively, for SH.0023 and SH.0024 for reason of abated delivery at the request of the buyer. In accordance
with the terms of the contract and based on prudent estimates, the Company has recognized provision for liquidated damages
(LD) up to the aforementioned dates.
The cumulative percentage of completion for the two vessels as on March 31, 2026 is 54.84 percent for SH.0023 and 55.19
percent for SH.0024. The total liquidated damages for SH.0023 is H 11814.08 Lakhs and for SH.0024 is H 9756.34 Lakhs up to the
financial year 2025-26. The Company has recognized revenue to the tune of H 16944.49 Lakhs towards SH.0023 and H 17158.03
Lakhs towards SH.0024 upto March 31,2026 after considering the liquidated damages.
The Andaman & Nicobar (A&N) Administration has now renewed their interest in one vessel with modification to suit their current
requirements. The Union Territory of Lakshadweep Administration (UTLA) has also similarly indicated their willingness for the
second vessel with modifications as per their requirement. The modifications are in discussion with the two administrations.
Both administrations have confirmed their willingness to take over each vessel in its current under-construction state, subject
to the necessary modifications. The Company continues to monitor developments related to this contract and will review its
accounting estimates and provisioning requirements in subsequent periods as more information becomes available.
It is anticipated that the eventual sale of the vessel to a new customer will cover the various costs incurred during the
construction and abatement period. The new price for the vessel is likely to be higher primarily due to significant inflation in
shipbuilding costs over recent years, which alter the vessel's market value.
6. The Government of India provides Ship Building Financial Assistance (SBFA) to promote domestic shipbuilding under the original
Ship Building Financial Assistance Policy (SBFAP) and the revised Ship Building Financial Assistance Scheme (SBFAP 2.0). These
schemes are aimed at compensating the cost incurred in the construction of vessels and not for any operational losses.
In accordance with the respective SBFA policy guidelines, financial assistance is available only for vessels that are constructed
and delivered within the stipulated period and are covered under an in-principle approval obtained from the Directorate General
of Shipping. For vessels governed by the Modified Guidelines for implementation of the Shipbuilding Financial Assistance
Scheme (SBFAS), eligibility is further subject to fulfilling mandatory criteria, including successful milestone-based assessments
and meeting domestic content requirements as follows:
A. Domestic content between 30% and 39% - Eligible for SBFA on a pro rata basis (proportionate to the actual domestic
content achieved).
B. Domestic content of 40% and above - Eligible for 100% SBFA (full assistance as per the scheme).
The Company recognizes SBFA income over the construction period of the eligible vessels, in proportion to the cost incurred,
provided the conditions under the policy are met or are reasonably expected to be met.
Where there is uncertainty regarding compliance with any of the policy conditions, such as delays in construction or delivery
timelines, falling short of the mandatory domestic value addition thresholds, or failing to clear independent milestone validations
resulting in non-fulfilment of eligibility criteria, the Company either does not recognize the SBFA income or derecognizes the
income previously recognized, as appropriate. Such contingencies are assessed regularly, and necessary accounting adjustments
are made to reflect the revised expectations.
During the current financial year the Company has recognised the financial assistance amounting to H6.14 Lakhs in respect of
delivered vessels as income for the current year.
During the current financial year, upon the Company's request under the Institutional Mechanism, the MoPSW granted additional
time for the delivery of vessels. Accordingly, the Company has re-recognised financial assistance amounting to H6818.75 Lakhs
in respect of vessels under construction as income for the current year.
With regard to vessels under construction, the Company has recognized financial assistance income of H15628.90 Lakhs towards
Ship Building Financial Assistance from Govt. of India, in order to compensate the cost incurred by the Company in building
the vessels. As on the reporting date, the cumulative income accrued amounting to H27651.56 Lakhs on account of financial
assistance is subject to the fulfilment of conditions stipulated in the Guidelines for Shipbuilding Financial Assistance Policy
(SBFAP), as amended from time to time.
The Company while determining the pricing of the vessels, 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 product' which was hitherto grouped under 'Other operating revenue' to give a more realistic picture.The same has no
financial impact on the revenue from operations.
7. Cochin Shipyard Ltd (CSL) commenced ship repair operations at Marine Dockyard Port Blair, under the ownership of Andaman
and Nicobar Administration (A&N Adminstration) effective from 2019 onwards. Pursuant to the Agreement signed on 28 Nov
2019, with the A&N Administration, CSL is responsible for assisting the Administration to set up a Ship repair ecosystem at
A&N islands and focussing efforts on Skill Development in the Islands, in consultation with the Administration and Technical
Institutions located there. In consideration of the services, the Company is eligible for a management fee, which is accounted
on pro rata basis in the Financial Statements.
8. During the year the Company has regrouped the Management fee under 'Sale of services' which was hitherto grouped under
'Other operating revenue' to give a more realistic picture. The same has no financial impact on the revenue from operations.
9. Revenue from operation includes revenue from contract for construction and supply of eight numbers of Anti -Submarine
Warfare Shallow Water Crafts (ASW SWC) to the Indian Navy. Pursuant to a customer clarification on the delivery schedule,
the due dates for subsequent vessels are calculated from the actual delivery date of the first vessel. Accordingly, LD has been
provided only for the first vessel (where delayed). No LD has been provided for the subsequent vessels, as their expected
delivery dates are within the prescribed contractual schedule.
10. In respect of ship repair contracts with the Indian Navy, revenue is recognised over time using the output method based on
physical progress of work completed to date. Mandatory spares provided under these contracts are not distinct performance
obligations, as they are integral to and inseparable from the repair service. The vessel cannot be repaired without consuming
them, and the customer cannot benefit from the spares independently of the repair. Accordingly, mandatory spares are treated
as part of a single performance obligation (repair of the vessel), and their cost is included within the total contract value
for revenue recognition. Percentage completion determined for the vessel captures the consumption of mandatory spares
issued for repair up to the reporting date; hence no separate measurement or recognition of revenue against mandatory
spares is undertaken.
11. The Company reassesses the measurement progress of its performance obligation under the output method as mandated by
Ind AS 115 at every reporting date. During the financial year 2024-25, the Company noticed that on application of Ind AS 21, the
existing measurement resulted in variations in faithful representation of revenue in the case of export contracts denominated
in foreign currency. In order to address the same, the Company refined its quantification approach for the said contracts.
Revenue is recognised by applying the physical completion percentage on the total transaction price, which the Company is
entitled to, without bifurcating between material and service portions. The effect of change in the quantification measure has
resulted in increase in revenue from operations for H Nil (Previous year H 11808.65 Lakhs).The Company is consistently adopting
this measurement technique in recognising revenue for contracts involving similar performance obligations.
The Company had initiated construction of two 60-ton green tug hulls during the Financial year 2024-25 as part of Green Tug
Transition Programme (GTTP) as a significant initiative introduced by the Government of India focussing on the reduction of carbon
emissions in the maritime sector. Subsequently, in January 2026, the Company received an order from a private customer for the
construction of two 60-ton green tugs. Consequently, the expenses incurred in respect of the above tugs have been transferred from
Work-in-Progress (WIP) and charged to profit and loss account during the financial year 2025-26.
Contribution to Provident Fund and Family Pension Fund includes provident fund inspection and administration charges H 29.64
Lakhs (previous year H 28.07 Lakhs).
Salaries, Wages, bonus/exgratia and allowances includes provision for encashment of half pay compensated absences for workmen
amounting to H(5.27) Lakhs (previous year H103.82 Lakhs).
The employee benefits accruing to the employees on deputation from Cochin Port Trust and Mumbai Port Trust are being accounted
based on demands received from Cochin Port Trust & Mumbai Port Trust as per tripartite agreement between the Company, Cochin
Port Trust & Mumbai Port Trust and the recognised Trade unions of the Port and not based on actuarial valuation except for gratuity
which is actuarially valued.
Post-employment obligations
CSL has recognized the gratuity liability for on-contract workmen as of March 31, 2026, based on actuarial valuations completed
for FY 2025-26, consequent to the Gazzette Notification of the labour code. No additional provisions are required for Officers,
Supervisors, or Workmen, as their current wage components already exceed the 50% threshold for PF and gratuity calculations.
Similarly, leave encashment liabilities remain unchanged because existing actuarial provisions sufficiently cover regular staff, while
contract employees do not carry forward enough leave to trigger new liabilities. The restructuring of consolidated pay for contract
workers is designed to be cost-neutral, ensuring that total gross pay and related financial outgoings remain stable. Consequently,
CSL has mitigated potential compliance risks through proactive liability entries and internal committee reviews without incurring
significant unprovided expenses.
Provident fund
Provident Fund for eligible employees is managed by the Company through a trust in line with the Provident Fund and Miscellaneous
Provision Act,1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the
employees and employer @12% of basic salary (including Dearness Allowance) together with the interest accumulated thereon are
payable to employees at the time of separation from the Company or retirement whichever is earlier. The benefits vests immediately
on rendering of the services by the employee. The contribution is charged to Statement of Profit and Loss of the year when the
contributions to the respective funds are due in accordance with relevant statute. Employer's contribution to Provident Fund &
Pension fund is H1980.54 Lakhs for the year 2025-26 (H1872.67 Lakhs for the year 2024-25). The minimum interest rate payable by
the trust to the beneficiaries every year is notified by the Government. The Company has an obligation to make good the shortfall,
if any, between the return from the investments of the trust (including investment risk fall) and the notified interest rate, which is
determined on the basis of actuarial valuation
The Company has obtained report on the determination and disclosure of interest rate Guarantee, valuation of Assets & Liabilities as
per Ind AS 19 of Employees Benefits relating to Exempt Provident Fund for the period ended March 31, 2026.
a) USHUS is a start-up support program of CSL in association with Indian Institute of Management Kozhikode (IIMK) & Indian
Institutes of Technology Madras (IITM) to augment the Government of India's initiatives to encourage and develop an
ecosystem in India to support Maritime Start-ups. As part of this program Maritime start-ups will receive seed funds from CSL as
grants/investments.
b) IIMK LIVE & IIT Madras will review and recommend the proposals received under this scheme for funding by CSL. Fee for their
services amounts to H27 Lakhs current year (Previous Year - H26.50 Lakhs). During the FY:2025-2026 H227.50 Lakhs has been
disbursed to 10 start ups identified by IIMK (Previous Year 105 Lakhs-9 start ups) & H250 Lakhs has been disbursed to 8 start ups
identified by IITM (Previous Year: NIL ) under seed funding scheme.
c) Refer Note No: 5 and Note No: 21 relating to Research and Development project under the R&D initiative of the Ministry of
Ports, Shipping and Waterways (MoPSW).
C. Details of transaction price allocated to unsatisfied/ partially satisfied performance obligations:
Aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially
unsatisfied) as of the end of the reporting period amounts to H16071 1 1.19 Lakhs (excluding Cost Plus Part of IAC contract)
(Previous Year H1448711.90 Lakhs).The amount of transaction price relating to unsatisfied performance obligation that are
part of a contract that has an original expected duration of one year or less has not been included in the above disclosure as
permitted under Ind AS 115. Further the estimate of the transaction price as above would not include any estimated amounts
of variable consideration that are constrained.Management expects that 26.40% of transaction price allocated to unsatisfied/
partially satisfied contracts as of March 31, 2026, as stated above, will be recognised as revenue during FY 2026-27 and the
remaining thereafter.
Note 46: Additional Disclosures under Ind AS 116-"Leases"
Rent and Hire charges Expense includes expense incurred for the year ended March 31,2026 on Short term leases and leases of low
value assets amounting to H1658.05 Lakhs (Previous year H1138.51 Lakhs)
Total Cash outflow for leases for the year ended March 31,2026 including outflow on short term and low value leases is H3589.69Lakhs
(Previous year H3085.66 Lakhs)
The Company has lease term extension options that are not reflected in the measurement of lease liabilities
Note 47: Additional Disclosures for Hedge Accounting
The Company enters into foreign exchange derivative contracts to offset the foreign currency risks arising from the amounts
denominated in currencies other than Indian Rupee. The counter party to the Company's foreign currency forward contracts is a bank.
The Company has entered into a non-binding MOU with HD Korea Shipbuilding & Offshore Engineering Co. Ltd. (KSOE), South Korea
during FY 2025-26, proposing a Joint Venture to set up and operate Block fabrication facility in Kochi utilizing the designated facility
which is the 310 meter New Dry Dock. The said asset has been classified under Property, Plant and equipment at its carrying value
of H134181.09 Lakhs.
The Company has entered into a non-binding MOU and Heads of Terms agreement with Drydocks World - Dubai FZCO (DDW)
during FY 2025-26, proposing a Joint Venture to operate and expand the International Ship Repair Facility (ISRF) in Kochi.
As of the Balance Sheet date, no binding Shareholders' Agreement or Business Transfer Agreement has been executed. Accordingly,
the assets collectively called the ISRF facility continues to be classified under Property, Plant and Equipment at its carrying value of
H105316.53 Lakhs.
Note 49 : Value of advance Bank Guarantee outstanding as on reporting date is H1058307.85 Lakhs (Previous year H1032503.48 Lakhs).
Note 50 : Litigations :
The Company is subject to legal proceedings and claims, in the ordinary course of business. The Company's Management does not
reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the
Company's results of operation.
H 3500 Lakhs has been allocated for R&D and innovation initiatives Fund, for development of pilot Autonomous Surface Vessel Project.1%
of average turnover based on the audited financial results of the standalone financial results of CSL for the last three financial years is
set aside as yearly budget for the Research and Development/Innovation initiatives of CSL. Further the Board has granted approval for
funding support not exceeding H 5000 Lakhs to "USHUS" project under CSL's Start-up Engagement Policy Framework.
Note 52 : Corporate Social Responsibility (CSR) : As per section 135 of the Companies Act 2013, CSR committee has
been formed by the Company. The areas of CSR activity includes Health Care, Education, Social Empowerment, etc., and other areas
permitted in Schedule VII to the Companies Act 2013. The utilisation of CSR funds are done as per the recommendations of CSR
committee. Details of amount required to be spent and the amount utilised are given below:
India Ship Technology Centre (ISTC) was incorporated on March 29, 2026 as a Section 8 Company limited by guarantee and not
having share capital under the directions of the Ministry of Ports, Shipping and Waterways (MoPSW) to support the development
of the Indian shipbuilding sector through participation of shipyards, ship designers, academic institutions, research and training
organisations, industry associations and professional bodies etc. Director (Finance) and Director (Operations) of CSL serve as initial
members and directors of ISTC, with their appointment and direction being subject to the encouragement and strategic guidance of
the Ministry of Ports, Shipping and Waterways (MopSW). CSL provides only administrative, operational and managerial assistance on
a reimbursable basis, and all actual expenses incurred by CSL for ISTC are reimbursed upon allocation of funds by the Government of
India. The current governance structure is temporary and established solely to expedite the incorporation process; upon formation
of an independent Board, ISTC will be an independent and autonomous entity under the Ministry of Ports, Shipping and Inland
waterways. Accordingly, ISTC is treated as a related party operating under the strategic guidance and encouragement of the
Government of India. ISTC has total assets of H Nil and total liabilities of Hnil as at March 31,2026. Reimbursable expenses incurred on
behalf of ISTC during the year amounted to H nil, with H nil as at the reporting date.
Note 54 : FINANCIAL INSTRUMENTS
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consist of the following three levels:
Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level II inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level III inputs are unobservable inputs for the asset or liability.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are
not measured at fair value on a recurring basis
Note:
1. The investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic
purpose.The Company has chosen to designate these investments in equity instruments of Subsidiary at cost (as per Ind AS
27 ) and other equity instruments at FVTOCI (as per Ind AS 109), as the Company believe that this provides a more meaningful
presentation of medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.
The investments in debt instruments are not held for trading. Upon the application of Ind AS 109, the Company has chosen to
designate these investments at Amortised Cost.
Investments included in level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value.The
cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and
the cost represents estimate of fair value within that range.
There were no transfers between Level 1 and 2 in the period.
2. Loans, Borrowings are at the market rates and therefore the carrying value is the fair value.
3. The carrying amount of trade receivables are considered to be the same as their fair value due to their short term nature.
4. For financial liabilities (trade and other payables and security deposits), fair value at amortised cost is determined by using
discounted cash flow method; amortised on an aggregated basis and on straight line, as their individual impact is not considered
material. Appropriate market borrowing rate of the Company as of each balance sheet date is used for discounting.
5. Difference between carrying amounts and fair values of bank deposits, other financial assets,short term loans, other financial
liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.
Note 55 : Financial Risk Management Policy
Financial Risk Management Objective and Policies:
The Company's principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables
and advances from customers. The Company's principal financial assets include Investment, loans and advances, trade and other
receivables and cash and bank balances that derive directly from its operations. The Company is exposed to market risk, credit risk
and liquidity risk. The Company's senior management oversees the management of these risks. The Board provides written principles
for overall risk management as well as policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, the
use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity. The Company
does not enter into or trade financial instruments, including derivatives for speculative purposes.
Market Risk
Market risk is the risk that the fair value of future cash flows of financial assets will fluctuate because of changes in market prices.
Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, being mainly commodity price
risk. Financial Assets affected by market risk include loans and advances, deposits and derivative financial instruments.
A. Interest rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company's exposure to the risk of changes in market interest rates is minimal since the exposure
relates primarily to the Company's long-term debt obligations of redeemable non-convertible bonds with fixed interest rates as
disclosed in Note 24 . With the current profile of fixed rate borrowing, the Company is not sensitive to interest rate fluctuations.
The Company is exposed to interest rate risk because the Company borrows working capital funds benchmarked to overnight
Treasury Bills, RBI Repo, six months EURO Inter Bank Offered Rate (EURIBOR)
B. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's
operating activities (when revenue or expense is denominated in a foreign currency).
Foreign currency risk of the Company is managed through a properly documented risk management policy approved by the
board. The Board of directors also reviews the foreign currency exposure of the Company on quarterly basis. The Company
manages the net foreign currency risk mainly by entering into forward contracts with the bank as the counter party. The
disclosures of outstanding forward contract as on reporting date is given in Note 47.
The Company's exposure to foreign currency risk net of hedged exposure at the end of the reporting period expressed in INR
(foreign currency amount multiplied by closing rate) are as follows:
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of steel,
major machineries, equipments etc. The Company primarily purchases its raw materials in the open market from third parties.
The Company is therefore subject to fluctuations in prices for the purchase of steel, being the primary raw material inputs. The
Company aims to sell the finished products based on firm contract which is negotiated after due consideration of the expected
raw material prices. Therefore, the Company plans its purchases closely to optimise the price. Further since the products are
of a specific nature which does not entail competition and is heterogeneous in nature due to its specification, the Company's
exposure to commodity risk is minimal.
The following table details the Company's sensitivity to a 5% movement in the input price of steel. The sensitivity analysis
includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant.
D. Liquidity Risk
The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by
delivering cash or another financial asset. Liquidity risk may arise from an inability to sell a financial asset quickly at a rate close
to its fair value.
The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects.
The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents
provides liquidity in the short-term and long- term and manages the liquidity risk by continuously monitoring forecast and actual
cash flows, and by matching the maturity profiles of financial assets and liabilities as depicted below.
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances
to suppliers) and from its exposure to other financial assets, including deposits with banks and financial institutions, derivative
instruments, and other financial instruments. The Company has adopted a policy of only dealing with counterparties that have
sufficiently high credit rating in order to manage the credit risk. Trade receivables mainly comprise of government entities and
the cash and cash equivalents and derivative instruments are maintained with banks and recognised financial institutions with
high credit rating.
For trade receivables, as a practical expedient the Company computes credit loss allowance based on a provision matrix which
considers historically observed default rates over expected life of trade receivables, adjusted for forward looking estimates.
The movement in expected credit loss allowance is disclosed in Note 15.
The Company's maximum exposure to the credit risk for the components of Balance Sheet as March 31, 2026 and March 31,
2025 is the carrying amounts mentioned in Note no 15 and as stated in Note 53, around 73.20%(approx) of Company's turnover
and 79.19% (approx.) of trade receivables and customer advance is with respect to Government and Govt. regulated entities.
The maximum exposure relating to financial derivative instruments and financial guarantees is disclosed in Note 47 and Note
49 respectively.
The Company has two major business segments -"shipbuilding" and "ship repair". Revenue under shipbuilding includes H158820.82
Lakhs (previous year: H206665.27 Lakhs) from two customers (previous year: two customers) having 59.90% revenue of the total
Shipbuilding revenue, and for ship repair includes H100833.29 Lakhs (previous year: H153005.55 Lakhs) from two customers (previous
year: two customers) having 60.88% in total of the total ship repair revenue.
Note 58 : Capital Management
The Company's objective when managing capital are to safeguard their ability to continue as a going concern so that they can
continue to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital.
For the purpose of capital management, capital includes issued equity capital and all other equity reserves attributable to the equity
holders of the parent. The Company is not subject to any externally imposed capital requirements.
To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to
shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity. The
Company includes within net debt, interest bearing loans and borrowings (including bonds).
Note 59 : The Company has used the ERP, SAP S/4HANA as the accounting software for maintaining its books of account, which has
a feature of Security audit log and recording audit trail (edit log) facility throughout the year for all relevant transactions recorded in
the respective software except for the instances mentioned below.
i. 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 SAP database tables are
not being carried out.
ii. Security audit log was enabled in the ERP from 2022 onwards.The feature of recording audit trail (edit log) facility of the
accounting software was enabled on March, 2024.
Further no instance of audit trail feature being tampered with was noted in respect of the accounting software and records are
preserved in compliance with statutory requirements.
Note 60 : Consumption of imported goods/services for the year amounts to H87614.38 Lakhs (H80419.32 Lakhs in previous year).
Note 61 : No proceedings have been initiated or pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
Note 63 : The Company is not declared wilful defaulter by any bank or financial Institution or other lender.
Note 64 : The Company has no transactions with the companies struck off under section 248 of Companies Act, 2013 or section
560 of Companies Act, 1956.
Note 65 : There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.
Note 66 : No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries. No funds have been received by the Company from any person(s)
or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that
the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall (i) directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide
any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
Note 67 : The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence disclosures
relating to it are not applicable.
Note 68 : In the case of contracts/ sub-contracts, wherever final bills are not submitted by the contractors for the work done as at
the close of the year, liability is estimated and provided based on the work done.
Note 69 : The Company has made adequate provision towards material foreseeable losses wherever required, in respect of long
term contracts. The Company do not have any long term derivative contracts for which there were any material foreseeable losses.
Note 70 : Figures in brackets denote negative figures.
Note 71: Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year presentation.
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