Markets

1. Your Directors have immense pleasure in presenting the
54^th Annual Report of your Company along with the audited
financial statements for the year ended March 31,2026.

Financial Performance

2. Diversified operational segments and product profile
helped the Company to achieve a turnover of H4,307.69
Crores for the year as compared to H4,527.84 Crores in the
year 2024-25. The profit before tax is H886.40 Crores for

the year as against H1,133.85 Crores in the previous year.
The net profit is H643.04 Crores as compared to H842.91
Crores for the previous year.

3. The authorised share capital of the Company is
H2,50,00,00,000 divided into 50,00,00,000 equity shares
of face value of H5 each. The paid-up share capital of the
Company is H1,31,54,03,900 divided into 26,30,80,780

equity shares of face value of H5 each.

Financial Highlights

Dividend

4. As per Office Memorandum F. No. 5/2/2016-Policy

dated November 18, 2024 issued by the Department
of Investment and Public Asset Management (DIPAM),
every CPSE has to pay a minimum annual dividend of
30% of PAT or 4% of the networth, whichever is higher.
Accordingly, your Directors are pleased to recommend a
final dividend of H1.50 per share on the 26,30,80,780 fully
paid equity shares of H5 each. Earlier, interim dividends
of H4 and H3.50, aggregating to H7.50 per equity share
had been paid to the shareholders during 2025-26. Thus,
the total dividend for the year 2025-26 is H9 per equity
share (180%), amounting to H236.77 Crores. During the

reporting period, the unpaid/ unclaimed Final Dividend
for the year 2017-18 and the corresponding eligible equity
shares became due for transfer to the Investor Education
and Protection Fund (IEPF) pursuant to Section 124 of the
Companies Act, 2013. Accordingly, the unclaimed dividend
of H5,97,180 pertaining to the Final Dividend for the year
2017-18, was transferred to the IEPF Authority on October
09, 2025. Further, 2,799 equity shares in respect of which
the dividend remained unclaimed for seven consecutive
years, were also transferred to the demat account of the
IEPF Authority on October 10, 2025.

Dividend Distribution Policy

5. As per Regulation 43A of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the top 1,000 listed entities shall
formulate a dividend distribution policy. Accordingly,
dividend distribution policy has been adopted to set out
the parameters and circumstances that will be taken into
account by the Board in determining the distribution of
dividend to its shareholders and/ or retaining the profit
into the business. The policy is available on the website
of the Company at the linkhttps://cochinshipyard.in/
investor/investor titles/68.

Transfer to Reserves

6. The details of the amount transferred to reserves are
given at Note 23 of the Standalone Financial Statements
of the Company for the year ended March 31, 2026 which
forms part of the Annual Report. As on March 31, 2026,
the Company has Reserves and Surplus amounting to
H5,761.29 Crores which reflects the inherent financial
strength of the Company. As per the amendment made
to the Companies (Share Capital and Debentures) Rules,
2014 notified vide Notification No. G.S.R. 574(E) by the
Ministry of Corporate Affairs, the Company is not required
to create Debenture Redemption Reserve in respect of
the bonds issued by it. As on March 31, 2026, 8.72% Tax
Free, Secured, Redeemable, Non-Convertible Bonds of
only H23 Crores are outstanding for CSL, which will mature
in March 2029.

Shipbuilding

7. The Company achieved a total shipbuilding income of
H2,651.39 Crores during 2025-26 as against H2,663.27
Crores in 2024-25. During the year CSL successfully
delivered two Hybrid Electric Catamaran Hull Vessels to

Kochi Metro Rail Limited (KMRL), two Anti-Submarine
Warfare Shallow Water Crafts (ASW SWC) to the Indian
Navy, one Multi-Purpose Vessel (MPV) to HS Service GMBH
& Co. KG, Germany and one Hybrid Electric Catamaran
Passenger Vessel to Inland Waterways Authority
of India (IWAI).

Shipbuilding Order Book Position

8. During the year 2025-26, CSL received an order for
construction of two Tugs of 70 T Bollard Pull Power
and two Green Tugs of 60 T Bollard Pull Power from
Polestar Maritime Limited. CSL also secured an order for
constructing four 26-metre fully electric 'TRAnsverse'
("TRAnsverse 2600E") 70 Ton Bollard Pull Tugs for Svitzer,
Denmark and an order for construction of six 1,700 TEU
LNG Fuelled Feeder Vessels from CMA CGM, France. The
unexecuted order book of the Company as on March
31, 2026 stands at around H18,900 Crores, consisting of
around 51 vessels with Defence order book at H12,150
Crores consisting of 12 vessels, Commercial (domestic)
order book at H725 Crores consisting of 16 vessels
and Commercial (export) order book at H6,025 Crores
consisting of 23 vessels. Out of the total Commercial order
book of H6,750 Crores, around 90% is export order and
around 40% comprises of green vessels.

Ship Repair

9. During the year, the Company achieved a total ship
repair income of H1,656.30 Crores, compared to
H1,864.57 Crores in the previous year. Major vessels
repaired during the financial year at the CSL Kochi main
yard include defence vessels including Aircraft Carrier,
Swarna-series tankers of SCI, and SPM Buoy-01, among
others. CSL also successfully completed repairs of private
commercial vessels MT Orchids and Shanti Sagar 17,
meeting internationally benchmarked turnaround time.
The conversion project - MR and MLU and Re-engining of
defence vessel is in the final stages of completion. CSL also
successfully undertook repairs of DCI Dredge VIII, marking
the first ship repair project executed in the New Dry Dock
following its commissioning. Further, after a gap of 17
years, CSL secured the contract for dry dock repairs of JUR
Sagar Kiran of ONGC, which is currently under repair in
the New Dry Dock.

10. The International Ship Repair Facility (ISRF), developed
on land leased from the Cochin Port Authority, is a state-
of-the-art facility aimed at enhancing India's ship repair
capabilities for handling vessels of maximum 130 metre
length. Constructed at a cost of H970 Crores, the facility
includes a 6,000 T capacity ship lift and transfer system, six

workstations and around 1,400 metres of berthing space,
enabling simultaneous repair of six vessels and an annual
throughput of up to 82 ships. This facility, inaugurated by
the Hon'ble Prime Minister, Shri Narendra Modi on January
17, 2024, was brought into full-fledged operations during
the financial year. Around 35 refits were undertaken at
ISRF during the reporting period, covering a wide variety
of vessels from clients such as LDCL, Indian Navy, Dulan
International, NIOT and FSI. The Medium Refits of two RE
class defence vessels are currently in the advanced stages.
The ISRF reported a revenue of H207.33 Crores for FY26.
Further, ten globally renowned firms in the maritime
industry have already partnered with CSL for setting up
their units in the Maritime Park situated at ISRF in the first
phase and six firms started their operations.

11. During FY 2025-26, CSL Mumbai Ship Repair Unit (CMSRU)
undertook dry dock and afloat repairs of 12 vessels,
including normal and short refits for various government
agencies and the Indian Coast Guard, as well as minor and
major repairs for commercial clients. Refits of four JSW
bulk carriers were executed under the MoU signed with
JSW Shipping & Logistics Private Limited for repair of their
fleet. Since its operationalisation, CMSRU has successfully
completed repairs of approximately 137 vessels and the
Unit has achieved a record turnover of H208.72 Crores
during the financial year. An additional berth ID-9 was
allocated to CMSRU in July 2025 by Mumbai Port for
further augmenting its repair capabilities at Mumbai.

12. Since commencing operations in October 2019 at Netaji
Subhas Dock, Kolkata, CKSRU (CSL Kolkata Ship Repair
Unit) has successfully completed 33 refit projects. During
FY 2025-26, nine refits were undertaken, including
major dry dock and repair works for Indian Coast Guard,
SMPA, SCI, DCI and GRSE vessels. Key projects executed
include MV Swaraj Dweep, MV Kalighat, ICGS Samudra
Paheredar, Yard 3022 (P17A), DV Rabindra and DCI Dredge
XXI. Operations commenced at the dedicated berth 6
NSD in July 2025. Significant infrastructure upgrades,
including development near Dry Dock 2, refurbishment
of existing facilities and procurement of a hydra crane
were also completed, strengthening CKSRU's operational
capabilities. CKSRU earned a total revenue of H100.12
Crores for FY26.

13. During FY 2025-26, CANSRU (CSL Andaman & Nicobar Ship
Repair Unit) achieved a record turnover of H228.39 Crores
by completing 11 dry dock repairs, 11 afloat/ routine
repairs, two major CSM routines and 1,437 emergency
repairs. The Unit also marked five years of successful
operations, ensuring reduced turnaround time for DSS
ship repairs, enhanced repair quality and improved vessel

reliability, thereby greatly improving vessel availability
for the island population from 4 vessels to 15 vessels
in the foreshore sector and 11 inland vessels for DSS.
CANSRU has consistently met its turnover targets over
the past four years while contributing to skill development
through training initiatives, expanding its vendor base
and strengthening a reliable repair ecosystem. Approval is
awaited from A&N Administration on the DPR submitted
for Marine Dockyard modernisation.

Expansion Projects

Ship Repair Facility at Vadinar, Gujarat

14. CSL along with Deendayal Port Authority (DPA),
under the aegis of the Ministry of Ports, Shipping and
Waterways (MoPSW), Government of India, is developing
a state-of-the-art Ship Repair Facility at Vadinar, Gujarat
for repair of vessels up to 300 m length, with a combined
investment of H1,570 Crores. The project is planned as
a brownfield facility with a 650 metres jetty, two large
floating dry docks, workshops and associated marine
infrastructure. DPA will develop the civil infrastructure,
including jetties, at an estimated cost of H650 Crores and
CSL will bring in the ship repair infrastructure including two
large floating docks costing about H920 Crores and operate
the facility. The project has been approved by the Cabinet
Committee on Economic Affairs (CCEA) on May 05, 2026.

CSL Strategic & Advanced Solutions (C-SAS)

15. In order to tap new revenue generation streams beyond
the current Shipbuilding & Ship Repair portfolios, a
dedicated division named CSL Strategic & Advanced
Solutions (C-SAS) was formed to enable the Company
to venture into the arena of strategic and knowledge
driven future technologies in the maritime sector. C-SAS
has been actively engaged in identifying and developing
sustainable and future-oriented business models. Various
innovative initiatives undertaken by C-SAS Division during
the financial year 2025-26 are more specifically covered in
the Management Discussion and Analysis Report.

Subsidiary Companies

(i) Hooghly Cochin Shipyard Limited (Hooghly-CSL)

Hooghly-CSL was initially set up as a joint venture between
CSL and Hooghly Dock & Port Engineers Limited (HDPEL)

on October 23, 2017. Pursuant to the approval of the
Union Cabinet, CSL acquired the shares held by HDPEL
and with effect from November 01, 2019, Hooghly-CSL
became a wholly owned subsidiary of CSL.

The Company set up a new state-of-the-art ship building
and repair facility at Nazirgunge and on August 16, 2022,
the facility was dedicated to the nation by Shri Sarbananda
Sonowal, the Hon'ble Minister of Ports, Shipping and
Waterways, Government of India. The facility has been set
up in an area of 15.76 acres on the banks of river Hooghly
at a cost of H175.20 Crores with an intention to position
itself as a premier shipbuilding/ repair yard in the East
Coast of India for inland and coastal vessels.

During the financial year 2025-26, Hooghly-CSL successfully
delivered one Hybrid Electric Catamaran Passenger Vessel
contracted for Inland Waterways Authority of India (IWAI),
for deployment in National Waterways 1 and 2. Hooghly-
CSL has an unexecuted order book of around H200 Crores
as on March 31,2026.

Hooghly-CSL has reported a total income of H129 Crores
for FY26 as against H62.40 Crores for the previous year.
The Company has reported a loss of H19.53 Crores for FY26
as against a loss of H17.38 Crores for the previous year.

(ii) Udupi Cochin Shipyard Limited (Udupi-CSL)

Udupi-CSL is a wholly owned subsidiary of CSL based
in Udupi and is primarily engaged in building small and
medium sized vessels. During the financial year 2025-26,
Udupi-CSL delivered four 3,800 TDW Cargo Vessels to
Wilson ASA, Norway, along with two 70T Bollard Pull Tugs
to Ocean Sparkle Limited. Udupi-CSL has an unexecuted
order book of over H2,000 Crores as on March 31, 2026.

Coming to the financials, Udupi-CSL reported a total
income of H630.21 Crores for the year ended March 31,
2026, compared to H278.62 Crores in the previous year.
The revenue from operations increased to H618.12 Crores
in FY 2025-26, up from H265.64 Crores in FY 2024-25. The
Company reported a profit of H93.39 Crores in FY 2025-26,
compared to a profit of H2.63 Crores in FY 2024-25.

Strategic Initiatives

(i) Investing in Marine Electrification Technologies - JV
with HBL

CSL is in the advanced stages of forming a Joint Venture
Company with HBL Engineering Limited (HBL) for the
purpose of developing electric mobility technology and
energy storage solutions in the maritime space to cater
to both domestic and global markets. Towards this a Joint
Venture Agreement has been executed between CSL
and HBL on March 25, 2026 and the incorporation of the
Company under the Companies Act, 2013 is in progress.
The proposed Joint Venture Company, to be named

'GREEN MARITIME PROPULSION PRIVATE LIMITED', will
have an initial share capital of H9 Crores, with CSL investing
40% and HBL investing the remaining 60%. The registered
office of the Joint Venture Company will be situated in
Hyderabad, India.

(ii) Acquiring stake in an overseas ship design company -
Conoship International Holding B.V., Netherlands

CSL plans to acquire 23% equity stake in Conoship
International Holding B.V., Netherlands to enable CSL to
penetrate to European coastal and short sea shipping with
advanced design solutions. The Department of Investment
and Public Asset Management (DIPAM) has concurred the
proposal and the process of acquisition has been initiated.

(iii) India Ship Technology Centre (ISTC)

In March 2026, CSL became a subscriber member with
Board representation of the India Ship Technology Centre
(ISTC), a Section 8 (non-profit) Company incorporated
under the aegis of the Ministry of Ports, Shipping and
Waterways (MoPSW), Government of India. ISTC is
established to promote research, development and
technological advancement in the field of shipbuilding
and marine engineering in India. It aims to strengthen
indigenous capabilities in ship design, naval architecture
and marine systems and to provide advanced facilities for
testing and validation of ship technologies.

Manpower Status

16. The manpower strength of the Company as on March 31,
2026 was 4,013 consisting of 529 executives, 269 supervisors,
1,333 workmen and 1,882 on-contract employees (245
officers, one supervisor and 1,636 workmen). Further, as
on March 31, 2026, the Company also had 1,301 trainees
including 644 under the Apprentices Act, 1961, 22 from the
Centre of Excellence in Maritime and Shipbuilding (CEMS)
and 29 under the Prime Minister's Internship Scheme (PMIS).

17. During the year 2025-26, CSL recruited a total of 1,477
personnel comprising of three executives, 45 executive
trainees, two supervisors, 35 workmen, 664 on-contract
employees (87 officers and 577 workmen), 728 trainees
including 665 under the Apprentices Act, 1961, 24 from
CEMS and 39 under PMIS.

Industrial Relations

18. CSL continued to maintain and foster cordial industrial
relation atmosphere during the year. There was no loss
of man hours on account of labour unrest due to reasons
attributable to the Company exclusively.

19. The executives and non-unionised supervisors also

continued to contribute their best to the Company
during the year.

20. The joint management forums like joint councils, shop
council, central safety committee, shop level safety
committees, contract worker safety committee, canteen
management committee, employees' contributory
provident fund trust etc., continued to function effectively.

21. Employees and their dependents welfare and wellbeing
are well taken care through various voluntary schemes
like Employees Medical Assistance Scheme, Employees
Pension Scheme, Shipyard Parivar Prathibha Puraskar
Scheme, Employees Educational Assistance Scheme etc.

Human Resource Development

22. CSL gives utmost importance in empowering employees'
growth and developing their knowledge, skills and
capabilities to drive better business performance.
Acknowledging this fact, CSL has defined continuous
learning as one of its cultural competencies and is
constantly engaged in up-skilling the workforce.

23. In line with the above, several learning and development
activities were carried out during the year 2025-26
spanning various sectors and covering both technical and
non-technical workforce. The Company has implemented
a training scheme 'Igniting Minds' wherein the senior
executives of the Company were nominated for various
programmes on divergent topics such as ESG, climate
change, and building future ready organisations and
artificial intelligence strategy by IIM Bangalore, AI for
managers, high impact leadership, project management,
coaching and mentoring for effective leadership by IIM
Lucknow, operational and organisational excellence,
responsible AI and emerging frameworks, MDP on finance
for non-finance executives by MDI Gurgaon, the winning
edge: communication strategies for leaders, mergers,
acquisitions and restructuring, interpersonal effectiveness
and team building, strategic human resource management
by IIM Ahmedabad, etc.

AOTS (Association for Overseas Technical Cooperation and

Sustainable Partnerships) Training in Japan

24. A total of 40 employees attended a customised training
programme in Japan, conducted in two batches of 20
participants each in November 2025 and February 2026
respectively. Each batch comprised one Executive, two
Supervisors, and 17 Workmen. To encourage greater
gender representation in skill development initiatives,
women employees were included in both batches. The

training programme was a combination of classroom
coaching and factory visits including shipyards in Japan. The
training programme covered areas such as Japanese work
culture, workplace management, social behaviour, culture
displayed by Japanese in public places and included visits to
a shipbuilding company and other major industries to get
a feeling of latest technology in use, safety management
practices, robotics technology in action and productivity
improvement practices through 5S and Kaizen.

Other Foreign Training

25. During FY 2025-26, one senior executive attended a
two-week DFC course on innovation management at
Copenhagen, Denmark (August 2025). Furthermore, one
junior executive attended a DFC course on decarbonisation,
energy efficiency and new green solutions in shipping at
Copenhagen, Denmark (November 2025). Two Executives
attended Osaka expo to Japan-CII learning mission at
Yumeshima Island, Osaka (August 2025).

Customised Internal Trainings

26. During the financial year 2025-26, CSL organised a wide
range of customised in-house training programmes to
enhance the competencies of executives, supervisors
and employees. The initiatives included Management
Development Programmes on general management
and project management in collaboration with leading
academic institutions, competency-based residential
training on teaming and communication skills and welding,
orientation programmes for retiring employees, security
sensitisation sessions, training on first aid, the POSH Act,
energy management system awareness and programmes
on service conditions, cyber hygiene and security,
procurement, General Financial Rules (GFR), public
procurement policy and GeM during Vigilance Awareness
Week 2025. In addition, CSL conducted the Young
Officers Competency Development Programme (YOCDP),
Supervisors Competency Development Programme
(SCDP) and in-house mentoring sessions for mentors and
mentees, addressing the organisation's specific capability
development needs.

27. During the financial year 2025-26, CSL conducted over
306 training programmes, totaling around 8,706 man-
days, both in-house and at premier institutions, benefiting
more than 6,758 participants. Emphasising the importance
of continuous learning and leadership development, CSL
introduced its leadership talk series, Prajyoti and Prajnan.
These sessions are designed to inspire and engage the
workforce through short talks delivered by distinguished
personalities from diverse fields.

Educational Scholarships to Wards of Employees

28. 'Shipyard Pariwar Prathibha Puraskar', an educational
scholarship scheme introduced from the year 2016 aims
to reward and promote the star performers among the
wards of regular employees of CSL. A scholarship of
H25,000 per year for a maximum period of five years shall
be bestowed in the order of highest marks scored by the
wards in class XII final examination. During the year 2025¬
26, 22 eligible students have been granted scholarship
under the said scheme.

Recognising Excellence

29. CSL has introduced the Employee Excellence Awards
Scheme to recognise and reward innovative ideas and
practices among employees up to the level of AGM. The
highest honour under the scheme is the Chairman's Award,
which comprises a citation and a cash prize of H15,000.

30. During the Independence Day celebrations in 2025, 41
employees (eight executives, one supervisor, 24 workmen
and eight on-contract personnel) were honoured with
the Chairman's Commendation, which carries a cash prize
of H2,000. During the Republic Day celebrations in 2026,
one employee was bestowed with the Chairman's Award
and 29 employees (ten executives, five supervisors, ten
workmen and four on-contract personnel) were awarded
the Chairman's Commendation.

International Yoga Day

31. Employees and their family members were encouraged
to observe International Day of Yoga. As a part of this,
CSL conducted common yoga protocol practice on June
21, 2025, in order to promote yoga with an aim to relieve
stress, support good health habits and improve mental/
emotional health. Further, live streaming of the event was
also made available for participation by family members
of the employees.

Marine Engineering Training Institute (METI)

32. During the financial year 2025-26, METI continued to
strengthen its position as a premier maritime training institute
by successfully training 140 Graduate Marine Engineering
(GME) cadets under the one-year programme approved by
the Directorate General of Shipping (DGS), while 160 GMEs
are currently undergoing training following the enhancement
of its approved intake capacity from 140 to 160.

33. METI also facilitated the six-month afloat training for 18
students of the four-year marine engineering programme
from Sree Venketeswara College of Engineering
(SVCE), Chennai. Five SVCE students are currently
pursuing the course.

34. During the year 2025-26, METI conducted 64 batches (864
trainees) of the one-day/three-day basic firefighting practical
training programme for outside candidates. METI actively
participated in the National Maritime Day Celebrations 2025
organised by the Mercantile Marine Department (MMD),
Kochi, for which it received appreciation awards from the
MMD, Kochi, on April 05, 2026. METI also observed World
Blood Donor Day and conducted in-house seminars for the
51^st and 52^nd batches of GMEs.

35. METI conducted three batches of the Oil and Chemical
Tanker Familiarisation course for 65 students and one batch
of Gas Tanker course for 21 students from September 2025
to January 2026. On February 27, 2026, METI organised a
'Meet and Greet the Candidates 3.0' programme, which
was attended by 44 students from various engineering
colleges, aspiring for GME-sponsored seats from reputed
shipping companies. Several shipping company officials
visited METI and interacted with students.

36. In alignment with IMO regulations and Amrit Kaal Vision of
the Government of India, CSL METI and Bernhard Schulte
Ship Management (India) Pvt. Ltd. (BSM) have signed an
MoU to conduct one-day practical firefighting and IGF
(basic and advanced) training courses for BSM seafarers.
These DGS-approved courses are designed to meet the
international code of safety for ships using gas or other
low flash point fuels. CSL has successfully trained 302
seafarers across 31 batches under this programme.

37. CSL and Maersk A/S, Denmark have signed an MoU for
collaboration in various key areas. The MoU inter alia
promotes knowledge exchange on global standards to
build world-class capabilities in line with the Government
of India's Maritime India Vision (MIV) 2030 and Maritime
Amrit Kaal Vision (MAKV) 2047, which together envision
India as a premier global maritime hub. Further, CSL and
Maersk have signed an MoU for sponsoring ten GME
trainees of METI. Presently, they have sponsored eight
GME trainees. Furthermore, CSL METI has developed
skill-enhancement programmes viz., 'five days Fitter
Enhancement Training Programme' and 'five days Welder's
Bridging Training Programme' for the seafarers of Maersk.
So far CSL has completed the above up-skilling training
programme for 11 batches of 133 seafarers of Maersk.

38. Further, METI received A1 Grade (Outstanding Grade) by
LR Class on behalf of the Directorate General of Shipping
in the CIP Audit for the year 2025. METI has received the
A1 Outstanding Grade for three consecutive years.

Training Institute

39. The Training Institute conducted various training
programmes on employability, communication skills, soft

skill for hard situations and anti-drug abuse and cyber
security for Act apprentices and trainees completing their
apprenticeship programmes. In addition, the Training
Institute provided skill development training for 76 MEWP
(Mobile Elevating Work Platform) operators including CSL
employees, on-contract workmen, trainees and employees
of contractors. Moreover, the CSL Training Institute
provided internships to a total of 1,542 degree and
management students from various colleges across the
country. During the year 2025-26, CSL imparted training
to 704 trainees, including 665 under the Apprentices
Act, 1961, and 39 under the Prime Minister's Internship
Scheme (PMIS). Furthermore, the CSL Training Institute
has commenced two batches of a two-year rigger training
course under the Skill Development Programme.

40. ASAP Kerala Collaboration - In line with the Government
of India's initiative on skilling, re-skilling and up-skilling
manpower for the growing maritime industry, CSL
and the Additional Skill Acquisition Programme (ASAP)

Kerala, a Section 8 company under the Higher Education
Department, Government of Kerala, have signed an MoU
to provide multi-skill training in shipbuilding, ship repair
and marine engineering for ITI-certified youth. As per
the MoU, ASAP provides two months of theory training,
CSL provides three months of practical training and nine
months of on-the-job training. CSL also provides one-year
contract employment after completion of the training. A
joint certification is awarded by CSL and ASAP.

41. CSL developed the 'Marine Structural Fitter Training
Programme', a multi-skilling initiative that commenced
in February 2022. About 92 candidates have completed
the programme, with 93 candidates currently
undergoing training.

Prime Minister's Internship Scheme (PMIS)

42. CSL remains committed to nurturing future professionals
by supporting national initiatives aimed at building a skilled
and competent workforce. As part of the Prime Minister's
Internship Scheme (PMIS), CSL has provided hands-on
experience to 39 interns with the objective of bridging
the gap between academic learning and professional
practice, thereby promoting skill development and
employability among youth.

CSL Academia Collaboration Policy

43. CSL has formalised its commitment to research and
innovation through the introduction of the CSL Academia
Collaboration Policy (COLLAB). This policy establishes
a structured framework for strategic partnerships with
academic institutions, aimed at fostering skill development,
process enhancement and technological advancement

within CSL and the wider maritime sector. Under this
scheme, 17 students are currently undertaking projects,
two students are engaged in internships and four faculty
members are undergoing professional training at CSL.

Employee Welfare Measures

44. Child Care Leave (CCL) - From the calendar year 2025,
those employees (executives, supervisors or workmen)
with two years of regular service in CSL shall be eligible for
CCL up to two years (i.e., 730 days). All women employees
with dependent disabled children (40% or more disability)
are eligible for CCL without age restrictions. All single
parents (male or female) with minor dependent children
(up to 18 years old) are also eligible for CCL for purposes
such as exams or sickness during the entire service.

45. Employee Welfare Crowd Funding Scheme - CSL has
launched an Employee Welfare Crowd Funding Scheme
'Cochin Shipyard Employees Parivar Parirakshan Yojana
(SEPPY)' in order to support the bereaved family of an
employee in the event of death of an employee. The
scheme operates in such a way that an amount of H600
will be collected from each employee on the rolls of the
Company in the event of death of a regular employee. As
per the scheme, the Company will provide financial support
at the rate of 1.5 times of fund collected through employee
crowd funding, subject to a limit of H15 Lakhs in the event
of each natural death case. The maximum benefit provided
to the dependents through the scheme shall be H25 Lakhs.
During the financial year 2025-26, an amount of H25 Lakhs
was disbursed to the dependents of a deceased employee
in accordance with the provisions of the scheme.

46. Enhancement of relief under Cochin Shipyard Employees
Mutual and Public Welfare Trust (CSEMPWT) - CSL
enhanced the financial death relief to H8 Lakhs and funeral
expenses to H25,000 to the dependents of the members of
the trust in the event of death of an employee.

47. Welfare assistance and special casual leave for the care
of differently abled children - CSL is granting monthly
welfare assistance of H4,500 to all permanent employees
who are having differently abled wards. They are also
given time off for taking care of the ward in emergency
situations limited to a maximum of 5 special casual leaves
in a calendar year.

48. Modified CSL Medical Assistance Scheme - CSL has
modified the medical assistance scheme for employees by
empanelling 34 hospitals (Super-specialty/ multi-specialty/
specialty and other-specialty hospitals) in Ernakulam
district for the treatment of CSL employees and their
eligible dependent family members. The expenses
towards the inpatient/ day care treatment availed at these

34 empanelled hospitals shall be settled directly by CSL
to the hospital. In the case of hospitals outside Ernakulam
district, the admissible treatment expenses shall be
reimbursed to the employees.

49. CSL Rudder Actionable Insights, Informed Decisions - A
mobile application developed and launched as a part
of the digital transformation initiatives of CSL. The
application offers a bunch of new facilities to CSL users.
The application can be used by both internal users like
all permanent staff including officers, supervisors and
workmen and external users like retired employees etc.
Employee profile, attendance details, salary slips, leave
details, medical claims status, dependents information,
loan details, PF data, capture reporting time etc., are some
of the features included in Rudder application.

50. Infertility treatment scheme was launched in the year 2020
for providing reimbursement of medical expenses incurred
for infertility treatment for all permanent employees. An
amount not exceeding H1 Lakh per cycle or the actual cost
whichever is lower is permitted for reimbursement and
the same will be allowed up to a maximum of three fresh
cycles with prior approval. Special leave for a maximum
of 10 days in a year and a maximum of 20 days are being
granted during the service of an employee who undergo
procedures as part of infertility treatment. A total of 31
employees were granted permission to avail the benefits
under this scheme as on March 2026.

51. National Pension System (NPS) was introduced in CSL
in order to facilitate contributory pension scheme for
all permanent employees. CSL is contributing 10% of
the wages (Basic DA) to the individual account of the
employees as employer contribution from April 2021
onwards. The scheme provides attractive income tax
benefits to the employees and also ensures a hassle-free
life post retirement.

52. CSL introduced paternity leave in the year 2019 to male
employees of the Company including for valid adoption of
a child below the age of one year.

53. CSL as a people first and people caring organisation felt the
necessity to support the employees availing leaves owing
to rare and extra ordinary circumstances such as treatment
for cancer, organ failure and organ transplantation. From
the calendar year 2023, 180 days of special leave during
the service period has been sanctioned to all regular
employees for undergoing treatment of cancer like surgery,
chemotherapy or organ failure or donation of organ.
There are also cases reported where the dependents of
employees are in the similar situation and the employees
have to avail leave to take care of them. As a support for

the ailing family members, special leave can also be availed
by employees for the days required for chemotherapy and
organ transplantation of their dependents.

54. It has also been noted that a number of CSL employees
are donating blood to the needy as a noble act and a life¬
saving gesture. All regular employees are also allowed to
avail special leave for one day for donating blood, subject
to a maximum of three occasions in a year.

55. Further, as part of the Company's employee health
and well-being initiatives, CSL successfully completed
the Annual Health Check-up programme for all regular
employees during the financial year 2025-26.

Encouraging Thought Provoking Ideas

56. 'Nethruthwa Samvriddhi Yojana' - Leadership
Acceleration Programme (LEAP) was launched in the year
2016 to encourage and motivate executives in the grades
E1 to E4 for pursuing higher studies in premier institutes
both in India and abroad. The core benefit under the
scheme is not only a grant of study leave for two years,
but reimbursement of tuition fees in installments
after they come back and join for duty. A maximum
of three applicants are considered on an annual basis
under LEAP scheme.

57. Mentor-Mentee scheme was launched in the year 2016
for ensuring personalised special attention by a senior
executive. This collaboration gives junior executives, who

are freshers, a feeling of engagement, belongingness
and significant improvement in the inter and intra
personal relationship in the organisation which lead to
better retention.

Professional Assessments

58. Through an elaborate competency mapping exercise,
four cultural competencies namely teaming, execution
excellence, constraint breaking and continuous learning
have been identified for CSL. These cultural competencies
have been incorporated in all HR sub systems like
recruitment, training, performance management, career
development etc.

Status on Affirmative Action to Implement
Presidential Directives on Reservations

59. Cochin Shipyard has been strictly complying with the
Presidential directives and guidelines on reservation
for Scheduled Caste (SC)/ Scheduled Tribes (ST)/ Other
Backward Classes (OBC)/ Persons with Benchmark
Disabilities (PwBD)/ Economically Weaker Sections (EWS)
and Ex-Servicemen issued by the Government of India
from time to time. The Company has appointed separate
liaison officers for SC/ ST/ OBC/ PwBD/ EWS and Ex¬
Servicemen to oversee the implementation of reservation
policies. Reservation percentage is ensured through the
maintenance of post-based roster system as prescribed by
the Government of India.

63. CSL has a woman Welfare Officer specifically to promote
women empowerment activities and to formulate and
implement welfare measures according to the needs
of women employees of the Company. CSL celebrated
International Women's Day in March 2026 with inclusive
events that encouraged active participation.

64. Further, the Company extends all prescribed maternity
benefits to eligible women employees and complies with
the applicable provisions of the Maternity Benefit Act, 1961.

Integrated Management System (IMS)

65. Cochin Shipyard maintains its Integrated Management
System (IMS) under the ISO 9001:2015 Quality
Management System, ISO 14001:2015 Environmental
Management System and ISO 45001:2018 Occupational
Health and Safety Management System standards. The
quality management systems are proposed to be rolled
out across all ancillary units of CSL.

Information Security Management Systems (ISMS)

66. Cochin Shipyard has achieved a significant milestone by
obtaining certification according to ISO 27001:2022 for
establishing, implementing, maintaining and continually
improving an information security management system
(ISMS). This accomplishment underscores CSL's dedication
to safeguarding sensitive information, bolstering cyber¬
resilience and driving operational excellence. CSL is the
first company in the shipbuilding sector to implement
ISMS, setting a new standard for information security
in the industry.

Energy Management System (EnMS)

67. In March 2026, Cochin Shipyard was awarded ISO
50001:2018 certification for its Energy Management
System (EnMS). This certification demonstrates CSL's
commitment to enhancing energy performance
through a structured approach to energy management,
continuous monitoring and optimisation of energy
consumption, thereby supporting sustainable and
efficient operations.

Facility Upgrade and Capital Expenditure

68. The total capital expenditure incurred in 2025-26
amounted to H318.07 Crores. This related to modernisation
and expansion, renewals and replacements, new dry dock,
ISRF, CMSRU, CKSRU, CANSRU, subsidiaries etc.

Implementation of Official Language Policy

69. In pursuance of sub rule (4) of rule 10 of the Official
Language (Use for the Official Purposes of the Union) Rules,

1976, Government of India have notified, in the Gazette of
India, that 80% of ministerial staff of the Company have
acquired working knowledge/ proficiency in Hindi.

70. On the occasion of the 150^th anniversary of the National
Song Vande Mataram and World Hindi Day, CSL organised
a grand 'National Song - Vande Mataram' competition for
colleges in Ernakulam district, in which a total of 14 colleges
actively participated. The participants presented deeply
emotional and melodious renditions of Vande Mataram,
leaving a lasting impression on the audience. The first prize
was awarded to Sacred Heart College, Thevara, the second
prize to Muthoot Institute of Technology and Science,
Puthencruz, and the third prize to St. Xavier's College for
Women, Aluva. The winning teams were honored with
prizes and certificates on the occasion of Republic Day.

71. On March 24, 2026, a career development seminar was
successfully organised for MA/ BA students and research
scholars of the Hindi Department at Nirmala College,
Muvattupuzha, in collaboration with CSL. The primary
objective of the programme was to familiarise students
with various career opportunities and to strengthen their
professional skills. The seminar was held in the college
campus, where a total of 55 students from the Hindi
Department participated enthusiastically. Another key aim
of the programme was to provide practical exposure and
encourage skill development so that students can take
advantage of better career opportunities in the future.
The keynote speaker for the event was Dr. Madhusheel
Ailyath, Assistant General Manager, Reserve Bank of India,
Kochi. Through this session, the students gained important
and valuable insights into career options, higher education
and preparation for competitive examinations.

72. On May 09, 2025, a Hindi ShiLpashala was successfully
organised for the children of CSL employees, with the
aim of promoting the importance of the Hindi language
and enhancing their linguistic skills. A total of 55 children
actively participated in the event. Shri Prashant G Pai,
Senior Manager, Canara Bank, led the session with
engaging Hindi lessons and fun-filled activities. On this
occasion, various competitions were organised for the
children in Hindi, including quiz, Hindi film song activities
and drawing competitions, providing participants with
an enjoyable and interactive platform to showcase their
language skills and creativity.

73. The Hindi Fortnight celebrations was held with great
enthusiasm and pomp in CSL and its units (CMSRU, CKSRU
and CANSRU) from September 14 to 28, 2025. Various

competitions such as Hindi calligraphy, dictation, poem
recitation, poem writing, news reading, administrative
terminology, quiz, film songs, noting and drafting,
slogan and poster, anthakshari and translation etc.,
were organised for the employees of CSL. More than
70 employees participated enthusiastically in each
competition. The HR&LD Department won the Overall
Championship Rolling Trophy by securing the highest
marks in the competitions held as part of the Hindi
Fortnight celebrations and the Official Excellence Award
was awarded to the Medical Center.

74. As part of the Hindi Fortnight Celebrations 2025 and with
the objective of promoting the use of Hindi as well as
encouraging language-based oratory and critical thinking
skills among students, CSL organised a Hindi debate
competition for high school students (Classes 8, 9 and 10)
from schools under the Kochi Municipal Corporation. A
total of 12 schools actively participated in the competition.
The topic of the debate was 'The Impact of Social Media on
Youth'. In the competition, Navy Children's School, Kochi,
secured the first prize, Chinmaya Vidyalaya, Vaduthala, won
the second prize, Kendriya Vidyalaya No. 2, secured the
third prize, and Greets Public School, Kaloor, achieved the
fourth position.

75. Amrita Vishwa Vidyapeetham, Kochi Campus organised
Hindi competitions (including poetry recitation, speech
and essay writing) for students from various colleges
in Ernakulam district, sponsored by CSL. The objective
of these competitions was to enhance interest in Hindi
language among youth, encourage their creative and
linguistic talents and strengthen the promotion of
official language Hindi. With the support of CSL, the
event became more impactful and well-organised,
fostering a positive attitude towards Hindi among the
younger generation.

76. Shri Harikrishnan G, Manager (ER Dept.), brought pride to CSL
by winning a commendation award in the Hindi short story
writing competition organised by the Thiruvananthapuram
Town Official Language Implementation Committee on
January 16, 2026. The competition received a total of 87
entries from across South India, making this achievement
particularly noteworthy.

77. With the objective of promoting the Hindi language
among students, CSL distributed Hindi books to two CSR-
supported schools viz., Government Higher Secondary
School, Pezhakkapilly and Government Higher Secondary
School, Chathamattam. This initiative aims to enhance
students' proficiency in Hindi and encourage the
development of good reading habits.

78. The 18^th issue of the Hindi in-house magazine was released
in September 2025 at CSL during the Hindi Fortnight
celebrations. The first copy of the magazine was presented
to Dr. Seema Suri, Non-Official Independent Director, by Shri
Madhu Sankunny Nair, the then Chairman and Managing
Director (CMD). The 19^th issue of the Hindi in-house
magazine was released on March 12, 2026 by Shri Jose V
J, Director (Finance) and CMD (Additional Charge). On this
occasion, the first copy of the magazine was received by
Dr. Harikrishnan S, Director (Operations), from the CMD.

79. Four students from Maharajas College, Ernakulam, two
students from CUSAT, Kochi and six students from Dakshina
Bharat Hindi Prachar Sabha, Ernakulam successfully
completed internship work in Hindi during April - March
2026. They were given a valuable opportunity to gain
knowledge in areas such as the Official Language Policy,
annual programmes, correspondence, noting and drafting,
computer typing and record/file management.

80. Hindi workshops and Official Language Implementation
Committee (OLIC) meetings were conducted during the
year. Further, in-service training in Hindi Pragya Course
(July -November 2025) commenced in the month of July
2025 under the Hindi Teaching Scheme. The course was
conducted over a period of five months. A total of 20
employees appeared for the examination held on November
16, 2025, after successfully completing the course. All the
employees passed the examination successfully.

81. With the objective of creating awareness about the official
language among senior officers of the organisation, an
official language management programme was organised
on December 03, 2025, for officers at the Senior Manager
and Manager levels. The programme was conducted by
Dr. Madhusheel Ayilyath, Assistant General Manager,
Reserve Bank of India, Kochi. He elaborated in detail on
the Official Language Policy, annual programme, reports

related to the Parliamentary Committee on official
language, Unicode and other relevant aspects. Key issues
concerning the role and responsibilities of senior officers
in the implementation of the official language were
also discussed. A total of 33 officers participated in the
programme successfully.

Particulars of Employees and Related Disclosures

82. In accordance with Ministry of Corporate Affairs
notification no. G.S.R. 463(E) dated June 05, 2015,
government companies are exempt from Section 197 of
the Companies Act, 2013 and its rules thereof.

Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo

83. Details are placed at Annexure I.

Risk Management

84. CSL has put in place a comprehensive Risk Management
Policy, approved by the Board of Directors. The Company's
Risk Management Policy aims to establish a structured
and defined process for the identification, assessment,
response, monitoring and reporting of risks.

85. As per the Policy, the CSL Board undertakes overall
oversight of the risk management system. The Board
periodically reviews the risk management process to
ensure that key risks are being properly identified and
effectively managed. The CSL management, comprising
both Board-level and below-Board-level executives,
has been entrusted with the implementation of the
risk management process. To this end, CSL has set up
functional Risk Management Committees and a Board-
level Risk Management Committee to implement the
Risk Management Policy across the organisation. These
committees regularly review the risk management process
and the Policy to ensure their continued effectiveness.

86. The diversified product mix of CSL, which includes both
defense and commercial shipbuilding, as well as ship repair,
provides the Company with a natural hedge against market
risks. This diversification helps to mitigate the Company's
exposure to fluctuations in any particular market segment,
thereby enhancing the overall resilience of the business.

Health, Safety and Environment (HSE)

87. CSL continues to uphold the highest standards of Health,
Safety and Environment (HSE), reinforcing our commitment
to the safety and well-being of employees, customers and
all stakeholders. CSL's approach is driven by a proactive HSE

culture, supported by a robust management system that
systematically identifies, assesses and mitigates potential
risks. CSL firmly believe that maintaining a safe and
healthy work environment is fundamental to sustainable
operations and the overall success of the organisation.

88. The overall HSE Index score of CSL for 2025 stood at
79.36, reflecting sustained progress in Health, Safety
and Environment performance. The continued focus
on strengthening HSE governance has resulted in
measurable improvements, highlighting the effectiveness
of structured and proactive risk mitigation strategies in
preventing incidents and accidents. This emphasis on
proactive intervention over reactive response is clearly
demonstrated through both the overall and departmental
HSE Index scores, which serve as key performance
indicators. These metrics reinforce CSL's commitment
to embedding a strong safety culture and ensuring
consistent HSE excellence across all functional areas of
the organisation.

89. The HSE Star Rating System continued to serve as a critical
framework for evaluating the annual HSE performance of
subcontractors deploying 20 or more personnel within the
Yard, based on a calendar year assessment. The system
enables CSL to systematically monitor performance and
drive continuous improvement in HSE standards among
its stakeholders. Ratings awarded range from three-star
to five-star levels, reflecting adherence to stringent HSE
requirements. During the reporting period, a total of 31
subcontractors were recognised with CSL HSE Star Ratings.

90. As part of the continual refresher training initiative,
a comprehensive refresher programme has been
systematically conducted for CSL employees and
subcontractor workmen. A total of 15,623.25 man-hours
of structured safety training have been completed,
reinforcing critical safety competencies, hazard awareness
and compliance with established safety protocols across all
levels of the organisation. These sessions are designed not
only to revisit core safety principles but also to integrate
learnings from recent incidents, audits and evolving
industry best practices, thereby strengthening the overall
safety culture within CSL.

91. In addition, CSL has established a collaboration with the
Fire and Safety Department of Cochin University of Science
and Technology to deliver specialised safety engagement
programmes for its employees.

Industrial Security

92. CSL is a vital organisation with national importance and
is classified as special security zone by both State and

Central Government as the security of establishment
has got national importance. Overall security of the
Company continued to be robust without causing any
serious security concern during the year. The primary
security of the establishment is entrusted with Central
Industrial Security Force (CISF) unit under the command
of Dy. Commandant, CISF. CSL has instituted twenty-four
hours waterfront patrolling with armed CISF personnel in
addition to QRT team. CSL has installed a state-of-the-art
surveillance system (CCTV) covering the entire perimeter
including all critical locations and installations. Further,
CSL's integrated security system enhances surveillance
through a central command and control room, an
electrical smart power fence, an access control system
and a visitor management system, thereby strengthening
the overall security of the Yard. All security systems and
measures introduced and installed in the Company are of
international standards. Periodic mock drill exercises are
conducted in coordination with Intelligence Bureau, State
Police, State Fire Department, Bomb Squad and Navy to
assess the readiness of CISF to counter any security threat,
security breach, crisis or calamities.

93. CSL has also engaged DGR sponsored ex-servicemen
security agency for supplementing existing forces mainly
catering to external properties of CSL and also internal
specific locations.

94. CSL was accorded status of Sub-AUA under C-DAC, Mumbai

by UIDAI in October 2023. Accordingly, the Company
carries out Aadhaar based verification under Aadhaar
Act for identification of persons prior to issuing of entry
passes. This process helps prevent impersonation and
strengthens access control by ensuring that only verified
individuals are granted entry to CSL.

Awards and Recognitions

95. During the financial year 2025-26, CSL received the
following awards and recognitions:

(i) Maritime Excellence Award for Shipbuilding and Ship
Repair at India Maritime Week 2025;

(ii) Best Stall for Creative Visualisation at India
Maritime Week 2025;

(iii) Innovative HR Practices Award from National Institute
of Personnel Management (NIPM);

(iv) Swachh Bharat Pakhwada Award 2025 by the
Ministry of Ports, Shipping and Waterways,
Government of India;

(v) Outstanding PSU of the Year Award at the prestigious
All India Management Association (AIMA) Leadership
Excellence Awards event;

(vi) Kerala State Energy Conservation Award 2025 from
the Department of Power, Government of Kerala
through the Energy Management Centre;

(vii) First prize for the implementation of official language
from Kochi Town Official Language Implementation
Committee (TOLIC) among the companies having
more than 200 administrative employees;

(viii) First prize for the Hindi home magazine 'Sagar Ratna'
from Kochi TOLIC (PSUs); and

(ix) First runner-up for the Overall Champion for the joint
Hindi Fortnight celebrations, 2025.

Board of Directors' and Key Managerial Personnel

96. During the financial year 2025-26, the Board of CSL
comprised of 7 Directors, consisting of a Chairman and
Managing Director, 3 Whole Time Directors and 2 Part¬
time Official Directors (Government Nominees) and 1
Non-official (Independent) Director. For further details
regarding the Board of Directors, including any changes
thereto, please refer to the Corporate Governance Report,
which forms part of the Directors' Report.

Declaration and Meeting of Independent Directors

98. During the financial year 2025-26, there was only one
Independent Director on the Board of CSL and the
Company has received declaration from the Independent
Director confirming that she meets the criteria of
independence as prescribed under the Companies Act,
2013. A separate meeting of the Independent Directors
could not be held during the year as there was only one
Independent Director.

Details of Board Meetings held during 2025-26

99. Six Board Meetings were held during the year 2025-26
and the gap between two meetings did not exceed the
statutory period. The dates on which the Board Meetings
were held along with the attendance of Directors therein,
are as follows:

100. For more details with respect to the Directors, Board and
Committee meetings held during the year and attendance
of these meetings, refer Corporate Governance Report
which forms part of Directors' Report.

Remuneration Policy/ Evaluation of Board's
Performance

101. Cochin Shipyard is a Government of India company under
the Ministry of Ports, Shipping and Waterways. Presently,
the Directors of the Company are presidential appointees

and their remuneration is fixed in accordance with the
DPE guidelines. Accordingly, Article 21(a) of the Articles
of Association of CSL states that, President will appoint
Directors and determine their remuneration. Since, the
Board level appointments are made by President of India, the
evaluation of performance of such appointees is also done
by the Government of India. However, the Board evaluated
the Non-official (Independent) Director of the Company vis¬
a-vis her performance and fulfilment of the independence
criteria and found the same to be satisfactory.

Report of the Nomination and Remuneration
Committee on Company's Policy on Directors'
Remuneration

102. Presently, the remuneration of Board level appointees is
determined in accordance with DPE guidelines. CSL has
adopted a Board-approved Nomination and Remuneration
Policy in compliance with the provisions of Section 178
of the Companies Act, 2013. The Policy is available in the
website of the Company athttps://cochinshipyard.in/
investor/investor titles/68.

Directors Responsibility Statement

103. Your Directors state that:

(i) in the preparation of the annual accounts for
the year ended March 31, 2026, the applicable
accounting standards read with requirements set
out under Schedule III to the Companies Act, 2013
have been followed and there are no material
departures from the same;

(ii) the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of
the Company as at March 31, 2026 and of the profit
of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of the Companies
Act, 2013 for safeguarding the assets of the Company
and for preventing and detecting fraud and other
irregularities;

(iv) the Directors have prepared the annual accounts on a
'going concern' basis;

(v) the Directors have laid down internal financial
controls to be followed by the Company and that
such internal financial controls are adequate and are
operating effectively; and

(vi) the Directors have devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems are adequate and
operating effectively.

Contracts and arrangements with related parties

104. In line with the provisions of the Companies Act, 2013
and the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,

2015, the Company has put in place a Policy for dealing with
the related party transactions and the same is available in
the website of the Company athttps://cochinshipyard.in/
investor/investor titles/68.

105. During the year under review, all transactions entered into
with related parties were approved by the Board, since
there is no functional Audit Committee at present. Prior
omnibus approval of the Audit Committee (if available)
and the Board is obtained for the transactions which are
foreseeable and of a repetitive nature. All related party
transactions are placed on a quarterly basis before the
Audit Committee (if available) and the Board for review.

106. All contracts, arrangements and transactions entered into
by the Company with related parties during the financial
year 2025-26 were in the ordinary course of business and
on an arm's length basis. No related party transactions have
been entered into by the Company during the year under
review which attracted the provisions of Section 188 of the
Companies Act, 2013. Therefore, the disclosure of related
party transactions as required under Section 134(3)(h) of
the Companies Act, 2013 in Form AOC-2 is not applicable
for the financial year 2025-26 and hence does not form
part of this Report. Further, your Directors draw attention
of the members to Note 53 to the standalone financial
statements which set out related party disclosures as per
Indian Accounting Standard (Ind AS) 24.

Corporate Social Responsibility and Sustainable
Development (CSR & SD) Committee

107. The Corporate Social Responsibility and Sustainable
Development (CSR & SD) Committee of CSL ceased to exist
with effect from November 22, 2024 due to the completion
of tenure of the Independent Directors and the subsequent
non-appointment of new incumbents by the Government
of India. The CSR & SD Committee was reconstituted with
effect from June 01, 2025 following the appointment of
Dr. Seema Suri as a Non-official (Independent) Director on
the Board of CSL on May 21, 2025. In the absence of CSR &
SD Committee, CSR proposals were considered directly by
the Board based on the recommendations of below Board
level CSR Executive Committee.

108. From June 01, 2025 till January 31, 2026, the CSR & SD
Committee comprised of Shri Madhu Sankunny Nair
(DIN: 07376798), Chairman and Managing Director as
Chairperson, Shri Jose V J (DIN: 08444440), Director

(Finance) and Dr. Seema Suri (DIN: 11117145), Non-official
(Independent) Director as Members. Consequent to
the retirement of Shri Madhu Sankunny Nair, Chairman
and Managing Director (CMD), on superannuation from
services of the Company on January 31, 2026, the CSR
& SD Committee was reconstituted with effect from
February 01, 2026 with Shri Jose V J (DIN: 08444440),
Director (Finance) & CMD (Addl. Charge) as Chairperson,
Dr. Harikrishnan S, (DIN: 10221559), Director (Operations),
Shri Rajesh Gopalakrishnan (DIN: 09576336), Director
(Technical) and Dr. Seema Suri (DIN: 11117145), Non¬
official (Independent) Director as Members. The
composition of the CSR & SD Committee remained the
same as on March 31, 2026.

109. The CSR & SD Committee has formulated and
recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to
be undertaken by the Company, which has been approved
by the Board. The CSR Policy can be accessed on the
Company's website at the linkhttps://cochinshipvard.in/
csr/aboutus#parentVerticalTab3.

110. Cochin Shipyard started CSR activities in the year 2010¬
11 based on the guidelines issued by the Department
of Public Enterprises (DPE) applicable to Government
Companies. CSL has put in place an effective CSR Policy
and implementation machinery. The CSR implementation
machinery consists of a three-tier system; Tier I CSL Board,
Tier II CSL Board Level CSR Committee consisting of four
members of the Board and Tier III CSL CSR Executive
Committee consisting of senior level executives across
various departments of the Company.

111. During the year 2025-26, the Company couid engage in
meaningful CSR initiatives that received appreciation both
within Keraia and also nationally. The Company has spent
H15.54 Crores against the target mandatory CSR spending
of H13.89 Crores for the financial year 2025-26. 'Health &
Nutrition and PM Internship Scheme' have been adopted
as common theme for undertaking CSR activities by CSL
for the year 2025-26.

112. The Annual Report on CSR activities is placed at Annexure II.

Audit Committee

113. Consequent to the vacation of office of aii the
Independent Directors with effect from November 22,
2024, upon completion of their tenure as prescribed by
the Government of India and due to the non-appointment
of sufficient number of Independent Directors by the
Government of India, the Company couid not reconstitute
the Audit Committee with effect from November 22, 2024.

114. Particulars regarding the Audit Committee are provided
under the section 'Board Committees' in the Report on
Corporate Governance.

Corporate Governance

115. The Company is committed to maintaining the highest
standards of corporate governance and has put in place
an effective corporate governance system. The Company
complies with the applicable regulations of the Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, and also
the Guideiines on Corporate Governance issued by the
Department of Public Enterprises (DPE) except w.r.t
the appointment of sufficient number of Independent
Directors and related non-compliances including
constitution of Audit Committee and Nomination and
Remuneration Committee. The Company submits its
progress reports on corporate governance within 15
days from the close of each quarter to the Administrative
Ministry viz., Ministry of Ports, Shipping and Waterways as
recommended by the DPE in this regard. The Report on
Corporate Governance forms part of the Directors' Report.

Management Discussion and Analysis

116. A separate section 'Management Discussion and Analysis
Report' has been included in the Annual Report and the
same forms part of the Directors' Report.

Internal Financial Controls

117. The Company has in place adequate internal financial
controls with reference to financial statements. During
the financial year 2025-26, the Company engaged
M/s. Krishnamoorthy & Krishnamoorthy, Chartered
Accountants for reviewing the adequacy of the internal
financial controls and to ensure that proper and adequate
systems are in place for compliance with the provisions of
all applicable laws. During the financial year 2025-26, such
controls were tested and no reportable material weakness
was observed, with no major variation in the control
environment during the year.

118. In order to provide for functional autonomy, the Company
has a system wherein financial powers of the Board
of Directors are delegated to the CMD. These powers
are further sub-delegated to officers at various levels
for smooth and efficient day to day functioning. An
independent internal audit mechanism is in place for
conducting extensive audit of various operational and
financial matters. Compliance Audits are also being carried
out by C&AG on a yearly basis.

119. The Board of Directors also looked into the internal
control system, Company procedures and internal audit
performance and reports. The Company has implemented
an integrated ERP System (SAP) since July 2014 and
upgraded the same to the latest version S/4HANA from
April 2022, which is enabling better management control.

Statutory Auditors

120. M/s. Babu A Kallivayalil & Co. (Firm Registration No.
05374S), Chartered Accountants, Kochi were appointed as
the Statutory Auditors of the Company by the Comptroller
and Auditor General of India for the year 2025-26.
The shareholders have delegated the power to fix the
remuneration of Statutory Auditors to the Board and
accordingly, the same has been fixed by the Board.

Auditors Report

121. M/s. Babu A Kallivayalil & Co., Statutory Auditors have
submitted their report on the standalone and consolidated
financial statements of the Company for the financial year
ended March 31, 2026, on May 15, 2026. The Report does
not contain any qualification, reservation, adverse remark
or disclaimer.

Comments of C&AG

122. The comments of the Comptroller and Auditor General

of India (C&AG) under Section 143(6)(b) of the Companies Act,

2013 forms part of the Annual Report.

Cost Auditors

123. The Company maintains cost records with respect to its
shipbuilding activities as required under Section 148(1)
of the Companies Act, 2013. The Board has appointed
M/s. Rajendran Mani and Varier, Cost Accountants (Firm
Registration No. 000006), Kochi, as the Cost Auditors
for conducting the audit of cost records of the Company
for the financial year 2025-26. The remuneration of Cost
Auditor for the financial year 2025-26 was ratified by the
shareholders at the 53^rd AGM held on September 29, 2025.

Secretarial Auditor

124. The Board has appointed M/s. SEP & Associates, Practicing
Company Secretaries, Kochi, as the Secretarial Auditors
of the Company for a term of five consecutive years,
commencing from the financial year 2025-26 till the
financial year 2029-30. The said appointment of M/s. SEP
& Associates was approved by the shareholders at the 53^rd
AGM held on September 29, 2025. The Secretarial Audit
Report for the financial year ended March 31, 2026 is
placed at Annexure III. The Secretarial Auditors in their
Report observed the following:

(i) Composition of Board - Independent Directors

The Company did not have sufficient number of
Independent Directors on its Board during the audit
period, as required under Regulation 17 of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI LODR Regulations"), Section
149 of the Companies Act, 2013 ("the Act"), and
Clause 3.1 of the Corporate Governance Guidelines
for Central Public Sector Enterprises ("CG Guidelines
for CPSEs"). The Company only had one Independent
Director on its Board during the audit period, who
was appointed on May 21, 2025. Consequently,
the Company was non-compliant with respect to
the conduct of separate meeting of Independent
Directors as mandated under Regulation 25(3)&(4) of
the SEBI LODR Regulations and Schedule IV to the Act.

(ii) Woman Director/ Woman Independent Director

There was no Woman Independent Director on its
Board from the start of the audit period up to May 20,
2025, as mandated under Regulation 17 of the SEBI
LODR Regulations. Further, the Company was also

non-compliant with the requirement of appointing at
least one Woman Director under Section 149 of the
Act during the said period.

(iii) Audit Committee

The Company did not have a duly constituted Audit
Committee during the audit period, as required under
Regulation 18 of the SEBI LODR Regulations, Section
177 of the Act, and Clause 4.1 of the CG Guidelines
for CPSEs. Consequently, the Company was also non¬
compliant with respect to the conduct and frequency
of Audit Committee meetings as mandated under
Regulation 18(2) of the SEBI LODR Regulations and
Clause 4.4 of the CG Guidelines for CPSEs.

(iv) Nomination and Remuneration Committee

The Company did not have a duly constituted
Nomination and Remuneration Committee during the
audit period, as required under Regulation 19 of the
SEBI LODR Regulations, Section 178 of the Act, and
Clause 5.1 of the CG Guidelines for CPSEs. Consequently,
the Company was also non-compliant with respect
to the conduct and frequency of Nomination and
Remuneration Committee meetings as mandated
under Regulation 19(3A) of the SEBI LODR Regulations.

(v) Stakeholders Relationship Committee

The Company did not have a duly constituted
Stakeholders Relationship Committee from the start
of the audit period up to May 31, 2025, as required
under Regulation 20 of the SEBI LODR Regulations
and Section 178 of the Act.

(vi) Corporate Social Responsibility (CSR) Committee

The Company did not have a duly constituted
Corporate Social Responsibility Committee from
the start of the audit period up to May 31, 2025, as
required under Section 135 of the Act.

(vii) Risk Management Committee

The Company did not have a duly constituted Risk
Management Committee from the start of the
audit period up to May 31, 2025, as required under
Regulation 21 of the SEBI LODR Regulations.

(viii) Quorum for Board Meetings

The requirement of quorum of at least one
Independent Director as mandated under Regulation
17 of SEBI LODR Regulations was not met in the
Board Meeting of the Company held on May 15, 2025
as there were no Independent Directors on the Board
of the Company.

125. The explanation of the Board to the observations in the
Secretarial Audit report is given below:

CSL is a Central Public Sector Enterprise under the
administrative control of the Ministry of Ports, Shipping
and Waterways, Government of India. Accordingly, the
appointment of Directors on the Board of CSL is done
by the Government of India by following due procedure
of selection. The Company has forwarded necessary
requests to the Government of India for filling up the
vacancies of Independent Directors including a woman
director. Consequently, the Ministry of Ports, Shipping
and Waterways, Government of India vide their Letter
No. SY-11012/1/2016-CSL dated May 20, 2025, appointed
Dr. Seema Suri as a Non-official (Independent) Director on
the Board of CSL. Following her induction, the Company
reconstituted the Stakeholders Relationship Committee,
the Risk Management Committee and the CSR Committee
on June 01, 2025. The appointment of the remaining five
Independent Directors is awaited from the Government
of India and constant efforts are being made to meet the
compliance requirements. The Audit Committee and the
Nomination and Remuneration Committee will be duly
reconstituted in line with the SEBI LODR Regulations once
sufficient number of Independent Directors are appointed
by the Government of India.

Internal Auditor

126. The Board has appointed M/s. Elias George & Co.,
Chartered Accountants, Kochi, to conduct Internal Audit
for the financial year 2025-26.

Annual Return

127. The annual return of the Company as required under
Section 92(3) of the Companies Act, 2013 is available in
the website of the Company athttps://cochinshipyard.in/
investor/investor titles/55.

Investor Services

128. The shares of the Company are listed in BSE Limited ("BSE")
and National Stock Exchange of India Limited ("NSE"). CSL
has paid listing fees to BSE and NSE on time. MUFG Intime

India Private Limited (formerly Link Intime India Private
Limited) are the Registrar and Transfer Agents in respect
of these equity shares.

129. As on March 31, 2026, 8.72% Tax Free, Secured,
Redeemable, Non-Convertible Bonds of only H23 Crores is
outstanding for CSL, which will be matured in March 2029.
The said bonds are fully dematerialised with both the
depositories, NSDL and CDSL and are listed on Wholesale

Debt Market ("WDM") segment of BSE. During the year
India Ratings and Research (Ind-Ra) and Care Ratings
reaffirmed its ratings of CSL instruments of IND AAA/
Stable and CARE AAA/ Stable respectively. CSL has paid
the listing fees to BSE on time in respect of the bonds.
MUFG Intime India Private Limited (formerly Link Intime
India Private Limited) is the Registrar and Transfer Agents
and SBICAP Trustee Company Limited is the Debenture
Trustees in respect of the bonds.

Vigilance

130. The Vigilance Department of CSL integrates preventive,
proactive and punitive measures to uphold organisational
integrity. By conducting investigations, surveillance and
detection initiatives, the department ensures transparency,
equity and competitive efficiency in all affairs, including
procurements. In strict adherence to the Central Vigilance
Commission (CVC) guidelines, the department regularly
engages with the management and heads of departments.
It prioritises sensitisation programmes for officers and
supervisors to foster a culture of vigilance.

131. Strengthening Vigilance Capabilities - Dr. C. Pandi Selva
Durai, IOFS, serves as the full-time Chief Vigilance Officer,
leading the Vigilance Department. The department also
includes a Vigilance Officer (a DySP rank police officer
from Kerala Police on deputation to CSL), two CSL officers
and three supporting staff. The Chief Vigilance Officer also
oversees the vigilance functions of CSL's wholly owned
subsidiaries, Hooghly Cochin Shipyard Limited (Hooghly-
CSL) and Udupi Cochin Shipyard Limited (Udupi-CSL).

132. Systemic Improvements and Inspections - The Vigilance
Department conducted Chief Technical Examiner (CTE)
type intensive examinations and recommended various
systemic improvements based on the findings and
observations. CTE type inspections were carried out
on select major works and procurements from the Civil
Department, the Infra Projects Department, the Ship
Building and the Ship Repair divisions. During the financial
year, the Department monitored various contracts and
audit reports and conducted surprise/ periodic inspections
across operational areas, suggesting corrective actions
wherever necessary. All reports to the CVC, including
quarterly progress reports and quarterly performance
reports, were submitted on time.

133. Some of the key initiatives undertaken by the Department
as part of strengthening vigilance measures in CSL include
the introduction of an online suggestion box to enable
employees to share constructive suggestions or report
instances of misconduct, unethical practices or rule
violations; the introduction of a new transaction code

to identify non-moving and siow-moving stock items for
better inventory management and to prevent blockage;
and the automated capture of Quarterly Progress Report
(QPR) data to eliminate errors and delays associated with
manual consolidation.

134. Vigilance Awareness Initiatives - As a prelude to Vigilance
Awareness Week 2025, as per CVC's directions, a three-
month campaign was organised from August 18, 2025
to November 17, 2025, focusing on various activities to
enhance vigiiance awareness and sensitisation among
officers and supervisors. As part of a special drive, scrap/
waste management has also been identified as a focus
area. Several initiatives, including systemic improvements,
were implemented, leading to a significant increase
in scrap disposai. As a resuit, revenue from scrap
disposal rose substantially in 2025-26. There has been a
significant improvement in scrap management and yard
housekeeping. The Vigilance Awareness Week was also
observed in a befitting manner during October - November
2025 on the theme 'Vigilance: Our Shared Responsibility'.

Right to Information Act

135. In order to promote transparency and accountability,
CSL has implemented the provisions of the Right to
Information (RTI) Act, 2005 in its true ietter and spirit
and an appropriate mechanism has been set up in the
Company with a dedicated centraiised RTI Ceii to provide
information to the citizens under the provisions of this Act.
Aii the RTI requests and the appeals received both online
and offline during the year 2025-26 have been processed
and information was provided in a time bound manner as
stipulated in the Act.

136. There have been no instances of non-compiiance by the
Company. No penalties or strictures were imposed on the
Company by any statutory authority during the last three
years with respect to RTI.

Vigil Mechanism

137. The Cochin Shipyard Vigii Mechanism and Whistle Blower
Policy of CSL adopted by the Board of Directors at their
228^th Meeting held on December 14, 2016 was functioning
as the Vigii Mechanism of CSL. Further, in line with the
guidelines on Corporate Governance for Central Public
Sector Enterprises issued by the Department of Public
Enterprises, CSL had adopted Fraud Prevention and
Detection Policy at the 214^th Board Meeting held on
September 16, 2014. Since the larger objective of both
policies was similar, CSL adopted a combined policy viz.,
Whistle Blower and Fraud Prevention Policy at the 252^nd

Board Meeting held on November 12, 2019, which is
amended from time to time as necessary. The prevailing
Whistle Blower and Fraud Prevention Policy of CSL
is available in the website of the Company athttps://
cochinshipyard.in/investor/investor tities/68.

Details of frauds reported by Auditors under
Section 143

138. Nii.

Particulars of loans, guarantees or investments

139. During the year under Report, the Company has not

(a) given any loan to any person or other body corporate;

(b) given any guarantee or provided security in connection
with a loan to any other body corporate or person; and

(c) acquired by way of subscription, purchase or
otherwise, the securities of any other body corporate,
as prescribed under Section 186 of the Companies
Act, 2013 except as stated beiow.

As part of the arrangement with Dredging Corporation
of India Limited (DCIL) under the Shipbuiiding
Contract for building the country's largest dredger,
the 12,000 Cu.M Trailer Suction Hopper Dredger
(TSHD), the Company, in February 2026, subscribed
to 11,148 Secured, Unrated, Unlisted, Redeemable,
Non-Convertibie Debentures (NCDs) of DCIL at a face
value of H1 Lakh each, aggregating to H111.48 Crores.
The NCDs carry a coupon rate of 7.72% per annum and
are redeemabie at par after 10 years, with an option
for eariy redemption after 5 years. The proceeds
from the said NCDs were utiiised by DCIL to meet
its payment obiigations to CSL for the procurement
of the said dredger. The NCDs, heid in demat form,
are secured by a first pari passu charge on the said
dredger, shared with Deutsche Bank AG. Cataiyst
Trusteeship Limited acts as the Debenture Trustee.

Raising funds through Blue Bonds - Update

140. CSL had explored the possibility of raising funds by

way of issuance of US$ denominated non-convertibie
senior unsecured fixed rate notes ("Notes") for an
aggregate amount up to US$ 50 miiiion, primariiy to
finance Company's eiigibie sustainabie projects or other
permissibie end uses in accordance with appiicabie iaw.
However, in view of significant changes in economic
conditions, which have made domestic borrowing more
cost-effective, and a revision in the impiementation

approach of the Company's key sustainability projects, the
proposal not pursued further.

Material changes and commitments

141. No material changes and commitments, affecting the
financial position of the Company, have occurred between
the end of the financial year of the Company and the date
of this Report.

Details of change in nature of business

142. There has been no change in the nature of business of the
Company during the year under report.

Deposits

143. Your Company has not accepted any deposits from the
public under Chapter V of the Companies Act, 2013.

Secretarial Standards

144. The Company has complied with the applicable
Secretarial Standards issued by the Institute of Company
Secretaries of India.

Significant and Material orders

145. No significant and material orders were passed by the
regulators or any courts or tribunals impacting the going
concern status of the Company and affecting its operations.

Proceedings under Insolvency and Bankruptcy
Code, 2016

146. There was no application made or proceeding pending
against the Company under the Insolvency and Bankruptcy
Code, 2016 (IBC) during the year under review.

Business Responsibility and Sustainability Report

147. The Securities and Exchange Board of India (SEBI) has
mandated inclusion of Business Responsibility and
Sustainability Report (BRSR) as part of the Annual
Report for top 1,000 listed entities based on market
capitalisation. Further, for the top 500 listed entities,
SEBI has also mandated assessment or assurance of
the specified parameters as per the BRSR Core to be

obtained from an independent expert. BRSR indicates
the Company's performance against the principles of the
'National Guidelines on Responsible Business Conduct'
and BRSR Core is a sub-set of the BRSR, consisting of a

set of Key Performance Indicators (KPIs)/ metrics under
nine environment, social and governance attributes.
Accordingly, the Company has provided BRSR in the
prescribed format along with the Assurance Report
on BRSR Core given by Sustainability Actions Private
Limited, which forms part of the Annual Report and is also
available on the Company's website at the linkhttps://
cochinshipyard.in/investor/investor titles/53. This would
enable the Members to have an insight into environment,
social and governance initiatives of the Company.

Other Statutory Disclosures

148. No disclosure or reporting is made with respect to
the following items, as there were no transactions
during FY 2025-26.

(i) There was no issue of equity shares with differential
rights as to dividend, voting or otherwise;

(ii) There was no issue of equity shares (including sweat
equity shares) to employees of the Company under
Employees Stock Option Scheme;

(iii) The Company does not have any scheme or
provision of money for the purchase of its own
shares by employees or by trustees for the
benefits of employees;

(iv) There was no instance of one-time settlement with
any Bank or Financial Institution;

(v) Directors of the Company have not received
any remuneration or commission from any of
its subsidiaries;

(vi) The Company has not failed to implement any
corporate action; and

(vii) There was no revision of financial statements and/ or
Directors' Report of the Company under Section 131
of the Companies Act, 2013.

Acknowledgement

149. The Board of Directors places on record their deep
appreciation for the unwavering support and guidance
extended by the Hon'bie Union Minister for Ports,
Shipping and Waterways and ail officials of the Ministry
of Ports, Shipping and Waterways. The Board would also
like to express its heartfelt gratitude for the co-operation
and assistance received from various offices of the
Government of India, Government of Keraia, Government
of West Bengal, Government of Karnataka, Government
of Maharashtra, Andaman and Nicobar Administration,
various iocai bodies, the Comptroller and Auditor General
of India, statutory auditors, secretarial auditors, cost
auditors, internal auditors, BRSR Core assurance providers
and the bankers.

150. Further, the Board extends sincere thanks to our valued
shareholders, investors, customers, suppliers and sub¬
contractors for their continued support. The Board also
recognise and appreciate the dedication and commitment
of aii employees of Cochin Shipyard Limited and
its subsidiaries.

For and on behalf of the Board of Directors

Jose V J

Kochi Director (Finance) & CMD (Addi. Charge)

May 15, 2026 DIN: 08444440